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September 22, 2005
The Citi never sleeps - especially when hedge funds are on the prowl
Crain's New York notes that "a prominent hedge fund manager is urging Citigroup to break itself up, arguing that the financial conglomerate is too large to grow significantly and snap its stock price out of its slumber."
Over at Bankstocks.com, the hedge fund manager (Thomas Brown) lays out his future vision for Citigroup:
"When the new crop of bigwigs at Citigroup sits down and starts to consider what direction the company should take, heres one alternative we hope they seriously consider: break Citi up into a group of constituent businesses, and let the value bloom. I should say up front I was never a big fan of the supermarket strategy that was behind the 1998 creation of the Citi monolith in the first place. Huge scale doesnt count for much in financial services, for one thing. And in financial services, smaller, focused players tend to outcompete large, diversified ones..."
The four units would consist of Citibank (retail banking); a revived Salomon Brothers investment banking juggernaut; a Smith Barney brokerage unit; and an international banking arm known as CitiGlobal. According to Brown, "The Citi is sleeping - break it up!"
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