Ken Griffin's Citadel gains from discounted purchase of Leopold Aschenbrenner's collapsing Situational Awareness fund.
Ken Griffin's Citadel reported strong gains across its major hedge funds in July, largely driven by a recovery in market risk assets and a strategic acquisition. The firm's flagship Wellington fund returned 5.9% in July, while its tactical and equities funds achieved their best monthly performances ever. These gains were bolstered by Citadel's purchase of the bulk of the public-stock portfolio from Leopold Aschenbrenner's Situational Awareness fund. The fund nearly collapsed after a sharp reversal in artificial intelligence trades caused steep losses and margin calls. Citadel acquired the holdings at a significant discount, benefiting from the market rebound at the end of the month. While Situational Awareness struggled with its AI infrastructure bets, Citadel utilized the market dislocation to deploy capital into the distressed assets. Stocks like Nebius and Micron, which were part of the Aschenbrenner portfolio, rallied in the final days of July, providing a boost to the firm's performance.