hurricanemaxi
Registred
Joined: 17 Sep 2011
Posts: 48
|
 Posted: Mon Nov 07, 2011 1:51 pm Post subject: Citigroup Puts $800M in Own Hedge Funds |
 |
|
Citigroup Inc. (C), the third-biggest U.S. lender, invested about $800 million of shareholder’s money in its own private-equity and hedge funds during the third quarter as regulators seek to curtail the practice.
The bank invested the money in “Citi-advised” funds while selling $1.1 billion of separate hedge-fund and private-equity assets, New York-based Citigroup said in a Nov. 4 filing.
Regulators are drafting the so-called Volcker rule, which aims to restrict banks that accept deposits from making bets with shareholder money. The proposed rule would prohibit the banks from owning more than 3 percent of hedge funds and private-equity funds and also from investing more than 3 percent of Tier 1 capital in the funds.
“The $800 million of purchases primarily relate to funding of previously committed investments in Citi’s private-equity and hedge funds, which are more than offset by divestitures and liquidations,” Danielle Romero-Apsilos, a Citigroup spokeswoman, said in an e-mailed statement. “We continue to make significant progress toward meeting the requirements of the Volcker Funds portion of the new financial bill.”
The bank invested in funds managed by the Citi Capital Advisors unit, or CCA, which is run by former Morgan Stanley (MS) executives Jonathan Dorfman and James O’Brien. The division manages private-equity, venture-capital and hedge funds, according to its website. CCA’s managers seek to gain from assets including European corporate debt, subprime mortgage bonds and Indian infrastructure while also betting on global trends and emerging-market bonds.
$5 Billion
CCA manages about $5 billion of Citigroup’s money, a person familiar with the matter said in May. The division also handles money for external clients, a business that will be unaffected by the Volcker rule, which is named for former Federal Reserve Chairman Paul Volcker. CCA oversees about $18.8 billion in total, Romero-Apsilos said.
“Citi has a relatively low percentage of Tier 1 Capital deployed to hedge-fund and private-equity investments,” Romero- Apsilos said. “We are committed to growing our Citi Capital Advisors business as an institutional alternative asset manager of third-party investor capital.”
Funds in the Citi Holdings division also gained from the investments, Romero-Apsilos said. That unit had about $1 billion of assets in “retail alternative investments” at the end of September, according to a company presentation. Chief Executive Officer Vikram Pandit, 54, formed Citi Holdings to manage and sell unwanted assets after the bank received a $45 billion taxpayer bailout in 2008.
Parkside Village Condos
Passport Photos USA |
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
