Citadel’s crisis investing playbook back in focus after AI hedge fund rescue
Citadel's acquisition of a discounted equity portfolio from embattled AI-focused hedge fund Situational Awareness is the latest example of founder Ken Griffin capitalising on periods of market stress, reinforcing a strategy that has repeatedly generated returns during hedge fund dislocations, according to a report by Reuters.
Ken Griffin, billionaire investor and founder of Citadel, has stepped in to rescue California hedge fund Situational Awareness amid its losses in AI stocks. Citadel's founder and CEO assembled his top executives to investigate the fund's situation, which lost 67% of its value in July after a selloff in AI stocks. The fund's portfolio had to be unwound, with most of its $16 billion public equities book liquidated.
Griffin, 57, reached out to Situational Awareness and spoke directly with the young founder, Leopold Aschenbrenner. They conducted an all-night analysis of the fund's trading book positions and liquid bets. After the investigation, Citadel bought a chunk of Situational Awareness' book, with Aschenbrenner writing to his investors, "We let you down."
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- Situational Awareness losses driven by crowded AI trades, not short-seller attack, says S3 hedgeweek.com
- With Situational Awareness AI deal, Citadel's Griffin rides to the rescue again economictimes.indiatimes.com
