Citigroup Reached Deal to Carve Out Hedge Funds Before Shakeup
Citigroup Inc. agreed to move a stable of internal hedge funds to an entity controlled by "certain employees" in a deal reached before the bank's top two executives, Vikram Pandit and John Havens , left this week.
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#1 Oct 20, 2012
That's a good move for Citi and for its shareholders. Getting closer to being a bank again may serve the company at this point. The Hedge Fund business, by its name should reduce risk. The hedging should hedge different asset moves and provide for lower volatility.
But in reality we all know it ended up increasing volatility and risk. Since we all have to save Citi if it fails that's a good thing for all of us that the company risk, at least as it relates to this deal, is going down.
The capital losses that such hedge funds cause from time to time are damaging to the wealth creation of Citi's shareholders. Read Earn $370,000 in 10 Days? http://rsilberman.com/... - to see how devastating it is for a company to lose money. The article shows that if you could know what the worst 10 days in the stock market have been for the past 20 years and void them, you wold double your money compared to the index. 10 days only!. Same works for companies who lose money.
“Reverse mortgage loan Texas”
Since: Sep 12
#2 Nov 11, 2012
The deal was reached during Pandit’s final quarter as chief executive officer and may help Citigroup comply with the Volcker rule, which limits banks’ bets with shareholder money. The CCA unit holds about $5 billion of Citigroup cash, as much as half of which is invested in the hedge funds, according to a person briefed on the situation. The carved-out entity would repay the money over time, the person said, requesting anonymity because the figures haven’t been disclosed.
Citi has begun transitioning certain CCA businesses from being wholly Citi-owned to being owned primarily by management,” said Danielle Romero-Apsilos, a spokeswoman for the New York-based lender.“As we announced earlier this year, this will allow us to facilitate our compliance with regulatory obligations.
Since: Oct 12
#3 Nov 11, 2012
Citi has begun transitioning certain CCA businesses from being wholly Citi-owned to being owned primarily by management,” said Danielle Romero-Apsilos???
The deal was reached during Pandit’s final quarter as chief executive officer???
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