Citadel, the hedge fund run by billionaire Ken Griffin, reported a file $16 billion in revenue final 12 months—knocking off Ray Dalio’s Bridgewater as essentially the most profitable agency seven years working.
The Miami-based investing big, which manages $54 billion in belongings, reported a 38.1% return on its important hedge fund, in accordance with the Financial Times, which cited analysis by LCH Investments, a subsidiary of European-based funding home Edmond de Rothschild.
LCH Investments reported that Citadel’s complete gross buying and selling revenue final 12 months amounted to $28 billion. Investors have been charged round $12 billion in bills and efficiency charges, in accordance with FT.
Since its founding in 1990, Citadel has reported internet positive factors of $66 billion—besting Dalio’s Bridgewater, which generated internet positive factors of greater than $58 billion.
The $16 billion revenue that Citadel netted for its traders exceeds the $15.6 billion wager made by John Paulson towards subprime mortgages again in 2007.
Citadel has $54 billion value of belongings beneath its administration.Bloomberg through Getty Images
Citadel’s windfall wasn’t powered by any single outsized wager, however quite by profitable trades throughout the equities and stuck earnings markets, in accordance with Bloomberg. Citadel additionally generated income by transferring past choices buying and selling and increasing into equities, international exchanges, credit score indices, commodities, exchange-traded funds, and interest-rate swaps.
Citadel instructed traders its flagship Wellington fund returned roughly 32% via the top of November, a pointy distinction to a lot of Wall Street and the financial system at giant. By then, the common hedge fund misplaced 4% and the benchmark S&P 500 inventory index plunged 16% because the Federal Reserve wrestles with excessive inflation and a possible recession.
Citadel, which has been dubbed “the Amazon of financial markets,” is chargeable for one out of each 5 inventory trades made within the United States. It has turn into one in all Wall Street’s greatest “market makers” — or firms that quote the purchase and promote worth of securities after which revenue from the distinction within the bid-ask unfold.
Griffin’s internet value has been pegged at round $29 billion.REUTERS
Citadel Securities, the market-making arm of Griffin’s empire, reported a file $7.5 billion of revenue final 12 months, in accordance with Bloomberg News. The unit is partly credited for the rise of retail brokerages similar to Robinhood.
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Griffin, whose internet value has been valued by Bloomberg at $29.4 billion, constructed his fortune on quantitative evaluation, or quantum buying and selling, which depends on laptop algorithms and statistical evaluation to gauge the place the market goes.
Griffin generated headlines final 12 months when he introduced that the Citadel would relocate its headquarters from Chicago to his native South Florida. Griffin, an enthusiastic supporter of Florida Gov. Ron DeSantis, cited surging crime charges within the Windy City as one of many important driving forces for the transfer.
Griffin, who in 2019 bought the costliest residence within the US for $238 million — a penthouse within the high-rise at 220 Central Park South in Manhattan — warned final week that enterprise leaders would flee New York City if violent crime charges continued to climb .
Griffin’s warning got here weeks after his agency unveiled plans to develop a brand-new “1.7 million square foot trophy office tower” in Midtown that will turn into Citadel’s key hub within the metropolis.
Dalio’s hedge fund, Bridgewater, was the world’s largest hedge fund for seven straight years.Getty Images
Citadel’s deliberate skyscraper will change adjoining buildings at 350 Park Avenue, 40 East 52nd Street and 39 East 51st Street and ultimately home all of its New York City-based workers.
The firm has roughly 1,500 staff in New York and roughly 4,000 staff globally.
Additional Reporting by Thomas Barrabi