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Superfund Investment Group

Citadel Investment Group

Citadel Investment Group is a hedge fund management firm based in Chicago, Illinois, founded by billionaire trader Kenneth C. Griffin. With over $20 billion in assets under management (AUM), the firm is one of the world's largest hedge fund managers and its daily trading volume amounts to approximately 3% of average daily trading activity in London, New York, and Tokyo. Funds sponsored by the firm require longer "lock-up" periods from investors than many other hedge funds. Although Citadel employs over 1,400 individuals globally, its flagship operation is located in the Citadel Center a $355 million office tower in the heart of downtown Chicago (in 2006 the tower was purchased for $560 million by Robert Gans) . Citadel also has offices in New York, Tokyo, Hong Kong, San Francisco, and London . Of the 100 largest hedge funds, Citadel's is the only based in Chicago . Citadel is the eleventh largest hedge fund manager in the world ; it is also the second largest multi-strategy hedge fund manager in the world .

This type of bandwidth allows Citadel to staff a technology department of about 500 support professionals. Griffin believes that Citadel’s technology capabilities “gives us a substantial competitive advantage in the market place …and that’s why, when Amaranth needs a partner or Sowood needs a solution or E*TRADE needs capital infusion or the investment banks have a large risk transference trade to do, they come to Citadel.” .

The local press has lampooned Citadel as "Chicago's revolving door." ]. (People close to the firm say turnover is on a par with a typical investment bank's.) . ] Commenting on this reputation, Griffin has said, “People say…’It’s a tough place to work. It’s demanding. It’s unrelenting.’ I look at these as strengths inherent in strong companies…I’m very proud that we have a sterling reputation when it comes to doing what we say we’re going to do.” .

Despite prior talk in Wall Street that Citadel was considering an IPO and that Kenneth C. Griffin mentioned the possibility in an interview, in April 2006, a spokesperson for Citadel said the firm currently has no such plans . However, in November 2006 Citadel became the first hedge fund to issue bonds. In a bond offering led by Lehman Brothers and Goldman Sachs, Citadel announced it would sell $2 billion worth of notes. The bonds have been given an investment-grade rating by Standard & Poor's. .

Currently, “Citadel’s clients include high-profile sovereign wealth funds, charity foundations, wealthy families and various financial institutions.” Since Griffin founded the firm 20 years ago, it “has diversified its business from a hedge fund to a financial institution focused on alternative investment management.” Proud of Citadel’s growth, Griffin recently said, “The name Citadel means strength and it speaks to our culture of performance, risk management and our ability to succeed in volatility" .

Investments

In 2004, Citadel founded CIG Re, a Bermuda-based catastrophe reinsurer . In 2005, the hedge fund founded a $500 million catastrophe reinsurer in Bermuda called New Castle Re .

Citadel also has multiple subsidiaries such as Kensington Global Strategies (Citadel's largest fund ), Wellington Partners (Citadel's oldest fund and its flagship fund ), Citadel Equity Fund , Citadel Finance , and Citadel Derivatives Group, which controls 10% of the Philadelphia Stock Exchange In 2000, Citadel's Wellington affiliate achieved a 52.6% return Since January 2005, Citadel Derivatives Group has been a Lead Market Maker on the trading floor of the Pacific Coast Exchange In a strategic partnership with about ten other financial institutions, Citadel Derivatives Group is also a joint owner of the International Securities Exchange

In 2006, Citadel and JPMorgan Chase acquired the energy portfolio of the failed hedge fund Amaranth Advisors, which had suffered a 65% ($6 billion) loss in assets

In 2007, Citadel acquired a sizable stake in online brokerage E*TRADE

Citadel's daily trading activity reportedly accounts for "some 20 to 25% of all the options contracts in America" .

Other information

Citadel Investment Group is not related to any of the following organizations:

Notes

External links

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