A client of Citigroup’s Private Bank just received the note below from a Fund of Funds that Citi advised him to invest in: Arden Institutional Advisers (Feeder). Like other FOFs, Arden did fine for a while, making the client, the underlying funds, Arden Asset Management, and Citigroup richer. Then it cratered.
Citi’s client submitted his withdrawal request to his Citi private banker in the fall of last year, after being talked out of redeeming on two occasions over the course of a year. The Citi private banker told the client he would get his money in January 2009. In the months since, Arden has continued to lose money. Yesterday, four days before the end of “January 2009”, the client received the note below, informing him that he wouldn’t be getting all of his money.
Citi’s private banker who put the client into the fund did not deliver this message. It arrived at his house in a package addressed to “Dear Arden Investor.”
The client is now concerned that Arden Institutional Advisers was yet another Madoff feeder fund. Not that his Citi private banker has reached out to discuss it.
The exceptional private-banking services Citigroup offers apparently don’t include calling clients to deliver bad news.