It’s not hard to understand why investors are running away from Citigroup (C) like it’s the plague. After all damage that’s been done there, every day brings more bad news.
FT says the company had to liquidate its Corporate Special Opportunities fund, after it fell 53% in October:
CSO, which managed almost $4.2bn at its peak, has a net asset value of about $58m and debt of about $880m, investors say. People familiar with the matter say investors in the fund are likely to receive no more than 10 cents on the dollar.
The fund faltered even though Citi supplied it with $450m in credit lines and equity infusions of about $320m. It also bought assets with a notional value of $1bn that it placed in the fund.
Investors in the fund – which invested mainly in debt backing European private equity deals – have not been allowed to withdraw their money for about a year as performance deteriorated. Losses for Citi could total hundreds of millions of dollars, people familiar with the matter said.
Awful. The piece notes that its the ninth fund liquidation for Citi in recent months.
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