The castle-dweller, who Citi got rid of last year after the public got its panties in a bunch over his $100 million bonus and Vikram found himself between a rock and a hard place (that place being the US government’s steel-toed boot, just grazing his rectum), informed clients that the fund did everything right, just not right enough.
“Unfortunately, we did not dodge the onslaught,” Mr. Hall, 59 years old, wrote in a June 1 letter to his investors. “We did reduce risk but not fast enough. We did hedge but not well enough. And we did re-enter some markets that we had exited, prematurely, as it turned out.” His commodities fund posted a decline of more than 10% last month, its weakest month in the last two years, to put it down nearly 10% this year through May, which is behind similar hedge funds. Mr. Hall was bullish as shares of commodity producers and other energy investments declined.
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Citi has taken a lot of shit for (potentially) paying commodities trader Andrew “C” Hall a hundred million dollar bonus and you know what? They’re sick of it. Unfortunately there doesn’t seem to be much Vikram and Co can do to stop the relentless rounds of “you suck,” short of selling the whole damn thing. So, that’s exactly what they’re going to do. Just get rid of it. Nevermind that P-ro has been consistently profitable for 15 years. The bitching is too much to take. Moving forward, this will be the tactic Citi plans to take to solve all its problems. Got complaint about the bank? Air it in a public forum and it’s gone. Don’t care for Vikram? No problemo, he’s done.
Citigroup is working on a sale of its controversial commodities unit in a move that could raise hundreds of millions of dollars and deflect political anger over a potential $100m pay-out for its star trader Andrew Hall.
People close to the situation said that, after debating options such as divesting part of the unit, called Phibro, opening it up to outside investors or spinning it off, Citi’s executives favoured a complete divestment of the commodity trading division.