Citigroup has shut the energy-trading business started in 2005 by hedge fund and private-equity manager Old Lane LP at Radnor Financial Center.
Citi offered a choice to unit boss Joseph Delaney, a dozen traders, a quantitative analyst, and the IT and admin staffs: move to New York, or take severance. Ex-Old Lane trader Steve Giblin, who moved his family from Virginia to join the Radnor desk, likes the Main Line so much that he took the package and is looking for a job here.
Citi paid what industry sources say was $890 million (including a $516 million premium above book value) for Old Lane last summer.
At the time, analysts said Citi was paying not so much for Old Lane’s traders or customer assets, but for its managers, led by ex-Morgan Stanley executives Vikram Pandit and John Havens.
Indeed, Pandit is now Citi’s CEO, Havens heads Citi investment bank, and Old Lane risk-management chief Brian Leach has taken the same job at Citi.
So far, the deal’s been better for the executives than for their old clients. Old Lane posted returns of 2.8 percent last year.
Citi declined comment on the status of Old Lane’s stock- and bond-trading desks.