MarketWatch reports: Citigroup Inc. is buying Old Lane LP, an Indian hedge fund opened just 13 months ago by Vikram Pandit and a cohort of Morgan Stanley colleagues. The deal could be worth $800 million and result in Pandit being hired to head Citigroup’s alternative-investments division, putting him in the running to become chief executive of the world’s biggest bank, according to a media report Friday.
The deal is likely to be unveiled ahead of Citigroup’s annual meeting Tuesday, the Wall Street Journal reported in its online edition, citing unnamed people familiar with the negotiations.
Although Citigroup could pay more than $800 million for Old Lane, it’s possible that the announced price will be lower, with the total raised by future payments based on the fund’s performance, The Journal said. Old Lane employs some 125 traders, bankers and strategists, The Journal said, adding that in the 12 months through February, Old Lane’s investments have returned 6.9 percent, according to a person who has seen materials Old Lane sent to investors.
At Citigroup Alternative Investments, Pandit will inherit a business that has been leaderless since the departure last spring of Michael Carpenter, according to the report.
The unit, which runs private-equity and hedge funds, real-estate and structured products investment vehicles, is the smallest of Citigroup’s four main business lines and provided about 6 percent of the bank’s total profit last year, The Journal said.