NEW YORK (AP) – Citigroup Inc. said Thursday that it is combining its investment banking and alternative investments units into one division led by a former Morgan Stanley executive.
The new Institutional Clients Group will be led by Vikram Pandit, who has been in charge of Citi's alternative investments unit since joining the company earlier this year.
Michael Klein, chairman and CEO of the investment banking unit, will jointly run that business with James Forese, a 22-year veteran of Citi who has led the Global Equities division for the last four years, the company said.
John Havens was named president and CEO of the alternative investment unit, and Guru Ramakrishnan remains president and CEO of that unit's Old Lane division.
Klein, Forese, Havens and Ramakrishnan will all report to Pandit.
“This new operating structure will enable us to continue to use our capital actively but in a more efficient way, keep moving towards higher margin businesses, continue to diversify our sources of business, and employ world class talent that has a relentless focus on serving our clients,” Citigroup Chairman and CEO Charles Prince said in a written statement.
Tom Maheras, who had been co-CEO of the investment banking unit, is leaving the company.
Pandit, 50, was a founding member of hedge fund and private equity manager Old Lane LP and came to Citigroup earlier this year then Citi acquired Old Lane. Before forming Old Lane, Pandit was president and chief operating officer of Morgan Stanley's institutional securities and investment banking business.
Citigroup is trying to boost performance as it and other banks deal with recent problems in the mortgage industry and financial markets.
Citi, the nation's largest bank, said last week that is expected its third-quarter profit to drop 60 percent because of losses of more than $3 billion from writing down securities backed by underperforming mortgages and loans tied to corporate buyouts.
The bank, which plans to report its third-quarter results Monday, also said its profit would be dampened after boosting loan loss reserves by about $2 billion.