Citi funds in trouble

Citigroup Inc has barred investors in one of its hedge funds from withdrawing their money, and a new leveraged fund lost 52 per cent in its first three months, the Wall Street Journal reported on Friday.

The largest US bank suspended redemptions in CSO Partners, a fund specializing in corporate debt, after investors tried to pull more than 30 per cent of its roughly 500 million of assets, the newspaper said. Citigroup injected 100 million to stabilise the fund, which lost 10.9 per cent last year, the newspaper said. The fund8217;s manager, John Pickett, left following a dispute with Citigroup executives and complaints from investors after he tried to back out from committing more than half the fund8217;s assets to buy leveraged loans tied to a German media company, the newspaper said. That matter was settled when CSO agreed to buy 746 million of the loans at face value, though they were trading at 86 per cent to 93 per cent of face value, it said.