Citigroup Inc. is closing a $400 million convertible arbitrage fund, the final step in winding down its $2 billion Tribeca Global Investments group.

According to people close to the fund, Tribeca Convertible LP has been hurt by investor redemptions.

The closure of Tribeca Global, set up in 2004 with a goal of attracting as much as $20 billion, comes as Citigroup struggles with its alternative-asset management unit. The bank most recently shuttered Old Lane Partners, the hedge fund Chief Executive Officer Vikram Pandit co-founded and sold to the bank last year. Citigroup in March started closing its Falcon Strategies hedge funds after suspending redemptions.

The fund has lost close to 5 per cent so far this year. The Hedgeweb Convertible Arbitrage Index was down 0.81 per cent in June.