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A hedge fund story of fall and recovery- Ken Griffin of Citadel hedge fund in 2008 and in 2015
10/25/2008
Citadel had leverage of $3 in borrowed funds for $1 of client money in 2008 to make investments. It nearly collapsed in the 2008 financial crisis with losses ranging from 35-60%, losses of $8 billion. In 2015 it has $7 of borrowed funds for $1 of client money for investments, according to the WSJ. It now makes investment bets equally in up and down markets to offset the higher risk, so that only 52% of the bets need to work. It recovered during the last crisis by barring investors from withdrawing money for 8 months. By taking aggressive positions early in the recovery of the market Citadel made $3 billion in 2013-2015. Many of the hedge funds are now less aggressive than Citadel following the 2008 financial crisis, preferring to target smaller returns and improve the image with clients such as college endowments and pension funds.
Grouped Articles
Citadel’s Ken Griffin Leaves 2008 Tumble Far Behind
Wall Street Journal 08.04.2015
Citadel Chief Denies Rumors of Trouble
New York Times 10.25.2008
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