Citi to shutter Old Lane

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The hedge fund that Citigroup’s new chief executive, Vikram Pandit, sold to the bank eleven months ago is being shut down amid losses and investor redemptions. So far in 2008, the fund is down 4% and is flat since inception.

Citi paid more than $800 million for Old Lane Partners, which had amassed about $4.5 billion before it was sold to the bank. Launched in April 2006, it returned 6.5% during its first 12 months but struggled last year, ending the year with a 2.8% gain.

Citi closed on the deal just as the credit crisis erupted, and the