Citigroup agreed to buy hedge fund Old Lane Partners as part of a deal that puts a former top executive at Morgan Stanley at the head of its alternative investments group. Citigroup, the global banking giant, has spent months courting the executive, Vikram Pandit, who left Morgan Stanley in 2005 after he was blocked for a chance at running the investment bank. Financial terms were not disclosed, but The New York Times reported Friday that the transaction was expected to cost $600 million to $800 million.
Charles Prince, Citigroup’s chairman and chief executive, called the Old Lane deal “an investment as much as it is an acquisition.” In a statement Friday, he said “it is an investment in world-class talent at Old Lane; in a senior leadership team with a track record of building profitable businesses in institutional securities; and an investment in Vikram and John, each of whom has a clear record of achievement in cutting-edge financial services spanning more than 20 years, to lead CAI.”
On Monday, Citigroup announced a plan to cut 17,000 jobs around the world and relocate 9,500 others as part of a sweeping plan to cut costs. Bloomberg News, citing an internal Citigroup memo, reported Friday that Citi’s alternative investments unit — the one that Mr. Pandit will lead — will not experience any layoffs under Monday’s plan.
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