Fidelity's $1.2B Citi investment sours

Boston’s largest money managers could be facing roughly $1 billion in losses tied to Citigroup Inc. stock as the troubled Wall Street titan continues to report massive financial losses and is rumored to be in late-stage negotiations for a regulator-led takeover.

Area mutual fund companies owned close to 220 million shares of Citigroup (NYSE: C) at the end of 2008, a stake worth more than $1.5 billion.

Most exposed: Boston’s Fidelity Investments, which more than doubled its ownership in Citigroup in the fourth quarter by purchasing more than 100 million Citi shares, according to regulatory filings. As of Dec. 31, Fidelity’s Citi stake totaled 176 million shares worth $1.18 billion.

All things being equal, that stake would now be worth around $378 million.

Citigroup’s stock is down 68 percent year-to-date, trading at around $2.14 a share Monday after opening the year at $6.69 a share. The bank’s problems have triggered multiple billion-dollar investments by the U.S. government to shore up its capital position. The government is also discussing a possible bailout that would essentially nationalize Citi, according to multiple reports.

Wellington Asset Management also added to its Citi stake in the fourth quarter, buying 20 million. Its holdings totaled 55.4 million shares worth $370 million as of Dec. 31.

Among the area’s other major investment firms holding Citi stock as of Dec. 31:

• Bank of America Corp. (NYSE: BAC), through its Columbia Asset Management division, owned 25.6 million shares worth around $168 million.

• Putnam Investments owned 15 million shares worth $99 million.

• Eaton Vance Corp. (NYSE: EV) owned 4.2 million shares worth more than $28 million.

• MFS Investment Management held 3.7 million shares worth roughly $25 million.