Donal Griffin of Bloomberg News reports that Citigroup Inc. (C) has moved Ramakrishna Putcha, a former proprietary trader, into an internal hedge fund that makes bets with about $200 million of the firm’s money after the portfolio slid 14 percent last year.
Putcha, 61, was named co-portfolio manager of a credit fund in the Citi Capital Advisors unit, or CCA, according to Danielle Romero-Apsilos, a spokeswoman for the New York-based lender. For now, Citigroup owns about 97 percent of the fund and bank employees own the rest, according to a person with direct knowledge of the operation.
Chief Executive Officer Vikram Pandit, a colleague of Putcha’s for almost three decades, is among Wall Street bosses grappling with the new Volcker rule, which is designed to restrict banks from gambling with shareholders’ money through hedge funds and the proprietary trades that were Putcha’s specialty. The bank has said it will withdraw cash from hedge funds and replace it with cash from outside investors.