Citadel Investment Group

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Citadel Investment Group
Founded	1990
Headquarters	Chicago, IL
Key People	Founder and Chief Executive Officer Kenneth C. Griffin
Employees	1,200
Products	Hedge fund management, administration
Web site	http://www.citadelgroup.com/

Chicago-based hedge fund Citadel Investment Group (Citadel) manages over $20 billion in alternative investments covering all asset classes, investment strategies and global regions. Citadel recently expanded from its usual trading and shorting to nabbing fire-sale corporate assets and lending to companies in growth markets like China.

Contents 1 History 2 Key People 3 Latest News 4 References

History

Citadel launched as a hedge fund manager in 1990 and now manages more than $20 billion in assets as a global alternative-investment manager with offices in three U.S. locations plus Bermuda, London, Hong Kong and Tokyo.^[1] In addition to investing, Citadel also runs market-making and hedge fund administration businesses and also farms out some capital to independent managers. In recent months, Citadel has expanded its international reach and depth of investments with a spate of new hires.

In October of 2008, Citadal took the unusual step of issuing a statement to deflect rumors that it might be in trouble. Citadel said the talk was "categorically false. Hours later, Griffin held an emergency conference call and said Citadel was sound. The firm had ample cash and financing facilities on hand, and its investors had withdrawn only a small amount of their money, he said.^[2]

On Oct. 31, 2008, Reuters reported that Citadel was shutting down its fund of funds portfolio called Fusion, a fund it has started 18 months previously with mostly its own capital.^[3]

Key People

Citadel founder and CEO Ken Griffin is considered a legend amongst investors. Until recently, he guarded his privacy carefully and avoided media contact. A profile of him appeared in the May 2007 issue of Conde' Nast's Portfolio Magazine.^[4] and he recently lambasted bankers for their inexperience and poor judgement over the recent credit crisis in a prominent May, 2008 media article.^[5]

Latest News

• On Nov. 3, 2008, Neil Fitzpatrick, chief operating officer of Citadel Execution Services was named in Crain's Chicago Business' "40 under 40."^[6] At Citadel, he runs a team of 30 employees.

• On Oct. 29, 2008, Citadel said it would pull its board member from the bank - backed ELX Electronic Liquidity Exchange, according to a source close to the matter. Citadel said it would retain an equity stake and would use the still-to-be launched ELX platform, which aimed to challenge the CME's dominance in Treasury futures. However, the firm planned to focus on the credit-default swap trading and clearing platform being developed with CME.^[7]

• On Oct. 7, 2008, CME Group and Citadel, an alternative investment and technology firm, announced they had executed a non-binding term sheet to launch a joint venture company within 30 days that would be the first electronic trading platform fully integrated with a central counterparty clearing facility for Credit Default Swaps (CDS). CME Clearing would be the central counterparty for this solution.^[8]

• In April of 2008 Citadel hired former JPMorgan Chase & Co. investment banker Derek Kaufman to run its U.S. fixed-income business, the second month in a row the hedge fund had raided the bulge-bracket bank.^[9] Citadel also nabbed Patrick Edsparr in March from JPMorgan Chase to run the hedge fund's European division.

• On May 28, 2008, Citadel announced that Bill King would join the firm as a senior managing director and a head of securitized products. King previously served as global co-head of securitized products at JPMorgan.^[10]

• On July 15, 2008, it was revealed that the U.S. Securities and Exchange Commission (SEC) sent subpoenas to more than 50 hedge-fund advisers as it investigated whether individuals spread false rumors to manipulate shares in two Wall Street firms, the Wall Street Journal said, citing a person familiar with the matter. The subpoenas, sent as recently as Monday, were seeking trading and communications data related to short selling and options trading in Bear Stearns Cos. or Lehman Brothers Holdings Inc., the person told the paper. Rumors have been blamed for the collapse of investment bank Bear Stearns and for a slide in Lehman shares in July. Some of the hedge-fund advisers received subpoenas related to both probes, while others were contacted with respect to only one.^[11]

References

1. ↑ About Citadel. CitadelGroup.com. Retrieved on May 21, 2008.
2. ↑ Citadel Chief Denies Rumors of Trouble. NYTimes.com. Retrieved on October 27, 2008.
3. ↑ Citadel shutting down its fund of funds portfolio. Reuters. Retrieved on October 31, 2008.
4. ↑ Opening Up the Citadel. Portfolio. Retrieved on May 21, 2008.
5. ↑ Kenneth Griffin, Founder of Citadel Investment, Bashes His Peers. International Herald Tribune. Retrieved on May 21, 2008.
6. ↑ Neil Fitzpatrick. Crain's Chicago Business. Retrieved on November 3, 2008.
7. ↑ [http:://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/200810291212DOWJONESDJONLINE000770_univ.xml Citadel Drops ELX Board Seat; Will Remain User - Source]. Morningstar. Retrieved on October 29, 2008.
8. ↑ Press Release. CME Group. Retrieved on October 7, 2008.
9. ↑ Hedge Fund Citadel Hires Another JPMorgan Banker. Reuters. Retrieved on May 21, 2008.
10. ↑ Press Release. PR-Inside. Retrieved on May 28, 2008.
11. ↑ Citadel Among Hedge Fund Advisers That Got Subpoenas: Report. Crain's Chicago Business. Retrieved on July 16, 2008.