Ken Griffin's Citadel posts best month in years after scooping up Situational Awareness stocks
The July gains came after Citadel acquired the bulk of the public-stock portfolio formerly held by Situational Awareness late last month.
Ken Griffin's Citadel witnessed remarkable monthly performance in July, driven by a surge in risk assets and the acquisition of assets from the collapsed Situational Awareness hedge fund. The firm's flagship multistrategy Wellington fund delivered an impressive 5.9% return, marking its strongest performance since 2022 and contributing to a 12% gain for the year.
The tactical trading fund, which blends discretionary equity investing with quantitative strategies, surged 11.1% in July and has climbed 27% year-to-date. Citadel's equities fund also excelled, advancing 14.2% in July and bringing the fund's 2026 return to 27%, both of its best monthly performances ever. The July gains followed Citadel's acquisition of the bulk of Situational Awareness's public-stock portfolio at substantial discounts following the hedge fund's rapid downfall after substantial losses triggered margin calls and forced asset sales.
Situational Awareness, established by former OpenAI researcher Leopold Aschenbrenner, was compelled to unwind many of its positions after a sudden reversal in AI trades left it on both sides bleeding. The firm had amassed significant stakes in AI infrastructure companies while betting against software stocks, a strategy that proved disastrous as software shares rallied and AI hardware names plummeted.
Several of the fund's prime brokers assisted in reducing positions in a systematic manner as Situational Awareness attempted to meet margin requirements. Citadel emerged as the largest buyer of the portfolio, capitalizing on one of the year's most significant forced liquidations. Stocks such as Nebius and Micron, which Aschenbrenner's fund owned, rebounded in July's final days following a tumultuous month, with traders noting that the fund's near collapse and rescue by Citadel served as a clearing event that prompted short sellers to take profits.
As of July 1, Citadel managed approximately $71 billion in assets and has frequently utilized market disruptions to deploy capital into distressed or forcibly-sold situations.
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