Citi acquires Morgan Stanley spin-out(3)

Citi Alternative Investments has completed its acquisition of Old Lane Partners, a $4.5 billion hedge and private equity fund manager launched last year by Morgan Stanley alumni.

Citi has acquired 100 percent of the outstanding partnership interests in Old Lane Partners, a $4.5 billion (€3.3 billion) hedge and private equity fund manager founded by former Morgan Stanley executives who quit the investment bank in 2005. New York-based Old Lane now operates as part of Citi Alternative Investments.

“This transaction is an investment as much as it is an acquisition,” Citi chief executive officer Charles Prince said in an April statement, when the agreement was initially announced. “It is an investment in world-class talent at Old Lane.”

Nearly all of Old Lane’s co-founders have taken on senior roles within Citi Alternative Investments. Vikram Pandit is the group’s CEO, John Havens is president and George James is vice chairman. Most of Old Lane’s founders have joined Citi’s Management Committee, including Guru Ramakrishnan, who is now Old Lane’s president and CEO.

Though financial terms of the deal weren’t disclosed, reports have estimated the transaction to have been worth approximately $600 million to $800 million.

“Old Lane represents for us a unique opportunity to continue our growth in the highly competitive alternative investment area,” Prince said. The acquisition will give Citi Alternative Investments “a powerful combination of tremendous talent and a formidable platform, with $59 billion in assets, exciting growth potential and the ability to attract world-class talent”.

Founded in 2006, Old Lane has 16 members and 120 employees at offices in New York; Radnor, Pennsylvania; London; Mumbai; and Chennai.