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.
“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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