Reaz Islam, the manager of Citigroup's Falcon and ASTA/MAT funds, which suffered major meltdowns in recent months, is leaving Citigroup, his home for the last 18 years.
Islam has been the focus of investor and Citigroup brokers' anger after the Falcon and ASTA/MAT funds went into a rapid and steep decline. The two fixed-income funds were marketed mainly to individual investors who thought the funds were low risk and managed conservatively.
However, the credit crunch has decimated both funds. Falcon lost more than 75% of its value and ASTA/MAT funds lost 77%. Last month, Citigroup took out $250 million to help their investors recoup some of their losses. But that wasn't enough to stop two lawsuits from being filed over the collapse of the funds and a group of Citi brokers from quitting in frustration.
Marc Friedfertig, an investor in Falcon, said he spoke to Islam several times about the fund and Islam had told him not to redeem his shares. Friedfertig suspects the funds weren't as safe as they were marketed to be.
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