Citigroup buys fixed-income hedge fund specialized in credit derivatives

Discussion in 'Wall St. News' started by ASusilovic, Oct 31, 2007.

  1. Citigroup Inc.'s alternative investments unit agreed to buy Carlton Hill Global Capital LLC, a hedge fund specializing in credit derivatives.
    Carlton Hill, a New York firm with 12 employees, was founded last year by two Morgan Stanley alumni, James O'Brien and Jonathan Dorfman. Each of them spent roughly 20 years in Morgan Stanley's fixed-income division. The pair will now head the global fixed-income group in Citi Alternative Investments, according to a memo Tuesday from CAI's chief, John Havens.
    Carlton Hill hasn't yet launched a fund, but plans to by the end of the year, according to Citigroup spokesman Jon Diat. The group has more than $150 million in equity commitments, Diat said. Terms of the acquisition weren't disclosed.
    This is the second time this year that Citigroup has bought a relatively untested hedge fund run by ex-Morgan Stanley traders.
    In July, Citigroup closed on a deal to buy Old Lane Partners, run by Morgan Stanley alumni Havens and Vikram Pandit, for more than $800 million. At the time, Old Lane had been operating for barely a year and had posted lackluster returns. Pandit was recently coronated as head of Citi's investment banking group.
    Citigroup is buying Carlton Hill after the big New York bank suffered a dismal third quarter, weighed down by turmoil in global credit markets. In the wake of that performance, Citigroup shook up the management of its investment bank, ousting some of its top fixed-income traders and executives.
    "The Carlton Hill team brings us extensive credit markets expertise that will significantly enhance our capabilities in developing and offering credit-based products for CAI's customers," Havens said in the memo.{1EBC4CC9-35E8-4EAC-8010-215EF297E695}

    Wise decision. Citi needs really some help in credit derivatives...:D :D :D
  2. Yawn...

    Another sophisticated skimming operation.