Investments with outside managers are a "small portion" of the bank's $1.45 billion "strategic capital portfolio," Fine said in a phone interview. Few Choices Pandit may have had few choices as he considered CCA's future, according to Charles Whitehead, a law professor at Cornell University who's written about the Volcker rule. Shutting the funds and quickly withdrawing Citigroup's cash could result in losses because the money may be tied up in complicated bets, while granting managers a stake in the new firm could provide incentive to improve returns and maximize the bank's stake, he said in a phone interview. "Giving them 75 percent to divide up among themselves -- that's a pretty strong incentive," said Whitehead, a former Citigroup executive who has no knowledge of the bank's hedge- fund strategy. The new firm's structure was based in part on Overland Advisors LLC, a hedge fund that traces its roots to Wells Fargo & Co., according to a person with knowledge of the matter.