Citadel unloads over 80% of bets bought from Leopold Aschenbrenner’s Situational Awareness

Billionaire investor Ken Griffin’s Citadel has disposed of more than 80% of the positions in the original portfolio it recently acquired from Leopold Aschenbrenner’s Situational Awareness, according to an investor letter seen by Reuters on Friday.

Situational Awareness, an AI-focused hedge fund led by former OpenAI researcher Aschenbrenner, transferred most of its stock positions to Citadel last month after steep losses in technology holdings forced the fund to dismantle much of its public equities portfolio.

Citadel subsequently carried out nearly 100 block trades worth over $4 billion as it reduced the acquired positions. Griffin said the transactions included the year’s largest intraday block trades in 10 different stocks.


The firm, which manages about $77 billion in assets, declined to comment.

"Our ability to distribute this risk was central to our investment thesis. These moments highlight our ability to quickly evaluate complex risks, deploy capital with speed and conviction, and execute with precision," Griffin said in the letter.

Citadel ranks among the world’s largest and most profitable hedge funds and has developed a reputation for capitalizing on opportunities created by market turmoil.

Situational Awareness’s portfolio lost 67% of its value in July following a selloff in AI stocks, forcing the fund to unwind most of its $16 billion public equities book.

Reuters reported last month that Griffin and his senior lieutenants worked through the night to assess Situational Awareness’s trading positions and determine how easily the bets could be sold.

Citadel purchased some of the fund’s positions at a discount of more than 10%, helping to stabilise the market during the last two trading days of July, investors had said.

"A transaction of this magnitude could not have been completed without the extraordinary cooperation of the trading and prime brokerage teams at the banks serving both firms," Griffin said.

Citadel Wellington, the firm’s flagship multi-strategy fund, returned 5.94% in July, bringing its gain for the year to 12%.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)