Citigroup Inc. (NYSE:C) is reportedly mulling a rebranding of its lackluster alternatives investment unit, Citi Alternative Investments, or CAI, according to the Financial Times. This would be a poor use of company resources.
One of the new names reportedly being bandied about is Citi Capital Advisors. Why would CAI go through all the trouble for such a infinitesimal change? Apparently, it wouldn't be to distance itself from the baggage-laden Citi name. Perhaps, if there is any reasonable explanation, it might be that Citi thinks the term "alternatives" has a bad reputation, given all the blow-ups and scandal in the alternatives asset classes -- but this, even, is a stretch.
The name of the unit should be the least of the bank's worries. As Maria Woehr pointed out on Wednesday, one, if not the, fundamental issues at Citigroup is the lack of a cohesive, long-term strategy.
Indeed, it was the lack of a successful strategy that has in part weighed down CAI over the past two years. In September 2007, the firm shut down its $2 billion Tribeca Global Investments hedge fund to focus on its Old Lane multistrategy hedge fund platform, which it acquired from now-CEO Vikram Pandit. However, less than a year later, the bank was forced to shutter the Old Lane funds due to heavy losses and staggering client withdrawals. It also had to unwind its Falcon
Strategies hedge funds after suspending redemptions.
In between all that, CAI purchased hedge fund Carlton Hill, the founders of which hold managerial roles at CAI and have reportedly suggested renaming the unit Carlton Hill (perhaps the least remarkable name since Citi Alternative Investments). Apparently, though, the idea was shot down. At least we know that some good decisions are still being made at Citi. - Sara Behunek
Read the Financial Times' story here
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