Citigroup to close Old Lane hedge fund

The bank will purchase the assets of the struggling fund, formerly run by Vikram Pandit, from investors.

Citigroup Inc. plans to shut down a hedge fund that was co-founded by the financial services giant’s chief executive Vikram Pandit.
New York-based Citigroup will purchase the assets of the struggling fund from investors, according to a statement released by the bank.
Citigroup agreed to buy Old Lane LP for a reported $800 million in April 2007.
The company plans to retain “key executives,” according to the statement.
“Citi will purchase substantially all of the assets of the multi-strategy hedge fund at fair value,” Ned Kelly, president and chief executive of Citigroup Alternative Investments, said in the statement.
Old Lane had lost managers and investors since the fund was subsumed by Citigroup and has been unable to recover from capital withdrawals stemming from the fund’s purchase by the bank, according to The Wall Street Journal.
The fund was founded in 2005 and run by Mr. Pandit.
As part of the deal, he was named chief executive of Citigroup Alternative Investments.
In December of that year, Mr. Pandit was named the banking giant’s chief executive.