Ken Griffin's Citadel has offloaded more than 80% of the aggregate risk associated with the Situational Awareness stock portfolio it snagged from the embattled AI hedge fund.
“In this effort, we have completed nearly 100 block trades totaling over $4 billion in market value,” Griffin said in an investor note Friday. “These included the largest intraday block trades of the year in 10 different names.”
Citadel struck a deal late last month to buy stocks from Situational Awareness, a hedge fund led by Leopold Aschenbrenner that was facing margin calls. Aschenbrenner's firm was able to stabilize after reaching the deal with Griffin's company.
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“On July 29, we entered discussions with Situational Awareness to acquire a material portion of their holdings, a transaction that would strengthen their balance sheet and mitigate the risk of a tail event,” Griffin said in the letter seen by Bloomberg. “In a matter of hours, our team analyzed and priced their global portfolio.”
Citadel's flagship hedge fund, Citadel Wellington, rose 5.94% in July, bringing its year-to-date gains to 12.02%. A Citadel spokesperson declined to comment on the investor letter.
As Situational Awareness was grappling with a sinking stock book and troubling shorts, firms including Millennium Management, Jane Street and Citadel weighed buying the stocks to help Aschenbrenner's firm meet margin calls. Ultimately, Situational Awareness opted for a deal with Citadel, which snapped up most of the AI hedge fund's public stock book at a more than 10% discount.
The moved helped trigger a relief rally in tech stocks after the market was thrown into turmoil at the prospect of the unraveling of a $45 billion hedge fund. CNBC reported the investor letter earlier.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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