When rival hedge funds face catastrophic losses, billionaire investor Ken Griffin has a habit of identifying opportunities and showing up with a checkbook. Citadel’s founder last week reprised his role as one of Wall Street’s rescue buyers, stepping in to salvage California hedge fund Situational Awareness as it buckled under souring bets on artificial intelligence (AI) stocks.Amid market rumblings that at least one firm was in trouble, Griffin, 57, assembled his top lieutenants to investigate, five people with knowledge of the matter said.By Wednesday morning, Citadel executives had reached out to Situational Awareness, and Griffin spoke directly with Leopold Aschenbrenner, the fund’s young founder and a former OpenAI researcher.
Citadel Founder and CEO Ken Griffin attends the 56th annual World Economic Forum meeting in Davos, Switzerland, on January 21.
Together with Citadel co-chief investment officer Pablo Salame, chief operating officer Gerald Beeson, Perry Vais, its head of equity quantitative research, and chief legal officer Shawn Fagan, Griffin pulled an all-nighter to analyze the trading book positions of Situational Awareness and how liquid the bets were, the sources said. After a selloff in AI stocks, the Situational Awareness portfolio lost 67 percent of its value last month, and the fund was forced to unwind most of its US$16 billion public equities book. By Thursday, Citadel had bought a chunk of its book.“We let you down,” Aschenbrenner wrote to his investors in a letter seen by Reuters.
