Earnings

Citadel turns 2020 profit after spotting virus risk early

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Citadel, the Chicago-based hedge fund giant led by billionaire Ken Griffin, has so far weathered the coronavirus market storm well, turning a slight profit in its flagship Wellington hedge fund for the year through Monday, according to a person familiar with the situation.

The fund, which practices a so-called multi-strategy array of bets on stocks, bonds, commodities and other securities using teams of traders, was as of Friday down 5.25% for March, the person said, who requested anonymity because the information is private. The exact year-to-date gain, which is net of fees, was not finalized.

By comparison, Goldman Sachs’ prime services division estimated that the average equity-focused hedge fund is down 15.5% for the month through Thursday, with average year-to-date losses at nearly 16%.

Ken Griffin

Lucy Nicholson | Reuters

Citadel’s multi-strategy competitors are still down for the year amid the coronavirus-led market rout. Millennium Management’s main hedge fund is down about 4.3% for 2020 through March 20, while Schonfeld Strategic Advisors is down about 15% through March 16, according to people briefed on the returns.

The exact drivers of Citadel’s relative outperformance were unclear. The Wall Street Journal previously reported that Citadel’s fixed-income portfolio recently lost hundreds of millions of dollars, in part from so-called basis trades on pricing gaps between U.S. Treasuries and futures, although those unrealized losses were recovered within days. The…



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