Citigroup execs fear becoming hedge fund target

1 May 2007

Citigroup could become the target of activist hedge funds urging for the underperforming bank to be broken up, according to a report in the Financial Times (FT).

According to the London-based daily, fears that hedge funds will begin to target the company have been fuelled by Citigroup's persistent poor returns for investors and by the campaign headed up by The Children's Investment Fund that agitated for the break up of Dutch bank ABN Amro.

As a result Citigroup executives are calling for the company to outline the benefits of keeping the company together to its investors and to foster a climate of greater communication, the FT said.

News of concerns over the company's future comes as chief executive Charles O. Prince recently announced that he would be embarking on a series of cost-cutting measures that are intended to cut its operating costs by $2 billion and would result in the loss of 17,000 jobs.

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