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Vikram Pandit Forced to Bail Out His Own Unit
How great of an executive is Citigroup's Vikram Pandit? Well, he's good at making a lot of money: he sold his young hedge-fund shop, Old Lane Partners, to Citi for something north of $600 million. Old Lane was then incorporated into Citi's alternative investments unit, and Pandit was put in charge. Today, we learn that Pandit, by now the CEO of the parent company, is throwing $1 billion of shareholders' capital at that unit, in an attempt "to shore up six of its hedge funds pressured by a tightening in the municipal bond market".
In other words, Pandit didn't really run Old Lane so much as sell it; and after he was given a genuinely large asset-management operation to run, it performed very badly.
A big fixed income hedge fund, Falcon Strategies, fell more than 30 percent last year after betting wrongly that the worst of last summer's market turmoil was over. And Old Lane Partners, the investment fund founded by Mr. Pandit, has posted dismal results.
Just the man to run the largest bank in the world, no?
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