Amid reports that Citigroup may buy the hedge fund Old Lane, The Financial Times writes that Citi’s chief executive, Charles Prince, once dismissed the notion of acquiring a hedge fund manager as the “flavor of the moment.” Breakingviews suggests Old Lane could bring both financial and personnel headaches for Citi.
The Wall Street Journal reported Monday that Citigroup was in talks to buy Old Lane for about $600 million, largely to get Vikram Pandit, a former Morgan Stanley executive, to the firm to run its alternative investment division. However, Hedge Fund Manager Week said that the price tag is likely to be higher.
Hedge Fund Manager also reported that a deal for Old Lane would include the purchase of a stake in a Toronto-based fund of hedge fund firm, Diversified Global Asset Management. If the deal goes through, Citigroup would take ownership of the one-third stake Old Lane already holds in the Candian hedge fund, which it acquired in late 2005 for an undisclosed amount, the report said.
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