Published 26 Dec 2022 at 12:52 p.mUpdated 26 Dec. 2022 at 13:23
Once again, Citadel, Ken Griffin’s multi-strategy diversified hedge fund, is on top of the world. After an already very favorable year in 2021 (+26%), it rose 32% during the first 11 months of the year – well above its competitors. Its trading firm, Citadel Securities – independent of its fund – is also on track to end a historic year. As a result, this year Ken Griffin has become the richest hedge fund manager on the planet with a fortune estimated at $31.3 billion by Forbes, ahead of Jim Simons of Renaissance Technologies ($28.1 billion). Most of the former convertible bond trader’s fortune is invested in his fund and grows with his performance.
Citadel’s profits are so high that it will have to reduce the size of its capital by returning part of its profits ($7 billion) to investors at the beginning of the year. It starts in 2023 with assets under management of $50 billion, which is 4th in the world behind Bridgewater, Renaissance and Elliott. When a fund’s capital becomes too large, it loses flexibility and its performance suffers. Most hedge funds have therefore implemented mechanisms to limit and then reduce the size of their capital (fund closure, etc.).