Citadel Unwinds Over 80 Percent of Situational Awareness Portfolio

Ken Griffin's Citadel has shed more than 80 percent, or 4 billion dollars, of the bets from the original portfolio of Situational Awareness. The AI focused hedge fund, run by former OpenAI researcher Leopold Aschenbrenner, sold the bulk of its stock bets to Citadel last month after heavy losses in tech holdings forced it to unwind most of its public equities portfolio. The Situational Awareness portfolio lost 67 percent of its value in July and was forced to unwind most of its 16 billion dollar public equities book.

Citadel completed nearly 100 block trades to shed positions in the portfolio. Griffin stated that the process included the largest intraday block trades of the year in 10 different names. In a letter to investors, Griffin noted that the ability to distribute this risk was central to the investment thesis and highlighted the firm's ability to evaluate complex risks and execute with precision. He also credited the cooperation of trading and prime brokerage teams at the banks serving both firms for the completion of the transaction.

Citadel, which manages about 77 billion dollars in assets, declined to comment. The firm's flagship multi strategy fund, Citadel Wellington, gained 5.94 percent in July and is up 12 percent for the year.