What to make of Citigroup's hedge fund move

June 13, 2008 | By Jim Kim

Like a lot of other banks, Citigroup has struggled to get its hedge fund offerings in shape. The latest news is an embarrassment, according to MarketWatch: It has decided to shut down Old Lane Partners and will likely take another huge writedown. Recall that the fund was founded by current Citi CEO Vikram Pandit. He sold the firm to Citigroup for $800 million in an agreement that some think was linked to him accepting the top job. In any case, Citigroup wanted to bolster its hedge fund offerings. The fund was plagued almost from the moment Pandit sold it. Some may see this as a harbinger of sorts. But it's fair to say that a winning hedge fund product offering is hard to come. Investors in Old Lane will be able to cash out by July 31, but the founders, including Pandit, will be required to stay invested. It's unclear for how long.

For more:
- here's the MarketWatch article
- here's the release