Wachovia said Monday it suffered significant losses from a Citigroup hedge fund, joining Fifth Third Bancorp, which disclosed its loss in an April lawsuit, reports Reuters. Wachovia said a $315m write-down the bank disclosed earlier in May was related to investments in Citi’s Falcon Strategies hedge Fund. Wachovia, the fourth-largest US bank, made the investments through its bank-owned life insurance portfolio. Fifth Third said in a lawsuit filed April 17 it had invested $612m in Falcon and is looking to recover $323m in damages from the two Aegon subsidiaries that had been managing its bank-owned life insurance portfolio. The WSJ reports that the losses may pressure Citi to give at least 3 large US banks some of their money back, as it has agreed to do for individual investors.

This entry was posted by Gwen Robinson on Tuesday, May 20th, 2008 at 5:39 and is filed under Capital markets, Hedge funds. Tagged with citi, Fifth Third, wachovia. Edit this entry.