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CNNMoney.com – When the headhunter first called Richard Baker in late 2007 and asked him if he was interested in becoming president and CEO of the Managed Funds Association – the hedge fund trade group – Baker thought it was a joke. "My reaction was, ‘You want me to do what?’"

An 11-term Republican Congressman from Louisiana, Baker was about as likely a candidate to run the MFA as Bill Gates is to run an Apple in his home office.

Over the years, Baker had emerged as a fierce and independent critic of the financial services industry – pushing for tougher regulation of hedge funds after the 1998 collapse of Long Term Capital Management.

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New York (HedgeCo.Net) – Chicago-based Citadel Investment Group has frozen redemptions from its two largest hedge funds after investors moved to withdraw $1.2 billion, according to a letter sent to clients on Friday.

The letter, signed by CEO Kenneth Griffin, informed investors that withdraws in the Kensington and Wellington Funds may resume as early as March 31^st.  The funds, which manage about $10 billion making them the firms largest, have lost 49.5 percent of their value this year through December 5^th.

“We have not made this decision lightly,” Griffin said.  “We recognize how a suspension impacts our investors, especially those with current financial obligations of their own to meet.”

The letter also stated that Citadel will absorb a large portion of the funds’ expenses, something that clients usually are responsible for, in the range of 3 to 4 percent of assets. 

While Citadel’s two largest funds may be struggling to get through the year, three other funds in the Citadel family which manage about $3 billion, have climbed 40 percent this year.

This marks only the second year since the firm’s launch in 1990 that Citadel will report a loss.  The only other loss was posted in 1994, at 4 percent.  Hedge funds as a whole have had posted one of the worst years to date, losing 18 percent on average, according to data compiled by Chicago-based Hedge Fund Research. 

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
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New York (HedgeCo.Net) – Chicago-based Citadel Investment Group lost 13 percent in November, according to a report published by the Wall Street Journal.  This brings the hedge fund firm’s total losses to 47 percent for the year.

The losses stem in part from the company’s two largest funds, the Kensington and Wellington, which together manage about $10 billion in assets.  Investor redemption requests totaling around $1 billion and plummeting values of bonds were the catalysts behind the losses. 

This is the first year since 1994 that Citadel will post a loss.  It is only their second loss since CEO Kenneth Griffin launched the firm in 1990.  All is not grim, however.  Bloomberg News reports that three other Citadel funds, who together manage about $3 billion, have climbed about 40 percent this year. 

Hedge funds as a whole have posted their worst record to date this year.  According to data by Chicago-based Hedge Fund Research, hedge funds have lost an average of 22 percent this year. 

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com

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