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{{Short description|American hedge fund and financial services provider}}{{About|the hedge fund|market maker|Citadel Securities|the military college|The Citadel|other uses|Citadel (disambiguation)|and|The Citadel (disambiguation)}}{{Use mdy dates|date=February 2013}}

factoids

Kenneth C. Griffin>Kenneth Griffin| location = Southeast Financial Center, Miami, Florida, U.S.Kenneth Griffin (CEO & Co-CIO)Gerald A. Beeson (COO)|Ben Bernanke (Senior Advisor)}}WORK=BLOOMBERG NEWS URL-STATUS=LIVE ARCHIVE-URL=HTTPS://WEB.ARCHIVE.ORG/WEB/20200820135523/HTTPS://WWW.BLOOMBERG.COM/BILLIONAIRES/PROFILES/KENNETH-C-GRIFFIN/, August 20, 2020, DATE=15 AUGUST 2022 U.S. SECURITIES AND EXCHANGE COMMISSION, {{rp>page=27}}| products = Alternative investments| revenue = | subsid = www.citadel.com|citadel.com}}WEBSITE=FINANCIAL TIMES, 23 January 2023, }}Citadel LLC (formerly known as Citadel Investment Group, LLC) is an American multinational hedge fund and financial services company. Founded in 1990 by Ken Griffin, it has more than $58 billion in assets under management {{as of|2024|1|lc=y}}. The company has over 2,800 employees,WEB, 2023-04-05, Multistrategy hedge funds: Who are they? How do you get a job there?,www.efinancialcareers.com/news/2023/04/citadel-millennium-balyasny-exoduspoint, 2024-03-26, eFinancialCareers, en-US, with corporate headquarters in Miami, Florida,WEB,www.citadel.com/about-citadel/, About Citadel, Citadel, 23 August 2022, Miami Global Headquarters Southeast Financial Center 200 S. Biscayne Blvd. Miami, FL 33131, {{r|adv|page=1}} and offices throughout North America, Asia, and Europe. Founder, CEO and Co-CIO Griffin owns approximately 85% of the firm.NEWS, Bloomberg Billionaires Index, Bloomberg L.P.,www.bloomberg.com/billionaires/profiles/kenneth-c-griffin/, live,web.archive.org/web/20200820135523/https://www.bloomberg.com/billionaires/profiles/kenneth-c-griffin/, August 20, 2020, As of December 2022, Citadel is one of the most profitable hedge funds in the world, posting $74 billion in net gains since its inception in 1990, making it the most successful hedge fund in history, according to CNBC.WEB, Tucker, Hank, Citadel’s $16 Billion Gain In 2022 Makes Ken Griffin’s Flagship The Top-Earning Hedge Fund Ever,www.forbes.com/sites/hanktucker/2023/01/22/citadels-16-billion-gain-in-2022-makes-ken-griffins-firm-the-top-earning-hedge-fund-ever/, 2023-05-20, Forbes, en, WEB, Gilchrist, Karen, 2024-01-23, World’s largest hedge funds record bumper year of profits, research shows,www.cnbc.com/2024/01/23/worlds-largest-hedge-funds-record-bumper-year-of-profits.html, 2024-03-26, CNBC, en, Citadel LLC is a separate entity from the market maker Citadel Securities, although both were founded and are owned by Griffin.NEWS, Phillips, Matt, Kelly, Kate, 2021-02-18, A Shadowy but Powerful Wall St. Firm Has Its Moment in Washington, en-US, The New York Times,www.nytimes.com/2021/02/17/business/citadel-game-stop-hearing.html, 2022-05-05, 0362-4331,

History

Kenneth Griffin started his trading career out of his dorm room at Harvard University in 1987, trading convertible bonds.NEWS, Strasburg, Jenny, Zuckerman, Gregory, Hedge Fund Selling Puts New Stress on Market, The Wall Street Journal, November 7, 2008,www.wsj.com/articles/SB122602205734807307, live, subscription,web.archive.org/web/20170903143845/https://www.wsj.com/articles/SB122602205734807307, September 3, 2017, 0099-9660, As a sophomore, he hooked a satellite dish to the roof of his dormitory.NEWS, Meyer, Graham, 8 June 2011, The File on Citadel’s Ken Griffin, en, Chicago Magazine, Politics & City Life,www.chicagomag.com/Chicago-Magazine/June-2011/The-File-on-Citadels-Ken-Griffin/, live, 11 March 2015,web.archive.org/web/20191214003226/https://www.chicagomag.com/Chicago-Magazine/June-2011/The-File-on-Citadels-Ken-Griffin/, December 14, 2019, 0362-4595, After graduating with a degree in economics, Griffin joined Chicago-based hedge fund Glenwood Partners. Citadel was started with $4.6 million in capital.NEWS, Ahmed, Azam, Craig, Susanne, 11 August 2011, Citadel Chief Gives Up Dream for Investment Bank, en, The New York Times, DealBook, United States,dealbook.nytimes.com/2011/08/11/citadel-chief-gives-up-dream-for-investment-bank/, live, limited, 25 February 2015,dealbook.nytimes.com/2011/08/11/citadel-chief-gives-up-dream-for-investment-bank/," title="web.archive.org/web/20151016135240dealbook.nytimes.com/2011/08/11/citadel-chief-gives-up-dream-for-investment-bank/,">web.archive.org/web/20151016135240dealbook.nytimes.com/2011/08/11/citadel-chief-gives-up-dream-for-investment-bank/, October 16, 2015, 1553-8095, Citadel was originally named Wellington Financial Group after its flagship fund. The company name was changed to Citadel in 1994. Within eight years, the firm had more than $2 billion in assets under management.NEWS, Lux, Hal, 31 August 2001, Boy Wonder, en, The Institutional Investor. Cfo Directory, United States,www.institutionalinvestor.com/article/b15134ls4fblx7/boy-wonder, live, limited, 24 July 2015,web.archive.org/web/20200221235604/https://www.institutionalinvestor.com/article/b15134ls4fblx7/boy-wonder, February 21, 2020, 0020-3580, In 1998, Citadel started requiring investors to accept terms that “significantly restrict[ed] their ability to withdraw their capital”, according to Institutional Investor. When hedge fund Long Term Capital Management collapsed later that year, Citadel’s capital lockdown made it “a rare buyer, as desperate hedge funds unloaded bond inventory”. In 2006, Citadel and JP Morgan Chase took over the energy portfolio and division of failed hedge fund Amaranth Advisors, which had suffered a 65% ($6 billion) loss in assets. In November 2006 Citadel issued $2 billion of investment grade bonds to borrow money at a lower rate than it would otherwise be able to.NEWS, Cox, Rob, Christy, John, 30 November 2006, Hedge Fund Citadel Finds a Way To Keep Financial Independence, en, The Wall Street Journal. Eastern Edition, BreakingViews, United States,www.wsj.com/articles/SB116485503536736551, live, subscription, 17 December 2019,web.archive.org/web/20191218020823/https://www.wsj.com/articles/SB116485503536736551, December 18, 2019, 0099-9660, In 2001, Griffin began recruiting the energy traders from Enron the day after it collapsed for a new business including “a team of traders, meteorologists and researchers” building amongst the industries biggest energy trading groups at the time.In 2007, Citadel invested $2.5 billion in E-Trade. This transaction included acquiring E-Trade’s securitized subprime mortgages, collateralized debt obligations (CDOs) and second lien loans, as well as 12.5% senior unsecured notes, and 84,687,686 shares of common stock (equal to 19.99% of the then currently outstanding shares). Citadel received a seat on the board of directors.PRESS RELEASE,www.sec.gov/Archives/edgar/data/1015780/000095010307002929/dp07754_ex9901.htm, E*TRADE Financial Announces $2.5 Billion Investment Led by Citadel, E*Trade Financial, U.S. Securities and Exchange Commission, November 29, 2007, NEWS,www.chicagotribune.com/news/ct-xpm-2007-11-30-0711291062-story.html, Citadel boosts E-Trade stake with $2.5 billion investment, Becky, Yerak, Chicago Tribune, November 30, 2007, Citadel sold its remaining stake in E*Trade in 2013.NEWS,www.reuters.com/article/us-etrade-citadel-sale/citadel-to-sell-its-remaining-stake-in-etrade-idINBRE92C1GG20130313, Citadel to sell its remaining stake in E*Trade, Reuters, March 13, 2013, During the financial crisis of 2007–2008, for 10 months, Griffin barred his investors from withdrawing money, attracting criticism.NEWS, Copeland, Rob, Citadel’s Ken Griffin Leaves 2008 Tumble Far Behind, The Wall Street Journal,www.wsj.com/articles/citadels-ken-griffin-leaves-2008-tumble-far-behind-1438655887, live, August 3, 2015, subscription, 0099-9660, December 13, 2019,web.archive.org/web/20191213184817/https://www.wsj.com/articles/citadels-ken-griffin-leaves-2008-tumble-far-behind-1438655887, NEWS,www.chicagotribune.com/news/ct-xpm-2008-12-13-0812120300-story.html, Citadel suspends fund redemptions, Joshua, Boak, Chicago Tribune, December 13, 2008, limited, At the peak of the crisis, the firm was losing “hundreds of millions of dollars each week”.NEWS,www.ft.com/content/ae51320a-1a24-11e3-93e8-00144feab7de, Citadel chief rails against megabanks, Financial Times, September 10, 2013, subscription, It was leveraged 7:1 and the biggest funds at Citadel finished 2008 down 55%. However, they rebounded with a 62% return in 2009.NEWS, The File on Citadel’s Ken Griffin,www.chicagomag.com/Chicago-Magazine/June-2011/The-File-on-Citadels-Ken-Griffin/, Meyer, Graham, Chicago (magazine), Chicago, June 8, 2011, 0362-4595, December 14, 2019,web.archive.org/web/20191214003226/https://www.chicagomag.com/Chicago-Magazine/June-2011/The-File-on-Citadels-Ken-Griffin/, live, On January 17, 2012, Citadel’s flagship funds, Citadel Kensington Global Strategies Fund Ltd and Citadel Wellington LLC, crossed their respective high watermarks, earning back the 50% of assets lost during the 2008 financial crisis.NEWS, Ahmed, Azam, 20 January 2012, Citadel Clears Its High Water Mark, The New York Times, DealBook, United States,dealbook.nytimes.com/2012/01/20/citadel-clears-its-high-water-mark/, live, limited,dealbook.nytimes.com/2012/01/20/citadel-clears-its-high-water-mark/," title="web.archive.org/web/20151023022130dealbook.nytimes.com/2012/01/20/citadel-clears-its-high-water-mark/,">web.archive.org/web/20151023022130dealbook.nytimes.com/2012/01/20/citadel-clears-its-high-water-mark/, October 23, 2015, 1553-8095, Having made up the losses, Citadel could once again charge client fees for managing their money and take a percentage of profits. Citadel under Griffin’s leadership was reported as differentiating from hedge funds rivals post-2008 financial crisis with an “aggressive expansion”. Starting at the beginning of 2014, over an 18 months period the hedge fund’s assets under management increased $10 billion; from $16 billion to $26 billion as a result of “a 29% rise for its main hedge funds and a flow of new cash”.NEWS, Copeland, Rob, 3 August 2015, Citadel’s Ken Griffin Leaves 2008 Tumble Far Behind, en, The Wall Street Journal. Eastern Edition, Markets, United States,www.wsj.com/articles/citadels-ken-griffin-leaves-2008-tumble-far-behind-1438655887, live, subscription, 23 October 2015,web.archive.org/web/20191213184817/https://www.wsj.com/articles/citadels-ken-griffin-leaves-2008-tumble-far-behind-1438655887, December 13, 2019, 0099-9660, In January 2020, Citadel Securities paid a $97 million settlement to China, after Chinese regulators ended a long-standing investigation into Citadel and other companies.WEB, Citadel Securities Pays $97m to Settle with China Regulators,www.financemagnates.com/institutional-forex/regulation/citadel-securities-fined-97m-in-china-for-malicious-short-selling/, live,web.archive.org/web/20200728152703/https://www.financemagnates.com/institutional-forex/regulation/citadel-securities-fined-97m-in-china-for-malicious-short-selling/, July 28, 2020, January 21, 2020, During the coronavirus pandemic Citadel LLC created a “bubble” for a class of 100 interns by renting out a luxury resort in Wisconsin.WEB, Saacks, Bradley, How $34 billion hedge fund Citadel rented out a five-star resort for a month to pull off an in-person summer internship ‘bubble’ for more than 100 college students,www.businessinsider.com/citadel-remote-summer-internship-wisconsin-resort-palm-beach-2020-8, live,web.archive.org/web/20200830175237/https://www.businessinsider.com/citadel-remote-summer-internship-wisconsin-resort-palm-beach-2020-8, August 30, 2020, 2020-09-06, Business Insider, WEB, Shazar, Jon, Ken’s Kwarantine Kamp Opens Kohler Location For Eager Interns,dealbreaker.com/2020/08/citadel-internship-wisconsin, 2020-09-09, Dealbreaker, en-us, NEWS, Echikson, Julia, Mazzei, Patricia, 2020-04-07, No Trading Floor? No Problem. A Financial Firm Quarantines at the Four Seasons., en-US, The New York Times,www.nytimes.com/2020/04/07/us/coronavirus-citadel-securities-four-seasons-florida.html, live, 2020-10-13,web.archive.org/web/20201014184835/https://www.nytimes.com/2020/04/07/us/coronavirus-citadel-securities-four-seasons-florida.html, October 14, 2020, 0362-4331, In January 2021, Citadel and Point72 Asset Management invested $2.75 billion in Melvin Capital, after Melvin Capital lost 53% of its value owing to the GameStop short squeeze.NEWS, Chung, Juliet, 2021-01-25, The Wall Street Journal News Exclusive {{!, Citadel, Point72 to Invest $2.75 Billion Into Melvin Capital Management |language=en-US |work=The Wall Street Journal |url=https://www.wsj.com/articles/citadel-point72-to-invest-2-75-billion-into-melvin-capital-management-11611604340 |access-date=2021-01-25 |issn=0099-9660}}NEWS, McCabe, Caitlin, 2021-01-14, GameStop Stock Soars, and Social-Media Traders Claim Victory, en-US, The Wall Street Journal,www.wsj.com/articles/gamestop-stock-soars-and-social-media-traders-claim-victory-11610653679, 2021-01-23, 0099-9660, NEWS, Chung, Juliet, 2021-01-22, The Wall Street Journal News Exclusive {{!, Short Bets Pummel Hot Hedge Fund Melvin Capital |language=en-US |work=The Wall Street Journal |url=https://www.wsj.com/articles/short-bets-pummel-hot-hedge-fund-melvin-capital-11611349217 |access-date=2021-01-23 |issn=0099-9660}}WEB, 2021-01-25, Ken Griffin’s $2 billion bet,www.chicagobusiness.com/finance-banking/ken-griffins-2-billion-bet, 2021-01-25, Crain’s Chicago Business, en, In a letter to employees on June 23, 2022, Griffin announced they would be moving their headquarters to Miami, Florida, due to a more favorable business climate and increased crime complaints in Chicago.NEWS, McCormick, John, Chung, Juliet,www.wsj.com/articles/ken-griffin-moving-citadel-from-chicago-to-miami-following-crime-complaints-11655994600, Ken Griffin Moving Citadel From Chicago to Miami Following Crime Complaints, The Wall Street Journal, 2022-06-23, 2022-06-23, NEWS,www.ft.com/content/9a25dc71-d26f-43b0-87cb-9bff3b9746c9, Financial Times, Ken Griffin’s Citadel ditches Chicago for Miami following crime complaints, Hedge fund is latest US company to depart Illinois in less than two months, November 9, 2022, WEB,www.bloomberg.com/news/articles/2022-06-23/-punch-in-the-gut-for-chicago-griffin-citadel-move-stuns-city, Ken Griffin’s Citadel Move Is ‘Punch in the Gut’ for Chicago, Shruti Singh, Bloomberg, June 23, 2022, November 9, 2022, In December 2022, Citadel signed a deal with Vornado Realty Trust and Rudin Management Co. to master lease a new $1.2 billion, {{convert|1500|ft|m}} office tower to be constructed on Park Avenue in Midtown Manhattan to serve as Citadel’s new New York City headquarters.WEB,www.globest.com/2022/12/13/vornado-reaches-deal-to-build-1-2b-park-avenue-tower/?amp=1, Vornado Reaches Deal to Build $1.2B Park Avenue Tower, Jack Rogers, ALM Global, December 13, 2022, March 16, 2024,

Activities

Citadel

As of January 2024, Citadel managed more than $58 billion in capital and was one of the world’s largest asset managers.NEWS, Mandl, Carolina, 12 December 2023, Ken Griffin’s Citadel to return about $7 bln in profit to investors -source,www.reuters.com/business/finance/ken-griffins-citadel-return-about-7-bln-profit-investors-source-2023-12-12/, Reuters, WEB, Kolhatkar, Sheelah, 16 April 2007, Opening Up the Citadel,upstart.bizjournals.com/executives/features/2007/04/16/opening-up-the-citadel.html?page=all, live,upstart.bizjournals.com/executives/features/2007/04/16/Opening-Up-the-Citadel.html?page=all," title="web.archive.org/web/20150226151755upstart.bizjournals.com/executives/features/2007/04/16/Opening-Up-the-Citadel.html?page=all,">web.archive.org/web/20150226151755upstart.bizjournals.com/executives/features/2007/04/16/Opening-Up-the-Citadel.html?page=all, February 26, 2015, 24 February 2015, Upstart Business Journal, Citadel ranks as the eleventh largest hedge fund manager in the world,Rose-Smith, Imogen (2006 2006). “Land of the Giants” (PDF). Alpha magazine. p. 3. Retrieved 2008-03-20 {{dead link|date=July 2022}}. and in 2023 the second largest multi-strategy hedge fund globally.NEWS, 2024-01-22, Hedge Funds Cap a Bumper Year for Profits,www.bloomberg.com/news/articles/2024-01-22/hedge-funds-cap-bumper-year-for-profits-tci-citadel-lead-pack, 2024-03-26, Bloomberg.com, en, Citadel’s group of hedge funds rank among the largest and most successful hedge funds in the world.WEB, Allen, Susie, Huang, Wen, 15 July 2014, Two new members elected to University of Chicago Board of Trustees,news.uchicago.edu/article/2014/07/15/two-new-members-elected-university-chicago-board-trustees, live,news.uchicago.edu/article/2014/07/15/two-new-members-elected-university-chicago-board-trustees," title="web.archive.org/web/20150210072517news.uchicago.edu/article/2014/07/15/two-new-members-elected-university-chicago-board-trustees,">web.archive.org/web/20150210072517news.uchicago.edu/article/2014/07/15/two-new-members-elected-university-chicago-board-trustees, February 10, 2015, 24 February 2015, U Chicago News, In 2014, Citadel became the first foreign hedge fund to complete a yuan fundraising as part of a program to allow Chinese investors to invest in overseas hedge funds.NEWS, Bill Alpert, February 28, 2015, Exclusive: Who Makes Money on Your Stock Trades, Barron’s,online.barrons.com/articles/SB51367578116875004693704580480163105061670, live, July 27, 2015,online.barrons.com/articles/SB51367578116875004693704580480163105061670," title="web.archive.org/web/20150802201325online.barrons.com/articles/SB51367578116875004693704580480163105061670,">web.archive.org/web/20150802201325online.barrons.com/articles/SB51367578116875004693704580480163105061670, August 2, 2015, In 2021, Citadel ranked second among the top money managers for net gains.NEWS, Kumar, Nishant, These Are the World’s Top Hedge Funds for 2021,www.bloomberg.com/news/articles/2022-01-17/tci-leads-top-hedge-funds-creating-record-65-4-billion-in-gains, Bloomberg.com, 17 January 2022, limited,archive.today/20220117073718/https://www.bloomberg.com/news/articles/2022-01-17/tci-leads-top-hedge-funds-creating-record-65-4-billion-in-gains, 17 January 2022, live, In 2022, Citadel’s hedge fund unit posted its record year of revenues to date, generating about $28 billion in revenue.NEWS, Citadel posts record revenues for hedge fund, securities ops in 2022, Reuters, January 5, 2023,www.reuters.com/article/usa-funds-citadel-idCAL4N33Q371, Citadel returned $16 billion to its clients in 2022, which was a record annual return for both the fund of American investor Kenneth Griffin and the entire industry. In addition, this allowed Citadel to overtake Bridgewater in the list of the most profitable hedge funds in history according to experts from LCH Investments.NEWS, Kirill Sarkhanyants, 2023-01-23, Citadel becomes the most profitable hedge fund in history,www.kommersant.ru/doc/5783572, In 2023, Citadel returned about $7 billion in profits to its clients, which amounted to about a 15% return for its flagship fund.NEWS, Rudegeair, Peter, WSJ News Exclusive {{!, Citadel Is Handing Back About $7 Billion in Profits to Clients |url=https://www.wsj.com/finance/investing/citadel-is-handing-back-about-7-billion-in-profits-to-clients-ee573657 |access-date=2024-03-26 |work=WSJ |language=en-US}}

Investment strategies

Citadel manages funds across five different investment strategies including equities, commodities, fixed income, quantitative strategies, and credit.WEB, Michael J. De La Merced, January 10, 2013, Citadel Posted 25% Return Last Year, Beating Industry Again,dealbook.nytimes.com/2013/01/10/citadel-posted-25-return-last-year-beating-industry-again/?_r=1, live,web.archive.org/web/20170916053210/https://dealbook.nytimes.com/2013/01/10/citadel-posted-25-return-last-year-beating-industry-again/?_r=1, September 16, 2017, July 27, 2015, DealBook,

Reinsurance

Citadel wanted to allocate the investment capital with its two funds, Kensington Global Strategies Fund Ltd and Citadel Wellington LLC, to investments that the company thought to be uncorrelated to their other investment strategies.NEWS, Zuill, Lilla, Orr, Bernard, 7 November 2008, Hedge fund Citadel shuttering Bermuda reinsurer, en, Thomson Reuters, Business News, New York, N.Y., United States,www.reuters.com/article/us-citadel-reinsurer/exclusive-hedge-fund-citadel-shuttering-bermuda-reinsurer-idUSTRE4A70G420081108, live, 14 December 2019,web.archive.org/web/20191214182404/https://www.reuters.com/article/us-citadel-reinsurer/exclusive-hedge-fund-citadel-shuttering-bermuda-reinsurer-idUSTRE4A70G420081108, December 14, 2019, To achieve this move, Citadel, through capitalization via their funds, entered the reinsurer industry, which provides insurance companies with their own policies to spread the risk of losses that they have given to their customers, in 2004 by founding CIG Reinsurance Ltd (CIG Re), a Bermuda-based catastrophe reinsurer providing $450 million in capital.NEWS, Anand, Shefali, 27 July 2005, Looking Afield, Hedge Funds Launch Reinsurance Firms, en, The Wall Street Journal. Eastern Edition, Markets, United States,www.wsj.com/articles/SB112242824590496964, subscription, 14 December 2019, 0099-9660, Citadel additionally founded $500 million reinsurer New Castle Re in 2005, seeking to capitalize on rising prices for reinsurance in the wake of Hurricane Katrina’s damage to property coverage costs.NEWS, Barr, Alistair, 4 November 2005, Citadel forms new reinsurer – New Castle Re targets catastrophe reinsurance, AM Best says, en, MarketWatch, San Francisco, United States,www.marketwatch.com/story/citadel-forms-new-reinsurer-new-castle-re-am-best-says, live, 14 December 2019,web.archive.org/web/20191214162613/https://www.marketwatch.com/story/citadel-forms-new-reinsurer-new-castle-re-am-best-says, December 14, 2019, NEWS, Andersonaug, Jenny, 18 August 2006, Hedge Funds Place Big Bets on Hurricane Season, en, C7, The New York Times, Business Day – Insider,www.nytimes.com/2006/08/18/business/18insider.html, live, limited, 14 December 2019,web.archive.org/web/20191214162424/https://www.nytimes.com/2006/08/18/business/18insider.html, December 14, 2019, 1553-8095, In 2006, Citadel’s two funds had approximately 10 percent of its assets invested in reinsurance.NEWS, Pittman, Mark, 8 December 2006, Citadel sells bonds, en, The Royal Gazette, Bloomberg, New York, N.Y., United States,www.royalgazette.com/article/20061208/BUSINESS/312089909, live, 15 December 2019,www.royalgazette.com/article/20061208/BUSINESS/312089909," title="web.archive.org/web/20191216034739www.royalgazette.com/article/20061208/BUSINESS/312089909,">web.archive.org/web/20191216034739www.royalgazette.com/article/20061208/BUSINESS/312089909, December 16, 2019, Citadel wound down CIG Re in November 2008 because the company could not achieve a financial strength rating, and as a result could not compete in comparison to other companies in the industry. Meanwhile, New Castle Re remained open and received an ‘A−’ rating from AM Best in November 2008. However, a month later on December 17, 2008, AM Best announced that New Castle Re’s rating was under review when Citadel’s funds experienced increased redemption requests as a result of the financial crisis.NEWS, Kent, Jonathan, 17 December 2008, Citadel’s hedge fund woes threaten New Castle Re’s rating, en, The Royal Gazette, Business, Bermuda,www.royalgazette.com/article/20081217/BUSINESS/312179954, live, 15 December 2019,www.royalgazette.com/article/20081217/BUSINESS/312179954," title="web.archive.org/web/20191216034728www.royalgazette.com/article/20081217/BUSINESS/312179954,">web.archive.org/web/20191216034728www.royalgazette.com/article/20081217/BUSINESS/312179954, December 16, 2019, Two days later on December 19, it was reported that Citadel would not be renewing the rights in New Castle Re contracts, but that Torus Insurance Holdings in Bermuda would do so.NEWS, 19 December 2008, Torus takes New Castle Re renewal rights, en, The Royal Gazette, Business, Bermuda,www.royalgazette.com/article/20081219/BUSINESS/312199894, live, 15 December 2019,www.royalgazette.com/article/20081219/BUSINESS/312199894," title="web.archive.org/web/20191216034735www.royalgazette.com/article/20081219/BUSINESS/312199894,">web.archive.org/web/20191216034735www.royalgazette.com/article/20081219/BUSINESS/312199894, December 16, 2019, In January 2009, Citadel placed New Castle Re into run-off.NEWS, 15 July 2009, Chris McKeown, the founder of Bermuda reinsurers CIG Reinsurance Ltd. and New Castle Reinsurance Co., has been named chief executive officer of global analytical and specialty practices., en, The Royal Gazette, Business, Bermuda,www.royalgazette.com/article/20090715/BUSINESS/307159960, live, 15 December 2019,www.royalgazette.com/article/20090715/BUSINESS/307159960," title="web.archive.org/web/20191216034722www.royalgazette.com/article/20090715/BUSINESS/307159960,">web.archive.org/web/20191216034722www.royalgazette.com/article/20090715/BUSINESS/307159960, December 16, 2019,

Risk management

The firm’s risk management philosophy is focused on three main areas: risk capital allocation, stress exposure and liquidity management.WEB, Amanda Cantrell, 10 December 2015, Are You Prepared for the Next Crash?,www.institutionalinvestorsalpha.com/Article/3513063/Are-Hedge-Funds-Prepared-for-the-Next-Crash.html, live,www.institutionalinvestorsalpha.com/Article/3513063/Are-Hedge-Funds-Prepared-for-the-Next-Crash.html," title="web.archive.org/web/20151214054116www.institutionalinvestorsalpha.com/Article/3513063/Are-Hedge-Funds-Prepared-for-the-Next-Crash.html,">web.archive.org/web/20151214054116www.institutionalinvestorsalpha.com/Article/3513063/Are-Hedge-Funds-Prepared-for-the-Next-Crash.html, December 14, 2015, January 15, 2016, Institutional Investor’s Alpha, Citadel’s risk management center has 36 monitors displaying more than 50,000 instruments being traded within the firm’s portfolios. The firm runs 500 stress tests each day to simulate the impact of potential economic and geopolitical crises or other market dislocation. Citadel aggregates investment positions on trading screens to calculate “more than 500 doomsday scenarios” to assess the potential of risk for the firm.In 2014, Citadel rated an A grade for risk management in the annual Institutional Investor Hedge Fund Report Card.NEWS, Hurst, Georgina, 27 June 2014, A Winning Night for Hedge Fund Managers and Investors, en, The Institutional Investor. Cfo Directory, Corner Office,www.institutionalinvestor.com/article/b14zbj8sby92mq/a-winning-night-for-hedge-fund-managers-and-investors, live, limited, 16 February 2015,web.archive.org/web/20200129034905/https://www.institutionalinvestor.com/article/b14zbj8sby92mq/a-winning-night-for-hedge-fund-managers-and-investors, January 29, 2020, 0020-3580, In April 2015, Ben S. Bernanke, who was the United States Federal Reserve chairman for eight years, joined Citadel as a senior adviser on global economic and financial issues.NEWS, Sorkin, AndrewRoss, Stevenson, Alexandra, 16 April 2015, Ben Bernanke Will Work With Citadel, a Hedge Fund, as an Adviser, en, B1, The New York Times, DealBook,www.nytimes.com/2015/04/16/business/ben-bernanke-will-work-with-citadel-a-hedge-fund-as-an-adviser.html, live, limited, 16 April 2015,web.archive.org/web/20170817075550/https://www.nytimes.com/2015/04/16/business/ben-bernanke-will-work-with-citadel-a-hedge-fund-as-an-adviser.html, August 17, 2017, 1553-8095, In January 2017, Joanna Welsh became the Chief Risk Officer.

Subsidiaries and funds

Funds

• Wellington Fund – Citadel’s flagship fund.NEWS, Picker, Leslie, Fitzgerald, Maggie, The main fund at Ken Griffin’s Citadel is up 10% so far this year,www.cnbc.com/2019/05/07/the-main-fund-at-ken-griffins-citadel-is-up-10percent-so-far-this-year.html, 7 May 2023, CNBC, May 7, 2019, en,
• Citadel Global Equities
• Tactical TradingNEWS, Herbst-Bayliss, Svea, Citadel portfolios gain in March despite banking crisis,www.reuters.com/business/finance/citadel-wellington-fund-gains-138-march-up-419-year-investor-2023-04-04/, 7 May 2023, Reuters, 4 April 2023, en,
• Fixed Income and MacroNEWS, Citadel Hires Several Traders in Paris, London and New York,www.bloomberg.com/news/articles/2024-02-21/citadel-hires-several-traders-across-paris-london-and-new-york?embedded-checkout=true, 18 May 2024, Bloomberg, 21 Feb 2024, en,

Former companies

Citadel Solutions – Citadel’s fund-administration arm.NEWS, Strasburg, Jenny, 6 March 2009, Lower Fees on Citadel’s New Fund, en, The Wall Street Journal. Eastern Edition, United States,www.wsj.com/articles/SB123630573986048063, live, subscription, 17 December 2019,web.archive.org/web/20191218014806/https://www.wsj.com/articles/SB123630573986048063, December 18, 2019, 0099-9660, Citadel Technology, established in 2009, was a wholly owned and independently operated affiliate of Citadel.MAGAZINE, Schmerken, Ivy, 25 September 2013, REDI and Citadel Technology Tackle the “Holy Grail”,www.wallstreetandtech.com/asset-management/redi-and-citadel-technology-tackle-the--holy-grail-/d/d-id/1268435?, live, InformationWeek,www.wallstreetandtech.com/asset-management/redi-and-citadel-technology-tackle-the--holy-grail-/d/d-id/1268435," title="web.archive.org/web/20150226154918www.wallstreetandtech.com/asset-management/redi-and-citadel-technology-tackle-the--holy-grail-/d/d-id/1268435,">web.archive.org/web/20150226154918www.wallstreetandtech.com/asset-management/redi-and-citadel-technology-tackle-the--holy-grail-/d/d-id/1268435, February 26, 2015, 26 February 2015, WEB, 20 April 2013, Citadel Carves Out Technology Niche,marketsmedia.com/citadel-carves-out-technology-niche/, live,marketsmedia.com/citadel-carves-out-technology-niche/," title="web.archive.org/web/20150226155355marketsmedia.com/citadel-carves-out-technology-niche/,">web.archive.org/web/20150226155355marketsmedia.com/citadel-carves-out-technology-niche/, February 26, 2015, 26 February 2015, Markets Media, It offered investment management technology, developed internally at Citadel, to a wide range of firms and funds.WEB, Citadel technology preps end to end solutions suite, March 19, 2013,www.waterstechnology.com/buy-side-technology/analysis/2255916/citadel-technology-preps-endtoend-solutions-suite, live,www.waterstechnology.com/buy-side-technology/analysis/2255916/citadel-technology-preps-endtoend-solutions-suite," title="web.archive.org/web/20150226154601www.waterstechnology.com/buy-side-technology/analysis/2255916/citadel-technology-preps-endtoend-solutions-suite,">web.archive.org/web/20150226154601www.waterstechnology.com/buy-side-technology/analysis/2255916/citadel-technology-preps-endtoend-solutions-suite, February 26, 2015, 26 February 2015, Waters Technology, In 2013, Citadel Technology announced a partnership with REDI. The partnership combines Citadel’s order management system (OMS) with REDI’s execution management capabilities (EMS).Aptigon Capital was formed in 2016 after Citadel LLC hired 17 portfolio managers from its rival Visium Asset Management which was in the process of closing down.NEWS, Copeland, Rob, Citadel Hiring About 17 Portfolio Managers From Shuttered Hedge Fund Visium,www.wsj.com/articles/citadel-hiring-about-17-portfolio-managers-from-shuttered-hedge-fund-visium-1469042756, 7 May 2023, Wall Street Journal, July 20, 2016, en, NEWS, Herbst-Bayliss, Svea, Citadel to close Aptigon stock unit, Felder leaves: sources,www.reuters.com/article/us-hedgefunds-citadel/citadel-to-close-aptigon-stock-unit-felder-leaves-sources-idUSKCN1QO224, 7 May 2023, Reuters, 7 March 2019, en, It was originally led by Richard Schimel until he left Citadel in 2018; being replaced by Eric Felder.NEWS, Picker, Leslie, Citadel let go of one of its star investors because of performance,www.cnbc.com/2018/02/22/citadel-let-go-of-one-of-its-star-traders-because-of-performance.html, 7 May 2023, CNBC, February 22, 2018, en, Felder led the unit until its closure in 2019 after Felder’s departure from the company.

Corporate affairs

Citadel ownership

In November 2006, Citadel became the second hedge fund to publicly issue bonds to investors in the form of senior unsecured debt totaling $2 billion, in an arrangement managed by Lehman Brothers and Goldman Sachs.NEWS, 26 November 2006, Citadel Planning $2 Billion Debt Offering, en, The New York Times, DealBook, United States,dealbook.nytimes.com/2006/11/28/citadel-to-plan-2-billion-debt-offering/, live, limited, 14 December 2019,web.archive.org/web/20191214054649/https://dealbook.nytimes.com/2006/11/28/citadel-to-plan-2-billion-debt-offering/, December 14, 2019, 1553-8095,

Employees

In 2007, the fund was known for having one of the largest turnover rates in Chicago, gaining the nickname “Chicago’s revolving door.” The New York Times reported in 2010 that “the firm is unique in its reputation for being a revolving door”, meaning that it had a high turnover rate.NEWS, Ahmed, Azam, 27 December 2010, Citadel Founder Offers Thanks and Apologies on Anniversary, en, The New York Times, DealBook, United States,dealbook.nytimes.com/2010/12/27/citadel-founder-offers-thanks-apology-on-anniversary, live, limited, 14 December 2019,web.archive.org/web/20191007051554/https://dealbook.nytimes.com/2010/12/27/citadel-founder-offers-thanks-apology-on-anniversary/, October 7, 2019, 1553-8095, It is also reported that turnover is aligned with the hedge fund industry.NEWS, Vickers, Marcia, 3 April 2007, A hedge fund superstar – Citadel founder Ken Griffin is already one of the world’s most powerful investors.,archive.fortune.com/magazines/fortune/fortune_archive/2007/04/16/8404298/index.htm, live,web.archive.org/web/20191214065056/https://archive.fortune.com/magazines/fortune/fortune_archive/2007/04/16/8404298/index.htm, December 14, 2019, 26 April 2008, Fortune, United States, en, In March 2015, Citadel received a Top 10 Great Workplaces in Financial Services ranking by the Great Places to Work Institute, based on a survey by Citadel employees.NEWS, Kapos, Shia, 6 March 2015, Why Ken Griffin hated one of his first jobs, en, Crains Chicago Business,www.chicagobusiness.com/article/20150306/ISSUE09/150309873/ceo-ken-griffin-discusses-citadel-being-honored-as-a-great-place-to-work, live, limited, 29 April 2015,web.archive.org/web/20191220183948/https://www.chicagobusiness.com/article/20150306/ISSUE09/150309873/ceo-ken-griffin-discusses-citadel-being-honored-as-a-great-place-to-work, December 20, 2019, 1557-7902,

Market advocacy

Citadel has played an active role in regulatory affairs and has advocated for financial legislation on market structure. In 1999, Congress repealed a provision in the Glass-Steagall Act of 1933 that strictly separated banking and trading activities by financial firms. Griffin called dismantling that law “one of the biggest fiascos of all time”.NEWS, 1 August 2012, Risk 25 firms of the future: Citadel, en, Risk.net, Infopro Digital Risk (IP) Limited, United States,www.citadel.com/_files/uploads/2013/08/risk25citadel.pdf, live, 13 July 2015,www.citadel.com/_files/uploads/2013/08/risk25citadel.pdf," title="web.archive.org/web/20140712102729www.citadel.com/_files/uploads/2013/08/risk25citadel.pdf,">web.archive.org/web/20140712102729www.citadel.com/_files/uploads/2013/08/risk25citadel.pdf, July 12, 2014, In the aftermath of the 2008 financial crisis, Griffin and Citadel called for greater transparency in derivatives trading, a stance at odds with many other hedge funds and major financial firms. The company spoke out against Wall Street for lobbying to delay the implementation of the Dodd–Frank Act.NEWS, Michael Mackenzie, Tom Braithwaite, September 10, 2013, Derivatives trading safer and more efficient, says Citadel, Financial Times,www.ft.com/cms/s/0/f3e4b150-1a26-11e3-b3da-00144feab7de.html, live, July 13, 2015,www.ft.com/cms/s/0/f3e4b150-1a26-11e3-b3da-00144feab7de.html," title="web.archive.org/web/20150705154918www.ft.com/cms/s/0/f3e4b150-1a26-11e3-b3da-00144feab7de.html,">web.archive.org/web/20150705154918www.ft.com/cms/s/0/f3e4b150-1a26-11e3-b3da-00144feab7de.html, July 5, 2015, Griffin has also called for breaking up “too big to fail” banks and separating their banking and trading activities.Following the 2014 publication of Flash Boys by Michael Lewis, who claimed financial markets are “rigged by large, high-speed traders” (also known as “high-frequency traders“) Griffin, who was not interviewed by Lewis, shared his views on the book and its allegations during his second congressional hearing.NEWS, Merrion, Paul, 8 July 2014, Ban high-speed trading? ‘Absolutely not,’ says Citadel’s Griffin, en, Crains Chicago Business,www.chicagobusiness.com/article/20140708/NEWS02/140709854/citadel-ceo-griffin-testifies-on-capitol-hill-on-high-frequency-trading, Government, live, limited, 7 July 2015,web.archive.org/web/20191213230302/https://www.chicagobusiness.com/article/20140708/NEWS02/140709854/citadel-ceo-griffin-testifies-on-capitol-hill-on-high-frequency-trading, December 13, 2019, 1557-7902, Griffin said in front of the Senate Banking Committee that from his perspective “the U.S. equity markets are the fairest, most transparent, resilient and competitive markets in the world.” Griffin expanded by saying that high-frequency trading functions to reconcile discrepancies between options tied to groups of stocks and the stocks themselves, saying, “Somebody has to keep the New York markets in line with the markets in Chicago. It all happens at an extremely low cost in the context of our capital markets”. During an event at Georgetown University Griffin called the book “fiction”.WEB, September 12, 2017, Leaders of Global Finance Speakers Series presents Kenneth Griffin,www.youtube.com/watch?v=yP79mQSlGbg, live,web.archive.org/web/20191112223133/https://www.youtube.com/watch?v=yP79mQSlGbg, November 12, 2019, YouTube,

Speaking fees paid

In 2014, former president Bill Clinton was paid $250,000 by Citadel to speak at New York restaurant Daniel to investors and employees in celebration of the Citadel founder’s 46th birthday.In 2015, Citadel paid pop-star Katy Perry $500,000 to perform at an event celebrating the 25th anniversary of the firm.WEB, 2015-11-16, Citadel party features Katy Perry, ‘Left Shark’,www.pionline.com/article/20151116/PRINT/311169988/citadel-party-features-katy-perry-left-shark, live,www.pionline.com/article/20151116/PRINT/311169988/citadel-party-features-katy-perry-left-shark," title="web.archive.org/web/20151117154152www.pionline.com/article/20151116/PRINT/311169988/citadel-party-features-katy-perry-left-shark,">web.archive.org/web/20151117154152www.pionline.com/article/20151116/PRINT/311169988/citadel-party-features-katy-perry-left-shark, November 17, 2015, 2020-09-09, Pensions & Investments, en, WEB, Byrne, Brendan, 2015-11-10, Ken Griffin Has Katy Perry At Citadel Birthday Party,www.valuewalk.com/2015/11/citadel-katy-perry/, live,web.archive.org/web/20201027143337/https://mv.outbrain.com/Multivac/api/get?url=https%3A%2F%2Fwww.cnn.com%2F2020%2F10%2F26%2Fus%2Fpew-colleges-in-person-instruction-trnd%2Findex.html&settings=true&recs=true&widgetJSId=AR_36&key=NANOWDGT01&version=2000113&apv=true&sig=%E4%B8%AD%E6%96%87(%E7%AE%80%E4%BD%93)&format=html&rand=19394&lsd=ab4db357-08ea-4fe9-ba96-522fce0f5a74&lsdt=1603808642752&pdobuid=0&osLang=en-US&va=true&et=true&cmpStat=0&ccpa=1YNN&ccpaStat=1&scrW=1600&scrH=1000&t=Nzk1ZjEwOGEyZThhZDg0NWVkNTY2YjVjYzdlNmEwYzQ=&winW=1100&winH=784&adblck=false&abwl=false&secured=true&feedIdx=1&lastIdx=16&lastCardIdx=10&fAB=10874-62881&pcer=p%3DF-JfgNxyyKvk0YqNQhlgL5syIl2HxvkNXpWPsUKfPNo%26c%3D366f68ce%26v%3D3&dpr=1&ro=8&wdr-natlaz=true, October 27, 2020, 2020-09-09, ValueWalk, en-US, WEB, 2015-12-17, Katy Perry and Andrea Bocelli; Hedge funds party despite losses,www.cnbc.com/2015/12/17/katy-perry-and-andrea-bocelli-hedge-funds-party-despite-losses.html, live,web.archive.org/web/20170822105855/https://www.cnbc.com/2015/12/17/katy-perry-and-andrea-bocelli-hedge-funds-party-despite-losses.html, August 22, 2017, 2020-09-09, CNBC, en, Citadel paid over $800,000 in speaking fees to current secretary of the treasury Janet Yellen during 2018–2020 while she was not in office.WEB, 2021-01-01, Janet Yellen made millions in Wall Street, corporate speeches,www.politico.com/news/2021/01/01/yellen-made-millions-in-wall-street-speeches-453223, live,web.archive.org/web/20210101060234/https://www.politico.com/news/2021/01/01/yellen-made-millions-in-wall-street-speeches-453223, January 1, 2021, 2021-01-28, POLITICO, en,

See also

• The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
• Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, a 2016 Supreme Court case involving naked short selling claims against Citadel Derivative Group and Merrill Lynch, and others.

References

{{reflist}}

External links

• {{Official website|www.citadel.com/}}
• Pictures of Citadel Center in Chicago {{Webarchive|url=https://web.archive.org/web/20201125164021www.chicagoarchitecture.info/Building/1098/Citadel_Center.php |date=November 25, 2020 }}
• accenture.tekgroup.com/article_display.cfm?article_id=4253" title="web.archive.org/web/20070317174334accenture.tekgroup.com/article_display.cfm?article_id=4253">Data management agreement between Citadel and Accenture

{{Hedge funds}}{{Authority control}}