Citadel Investment Group’s main hedge funds lost 53 per cent for 2008. But, notes Dow Jones, “Citadel has weathered the downturn better than some fund managers thanks to its financial flexibility and its size, at a time when the industry is contracting and many smaller funds are forced to close down.”
Hear that? They aren’t the worst! They are “better than some.” It’s just half the money, right? It’s not like they lit it on fire or anything. They just got clobbered by reality failing to comply with the mandates of the models for bond prices.
“The $10 billion Kensington and Wellington funds reportedly fell about 9 per cent during the first 24 days of December, following a 13 per cent loss in November, Dow Jones said. In 2007, the fund finished up 30 per cent,” Dow Jones reports.
Citadel is far from dead, however. Its investors are now locked in, so redemptions won’t wipe out the firm. Founder Ken Griffin is said by Citadel insiders to be confident about the ability of his funds to generate returns in 2009.