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Old Lane Partners (Citigroup) - Alternative investment fund

2008-05-05

Count of distinct funds: 1
Capital base: $600 bn
Loss: $200 bn

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stories: finalternatives.com, bloomberg.com, reuters.com, finalternatives.com, citigroup.com

Update, 2008-06-12:

Finalternatives has summary coverage of the Old Lane shutdown.

2008-05-09:

We are re-classifying this as "imploded" as per this article. It seems if anything is salvaged from from Old Lane in a "restructuring", it will no longer be the old Old Lane.

2008-05-05:

Reports have emerged that Old Lane Partners, the hedge fund bought by Citigroup last fall and originally co-founded by Citigroup's new CEO Vikram Pandit, is seeing all unaffiliated investors redeem their investments.

Per Reuters:

Nearly all investors unaffiliated with the fund have requested to redeem their money from the fund, Citi said in a regulatory filing.

Citi bought Old Lane last year for more than $600 million, but the fund's performance has since been disappointing. Citi wrote down $200 million of intangible assets linked to the acquisition in the first quarter.

Citigroup claims that they currently have no plans to shutter Old Lane Partners. We wonder if this indecision is due to feelings that a vote of "no confidence" by all external investors is considered "good" nowadays or if they are merely trying to save face in light of the fund's history with Citi's current CEO, Mr. Pandit.

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Important: This fund is on our list of hedge funds that have "imploded" (see also ailing lenders). However, please note that "imploded" is a somewhat subjective. The "imploded" list contains hedge funds (or other unregulated and autonomous speculative investment funds) which have gone through some sort of permanent adverse change. This is a somewhat subjective call, and does not necessarily mean total shutdown or bankruptcy. It can also mean steep and rapid mark-downs in net asset value; or abnormal "bail-out" by corporate parents or peers in order to avoid write-downs and provide liquidity. The funds are of any type and sector.