By Katrina Dean Allen
After two expensive, messy and ultimately failed attempts at building a hedge fund business, Citi is trying again—with a new platform, a new name and a couple of former senior Morgan Stanley executives at the helm.
The bank made its first big splash into hedge funds in 2004, with the launch of Tribeca Global Management, and Citi executives boldly declared the firm's intention to raise $20 billion across some 50 strategies. But performance proved to be weak, and Citi shut down Tribeca three years later.
Citi's next attempt—the $800 million acquisition of former Morgan Stanley senior executive Vikram Pandit's $4.41n billion hedge fund Old Lane in 2007—was also a flop. Old Lane suffered losses and investor redemptions; the fund was shuttered barely a year after Citi bought it.
Given all the baggage, it's not surprising that investors are skeptical of the born-again Citi...