Citadel Is Handing Back About $7 Billion in Profits to Clients Ken Griffin’s hedge-fund firm performed better than peers in 2023 with a nearly 15% return for its flagship fund By Peter Rudegeair Dec. 12, 2023 9:00 am ET Since 2018, Ken Griffin’s Citadel has returned about $25 billion in profits to investors, people familiar with the firm said. PHOTO: LIONEL NG/BLOOMBERG NEWS Citadel is planning to give its investors about $7 billion in profits it earned in a year when choppy stock markets and interest rates challenged most hedge-fund managers, people familiar with the firm said. The flagship multistrategy fund at Ken Griffin’s Miami-based firm returned nearly 15% in the first 11 months of 2023, the people said. The fund, Wellington, gives investors exposure to stocks, bonds, commodities and other asset classes and returned 38% in 2022. After handing back capital in the coming weeks, Citadel expects to start 2024 with about $58 billion in assets under management, the people said. Many other hedge funds, including ones run by high-profile managers such as Dan Loeb and Jim Chanos, have struggled in a year that included a shifting outlook for inflation and job growth, a regional banking crisis and a run-up in the shares of big tech companies. The average gain for hedge funds in the year through November was 4.35%, according to a fund-weighted index compiled by research firm HFR. The S&P 500 rose 20.8% including dividends in the year through November. Citadel has long been one of the industry’s top performers, delivering more gains, net of fees, to clients since inception than any other hedge-fund firm, according to LCH Investments. Unlike a classic hedge fund where analysts funnel investment ideas to a single decision maker, Citadel employs dozens of teams to trade independently in markets around the world within a set of risk parameters. So-called multimanager platforms such as Citadel have emerged in recent years as the new center of gravity in the hedge-fund industry. The platforms have hired aggressively and bid up the price of investment professionals. Many portfolio managers who would have struck out on their own in an earlier era are now opting to accept lucrative offers to join a platform. Investors in hedge funds like the model because it is centered on steady production—not on swinging for the fences. The funds typically balance bets that some stocks will rise with bets that others will fall. That model can also reduce overall exposure to rising stocks, weighing on performance when markets are rallying, like this year. A Barclays index of 42 multimanager platforms posted annualized returns of 8.1% over the last five years, 2 percentage points better than the rest of the industry. Citadel and other large hedge-fund firms regularly hand back profits to clients to prevent their funds from growing larger than managers feel they can invest. Since 2018, Citadel has returned about $25 billion in profits to investors, the people said.
My new goal is to make at least 10% per month. This translates to 200+% p.a., but IMO is realistic for a small account.
%% Good + good year. I sold a used car one time + told the recycle dealer 'I want a good used tire , dont want a new tire on that model.' He sold me a Goodyear or Goodrich tire + wrote ''good ''+ said ''good'' on that tire LOL
It's not even a first world problem that your hedge fund investment earned so much money that they give you some of it back to invest somewhere else.