Bloomberg reports that the bank disclosed the move, calling it a 'carve-out', in a footnote to a quarterly financial supplement posted on its website. The funds have been housed in the Citi Capital Advisors division, which was overseen by then-Chief Operating Officer Havens. He said in March that the company was looking to let managers take a 'significant' stake in the funds.
The deal was reached during Pandit’s final quarter as chief executive officer and may help Citigroup comply with the Volcker rule, which limits banks’ bets with shareholder money. The CCA unit holds about $5bn of Citigroup cash, as much as half of which is invested in the hedge funds, according to a person briefed on the situation. The carved-out entity would repay the money over time, the person said, requesting anonymity because the figures haven’t been disclosed.
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