Another black eye: Adding insult to injury, Citigroup was forced to shutter yet another hedge fund. Its Corporate Special Opportunities Fund which managed nearly $4.2 billion at its peak, now has a $58 million net asset value and has debt of around $880 million. It lost 53% of its value last month. Investors probably won't get more than 10 cents on the dollar back. This black eye for Vikram Pandit and Citigroup is the 9th time that the company closed or bailed out one of its funds in recent months:
The collapse represents the latest setback for Citi’s chief executive, Vikram Pandit, a former head of the alternative investment unit, who revealed plans on Monday to cut the bank’s headcount by 52,000. Citi shares fell 6 per cent on Tuesday to $8.36, giving it a market value of $45.5bn.....
The fund faltered even though Citi supplied it with $450m in credit lines and equity infusions of about $320m. It also bought assets with a notional value of $1bn that it placed in the fund.
Investors in the fund – which invested mainly in debt backing European private equity deals – have not been allowed to withdraw their money for about a year as performance deteriorated. Losses for Citi could total hundreds of millions of dollars, people familiar with the matter said.
The fund faltered even though Citi supplied it with $450m in credit lines and equity infusions of about $320m. It also bought assets with a notional value of $1bn that it placed in the fund.
Investors in the fund – which invested mainly in debt backing European private equity deals – have not been allowed to withdraw their money for about a year as performance deteriorated. Losses for Citi could total hundreds of millions of dollars, people familiar with the matter said.
Citigroup liquidates fund that fell 53% in a month - Financial Times
Citigroup is a true mess. Just shoot it and put it out of its misery.
Posted by: Vikrummy | November 19, 2008 at 08:58 AM