There’s much commentary about on the shuttering this week of Citi’s troubled hedge Old Lane Partners - the ailing Morgan Stanley spin-off from whence sprang the Olympian Pandit fully formed.
Investors fled Old Lane in droves. The fund only returned 3 per cent through 2007. The impact on Pandit is more than just reputational, though. Sane investors have fled (the fund allowed withdrawals from March), but some remained and felt the heat. Those ’some’ being Citi employees and the fund’s management - whose money remained locked into the fund, as per original agreements, until 2011. Pandit had a reported $100m in Old Lane.
From Felix Salmon at Market Movers:
Things are getting serious at Citigroup. Just check out how the WSJ’s reporting has changed from last week, when Citi was merely closing consumer credit outlets in Japan, to this week, when Citi is closing the Old Lane hedge funds it bought from Vikram Pandit. In fact, you don’t even need to look at the reporting. You just need to look at the dot portraits.
Related Links
Citigroup takes $9bn assets in Old Lane move - FT
A brief history of Old Lane Partners - WSJ MarketBeat blog
