Ken Griffin says Citadel unwound more than 80% of risk tied to Situational Awareness portfolio

Key Points:

• Ken Griffin of Citadel disclosed for the first time the firm's acquisition of assets from Leopold Aschenbrenner's Situational Awareness hedge fund, stating that over 80% of the original portfolio risk has been unwound through more than 100 block trades exceeding $4 billion in market value.
• Citadel began discussions to acquire Situational Awareness holdings on July 29, shortly after the fund was forced to liquidate its public stock positions due to steep losses, with Citadel confirmed as the buyer.
• Griffin credited the successful transaction to the cooperation of trading and prime brokerage teams at the banks involved, emphasizing the rapid transfer of the portfolio.
• Citadel's flagship Wellington fund returned 5.94% in July, marking its best monthly performance since 2022.
• Situational Awareness, focused on AI-related trades, suffered significant losses as its long positions in AI stocks and short positions in software companies both declined, triggering margin calls and forced sales; since Citadel's purchase, the AI trade has rebounded, with the sale marking a bottom for the June sell-off.