The former co-heads of Citigroup fixed income Randy Barker and Geoff Coley are in the very early stages of planning a hedge fund, according to a Reuters report that cites people familiar with the matter.

The two are looking to hire traders and other employees and have had early conversations with potential investors, according to inside sources.

The fund would likely focus on distressed debt and other credit investment strategies, according to Reuters. However, because of Citigroup's supposedly taking on billions of dollars in bad positions under the watch of these two individuals, Reuters quoted experts saying that the two have many impediments to overcome in forming the fund.

Both men left the bank last year as the scope of Citigroup's credit problems first emerged after presiding over a group responsible for a significant portion of Citi’s more than $45 billion in credit losses during the last three quarters.

Coley declined to comment, and Barker did not return a call seeking comment, according to Reuters.

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