![]()
- Existing-Home Sales Jump to 2-1/2 Year High
- Wave of Debt Payments Facing US Government
- US Job Losses to Bottom out Next Quarter: NABE
- Obama Jobs Forum May Be More Political Than Practical
- Late Payments on Credit Cards Drop in Third Quarter
- Suze Orman’s 'A Healthier, Wealthier You'
- Latest Holiday Drinks: The Madoff...and the TARPatini
- Smallest US Businesses Borrowing Again: PayNet
- China Asks Its Banks to Slow Down Lending
- Expect a 'Square Root-Shaped' Recovery: Chief Investor
- Madoff—The Holiday Drink
- HP to Feed on Enterprise Spending Next Year: Tech Analyst
- This Holiday Season—Little Joy For Those Hard Hit
- Busch: Markets Smell a Country Rat
- Schork Oil Outlook: Mission Impossible For The Bears?
- S&P Stocks Trading at New 52-Week Highs
- Losey: Asset Allocation At Retirement
- Farrell: Obama Hectored, Ignored and Restricted?
MOST SHARED
- Existing-Home Sales Jump To Highest Level in 2-1/2 Years
- Wall Street Finds Profits by Reducing Mortgages
- Start-Up Proves Everything Really Is Better With Bacon
- CNBC VIDEO: Warren Buffett & Bill Gates 'Walk & Talk' at Columbia University
- Wave of Debt Payments Facing US Government
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Cadbury Hits New High as Bidders Circle
- China Asks Its Banks to Slow Down
Citigroup has barred investors in one of its hedge funds from withdrawing their money, and a new leveraged fund lost 52 percent in its first three months, the Wall Street Journal reported Friday.
![]() |
The largest U.S. bank suspended redemptions in CSO Partners, a fund specializing in corporate debt, after investors tried to pull more than 30 percent of its roughly $500 million of assets, the newspaper said. Citigroup injected $100 million to stabilize the fund, which lost 10.9 percent last year, the newspaper said.
The fund's manager, John Pickett, left following a dispute with Citigroup executives and complaints from investors after he tried to back out from committing more than half the fund's assets to buy leveraged loans tied to a German media company, the newspaper said. That matter was settled when CSO agreed to buy $746 million of the loans at face value, though they were trading at 86 percent to 93 percent of face value, it said.
Meanwhile, Falcon Plus Strategies, launched Sept. 30, lost 52 percent in the fourth quarter, after betting on mortgage-backed and preferred securities and making trades based on the relative values of municipal bonds and U.S. Treasuries. Some collateralized debt obligations in the fund trade at 25 percent of their original worth, the newspaper said.
Both funds are run in Citigroup's alternative investments unit. That unit was briefly headed last year by Vikram Pandit, who in December replaced Charles Prince as Citigroup's chief executive. Old Lane Partners, a hedge fund that Pandit founded and sold to Citigroup last year, has also had weak performance, falling 1.8 percent in January, the newspaper said.
Since June, Citigroup has disclosed some $30 billion of write-downs and losses tied to subprime mortgages, complex debt and deteriorating credit. The problems contributed to a record 9.83 billion fourth-quarter loss. Profit that quarter in the alternative investments unit fell 89 percent to $61 million.
Citigroup was not immediately available for comment. A spokesman told the newspaper that CSO and similar hedge funds are subject to comprehensive risk oversight, and that Falcon Plus's returns suffered from volatile fixed-income markets.
Shares of Citigroup [
Loading...
()
] closed Thursday at $25.74 on the New York Stock Exchange.
- Warren Buffett and Bill Gates discuss the economy and other subjects with CNBC's Becky Quick.
- The show attracts a big TV audience every year, but this year it may take on even more importance.
- …you'll want to be prepared. Tips for getting the most out of the post-Thanksgiving shopping frenzy.
- Congressman Ron Paul explains to Squawk Box why he’s pushing legislation to audit the Federal Reserve.
- A Macau casino will open Asia's first Michael Jackson shrine after its owners made a key purchase at a US auction.
- CNBC’s technology reporter Jim Goldman guides you through the best gadgets to buy this holiday season.














