Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
TPMCafé – Last November, Ken Griffin told investors in his Citadel Hedge Funds that they couldn’t withdraw their money, but he was still going to charge a 2% management fee on their trapped funds. Oren Kramer a rival hedge fund manager said, "It’s like telling someone at a hotel that they can’t check out and then charging them for the privilege of staying."
Things were bad for Citadel, but this evening we learned that Ken Griffin isn’t really the hyper-capitalist he’s always portrayed as–he’s just another corporate socialist, passing his losses off on the public. It turns out that $200 million of taxpayer dollars have been turned over to Ken Griffin by AIG for his speculation in Credit Default Swaps. As I said last week, there is no good reason for this to happen.
Seeking Alpha – Ken Griffin’s Citadel has plans to roll out a few more funds, even after Citadel’s flagship funds had a rough year in 2008. One will focus on currencies and interest rates, one will focus on stocks, and another will focus on convertible bonds.
Citadel is trying to roll out lower fee funds in an effort to attract more investors. Additionally, it’s hoping to raise $2-5 billion for the Global Macro Fund.
CNN Money – Citadel Investment Group’s main hedge fund lost 53% for 2008, according to a person familiar with Citadel’s preliminary estimates.
The $10 billion Kensington and Wellington funds lost about 9% during the first 24 days of December, punctuating the toughest year yet for Citadel founder Ken Griffin. That came after a 13% loss in November. In 2007, the fund was up 30%.
A bright spot this year was Citadel’s $3 billion market-making family of funds, which ended 2008 up about 43%, according to preliminary estimates.
Citadel has weathered the downturn better than some fund managers thanks to its financial flexibility and its size, at a time when the industry is contracting and many smaller funds are forced to close down.
