Citi looks to rope in Vikram Pandit, may acquire his fund

NEW YORK: Citigroup is in talks to buy Old Lane, a hedge fund firm co-founded by Vikram Pandit, in a move that could put the former Morgan Stanley executive in line for a top job at the largest US bank, The Wall Street Journal said on Monday.

The purchase price for Old Lane could top $600 million, the newspaper said, citing people familiar with the matter. If a purchase is completed, Pandit would become chief executive of Citigroup’s alternative investments unit, the newspaper said.

Citigroup and Old Lane did not immediately return calls seeking comment. Old Lane is thought to have more than $4 billion of assets under management, the newspaper said. Pandit is a former head of Morgan Stanley’s institutional securities division.

Once considered a potential successor to former Morgan Stanley chief executive Philip Purcell, Pandit left the investment bank in March 2005 as part of an exodus of senior bankers and traders. He later founded Old Lane with John Havens, a former global head of equities at Morgan Stanley. If Pandit joins Citigroup, he might join a short list of potential successors to the bank’s chief executive, Charles Prince, who is 57.

The alternative investments unit is by far the smallest of Citigroup’s four main businesses. Last year, profit at the unit fell 11% to $1.28 billion, and revenue dropped 15% to $2.9 billion. The unit at year end oversaw $49.2 billion of assets, including $10.7 billion of Citigroup’s own money.