Citadel Staff’s Fund Stake Triples to $9 Billion in Four Years
Strong returns and deferred capital boosted employees’ assets
Ken Griffin is the Wellington fund’s single biggest investor
Insider Capital Swells at Citadel
Citadel employees’ investment in its $45 billion flagship hedge fund surged during the past several years, driven by robust returns and lockups that the firm imposes on a big chunk of their annual compensation. Bloomberg's Miles Weiss has the story. (Source: Bloomberg)
Excerpt
Originally published October 17, 2024 at 7:30am EST
Citadel employees’ investment in its $45 billion flagship hedge fund surged during the past several years, driven by robust returns and lockups that the firm imposes on a big chunk of their annual compensation.
The assets held by principals and staff in the Citadel Wellington fund jumped to 20% as of Dec. 31 from 12% at the end of 2019, filings show. In dollar terms, the value of their combined stake, including that of founder Ken Griffin,more than tripled to about $9 billion during that span.
The figures offer a rare glimpse into how Citadel is balancing divvying up the spoils of a stellar investing run and retaining the portfolio managers that produced it. Much of the increase in the employee share is attributable to the performance of Wellington, which generated annualized returns of 25.9%.
That resulted in higher payouts for Citadel traders and portfolio managers, who are required to leave roughly half of their incentive awards, over a hurdle, in the fund for 3 1/2 years.
“Citadel’s principals and employees have invested in our funds for over 30years,” Ed O’Reilly, head of the firm’s client and partner group, said in a statement. “Our alignment of interests with our external capital partners is a powerful statement about our commitment to building a lasting franchise.”