Citigroup has barred investors in one of its hedge funds from withdrawing their money.

The largest bank in the U.S has temporarily stopped redemptions in CSO Partners, a fund specialising in corporate debt.

Citigroup injected US$100 million to stabilise the fund after investors tried to pull more than 30 per cent of its roughly US$500 million of assets.

Some investors had tried to back out of the fund after Citigroup managers committed more than half the fund's assets to buy leveraged loans tied to a German media company.