Citadel Investment Group


Citadel Investment Group

Infobox_Company
company_name = Citadel Investment Group, L.L.C.
company_
company_type = Private, Limited Liability Company
company_slogan =
owner =
foundation = 1990
location = flagicon|USA Chicago, Illinois, USA
key_people = Kenneth C. Griffin, Founder and Chief Executive Officer
industry = Hedge fund Management
num_employees = 1,200
products = Alternative Investments
revenue =
homepage = [http://www.citadelgroup.com www.citadelgroup.com]

Citadel Investment Group is a hedge fund management firm based in Chicago, Illinois, founded by billionaire trader Kenneth C. Griffin. With over $20 billion [ [http://www.citadelgroup.com/About Citadel] ] in assets under management (AUM), the firm is one of the world's largest hedge fund managers and its daily trading volume amounts to approximately 3% of average daily trading activity in London, New York, and Tokyo.cite news
last = Fortune
title = A hedge fund superstar
publisher = CNN
date =2007 April 3
url =http://money.cnn.com/magazines/fortune/fortune_archive/2007/04/16/8404298/index.htm | accessdate = 2007-12-07
] Funds sponsored by the firm require longer "lock-up" periods from investors than many other hedge funds. Although Citadel employs over 1,400 individuals globally, its flagship operation is located in the Citadel Center a $355 million office tower in the heart of downtown Chicago (in 2006 the tower was purchased for $560 million by Robert Gans) cite news
last =Carr
first =Robert
title =Citadel Center Trades in $560M Transaction
publisher =globest
date =2006 October 27
url =http://www.lightstonegroup.com/press_102606.html
accessdate = 2006-01-27
] cite news
title =Dearborn Center Announces 206,146 Square Foot Lease with Citadel
publisher =Beitler RE Corp
date =2001 March 9
url =http://beitlerre.com/story.php?id=32&PHPSESSID=46018398e1c902347809b2c3de2b1a6c
accessdate = 2006-01-27
] . Citadel also has offices in New York, Tokyo, Hong Kong, San Francisco, and London cite news
title =Harbin Electric Closes $50.0 Million Financing
publisher =Harbin Electric
date =2006 August 31
url =http://www.harbinelectric.com/News/08-31-06-02.htm
accessdate = 2006-01-27
] . Of the 100 largest hedge funds, Citadel's is the only based in Chicago cite news
last =Rose-Smith
first =Imogen
title =Land of the Giants
pages =3
publisher =Alpha magazine
date =2006 2006
url =http://www.deshaw.com/articles/Alpha.pdf
accessdate = 2008-03-20 (dead link)
] . Citadel is the eleventh largest hedge fund manager in the world ; it is also the second largest multi-strategy hedge fund manager in the world cite news
last =Hutchins
first =william
title =Citadel leads the way in financial self-sufficiency
publisher =Financial Times
date =2006 December 8
url =http://www.financialnews-us.com/?page=uspeoplemoves&contentid=1046717350
accessdate = 2006-01-27
] .

This type of bandwidth allows Citadel to staff a technology department of about 500 support professionals. Griffin believes that Citadel’s technology capabilities “gives us a substantial competitive advantage in the market place …and that’s why, when Amaranth needs a partner or Sowood needs a solution or E*TRADE needs capital infusion or the investment banks have a large risk transference trade to do, they come to Citadel.” cite news
last =Staff
first =Staff
title =Alpha Hedge Fund Hall of Fame
pages =10
publisher =Alpha magazine
date =2008
accessdate = 2008-10-10
] .

The local press has lampooned Citadel as "Chicago's revolving door." ] . (People close to the firm say turnover is on a par with a typical investment bank's.) cite news
last = Fortune
title = A hedge fund superstar
publisher = CNN
date =2007 April 3
url =http://money.cnn.com/magazines/fortune/fortune_archive/2007/04/16/8404298/index2.htm | accessdate = 2007-12-07
] . ] Commenting on this reputation, Griffin has said, “People say…’It’s a tough place to work. It’s demanding. It’s unrelenting.’ I look at these as strengths inherent in strong companies…I’m very proud that we have a sterling reputation when it comes to doing what we say we’re going to do.” cite news
last =Staff
first =Staff
title =Alpha Hedge Fund Hall of Fame
pages =10
publisher =Alpha magazine
date =2008
accessdate = 2008-10-10
] .

Despite prior talk in Wall Street that Citadel was considering an IPO and that Kenneth C. Griffin mentioned the possibility in an interview, in April 2006, a spokesperson for Citadel said the firm currently has no such plans cite news
last =Reuters
title =Citadel Investments to stay private
publisher =Crain's
date =2005 April 29
url =http://chicagobusiness.com/cgi-bin/news.pl?id=16336
accessdate = 2006-01-27
] . However, in November 2006 Citadel became the first hedge fund to issue bonds. In a bond offering led by Lehman Brothers and Goldman Sachs, Citadel announced it would sell $2 billion worth of notes. cite news
last =Reuters
title =Citadel to sell up to $2 billion in debt
publisher =Crain's
date =2006 November 28
url =http://www.chicagobusiness.com/cgi-bin/news.pl?id=23009
accessdate = 2006-01-27
] The bonds have been given an investment-grade rating by Standard & Poor's. cite news
last =Anderson
first =Jenny
title =INSIDER; Some Hedge Funds Decide That Relying on Banks Is Just Too Risky
publisher =The New York Times
date =2006 December 1
url =http://select.nytimes.com/gst/abstract.html?res=F10A16FA355A0C728CDDAB0994DE404482
accessdate = 2006-01-27
] .

Currently, “Citadel’s clients include high-profile sovereign wealth funds, charity foundations, wealthy families and various financial institutions.” Since Griffin founded the firm 20 years ago, it “has diversified its business from a hedge fund to a financial institution focused on alternative investment management.” Proud of Citadel’s growth, Griffin recently said, “The name Citadel means strength and it speaks to our culture of performance, risk management and our ability to succeed in volatility" cite news
last =Huiyin
first =Chen
title =Griffin: Arbitrage in Volatile Markets
publisher =Caijing Magazine
date =2008 April
accessdate = 2008-10-10
] .

Investments

In 2004, Citadel founded CIG Re, a Bermuda-based catastrophe reinsurer cite news
last =Zuill
first =Lilla
title =Hedge fund investments in reinsurance broaden
publisher =The Royal Gazette
date =2005 August 22
url =http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20050822/BUSINESS/108220122
accessdate = 2006-01-28
] . In 2005, the hedge fund founded a $500 million catastrophe reinsurer in Bermuda called New Castle Re cite news
last =finanzanch
title =Citadel forms catastrophe reinsurer New Castle Re - AM Best
publisher =AFX & marketwatch
date =2005 April 11
url =http://www.finanznachrichten.de/nachrichten-2005-11/artikel-1978827.asp
accessdate = 2006-01-28
] .

Citadel also has multiple subsidiaries such as Kensington Global Strategies (Citadel's largest fund cite news
last =Toomre
first =Lars
title =Citadel Investment Group Off to Flying 2006 Start
publisher =Toomre Capital
date =2006 March 13
url =http://www.toomre.com/node/326?PHPSESSID=9149edee3bfc92e3eb3e423f9eaac5d2
accessdate = 2006-01-28
] ), Wellington Partners cite news
last =Mannes
first =George
title =Citadel Storms Into Google
publisher =thestreet.com
date =2004 November 15
url =http://www.thestreet.com/_yahoo/tech/georgemannes/10194349.html
accessdate = 2006-01-27
] (Citadel's oldest fund and its flagship fund cite news
last =Maday
first =Tom
title =Meet Ken Griffin
work =Cover Story
publisher =Institutonal Investor
date =2001 September
url =http://ddo.typepad.com/ddo/files/Citadel_2001.pdf
accessdate = 2006-01-28
] ), Citadel Equity Fund cite press release
title =Court halts investor squeeze out by DEPFA Deutsche Pfandbriefbank AG
publisher =Morgan Lewis
date =2004 October 14
url =http://www.morganlewis.com/pubs/DEPFA.pdf
accessdate = 2006-01-28
] , Citadel Finance [http://today.reuters.com/news/articleinvesting.aspx?type=newIssuesNews&storyID=2006-12-07T225005Z_01_N07639959_RTRIDST_0_CITADEL-DEBT-NOTES-TABLE.XML] , and Citadel Derivatives Group, which controls 10% of the Philadelphia Stock Exchange [http://select.nytimes.com/gst/abstract.html?res=FA0813FE3C5F0C758DDDAF0894DD404482&n=Top%2fReference%2fTimes%20Topics%2fOrganizations%2fC%2fCitadel] . In 2000, Citadel's Wellington affiliate achieved a 52.6% return [http://lhv.delfi.ee/images/files/griffin.pdf] . Since January 2005, Citadel Derivatives Group has been a Lead Market Maker on the trading floor of the Pacific Coast Exchange [http://press.arrivenet.com/business/article.php/464476.html] . In a strategic partnership with about ten other financial institutions, Citadel Derivatives Group is also a joint owner of the International Securities Exchange [http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20061025005478&newsLang=en] .

In 2006, Citadel and JPMorgan Chase acquired the energy portfolio of the failed hedge fund Amaranth Advisors, which had suffered a 65% ($6 billion) loss in assets [http://www.sciencedaily.com/upi/index.php?feed=Business&article=UPI-1-20060921-07292100-bc-us-amaranth.xml] [http://www.bloomberg.com/apps/news?pid=20601103&sid=aKNAB7Io8Pyc&refer=news] .

In 2007, Citadel acquired a sizable stake in online brokerage E*TRADE [https://investor.etrade.com/releasedetail.cfm?ReleaseID=279066] .

Citadel's daily trading activity reportedly accounts for "some 20 to 25% of all the options contracts in America" cite news
last =Staff
first =Staff
title =Alpha Hedge Fund Hall of Fame
pages =10
publisher =Alpha magazine
date =2008
accessdate = 2008-10-10
] .

Other information

Citadel Investment Group is not related to any of the following organizations:

  • [http://www.citadel.co.za/ Citadel Investment Services] , a South Africa-based wealth management group
  • [http://citadelworld.com/ Citadel Group] , a global financial services firm
  • [http://www.citadelinvestments.net/contactus.htm Citadel Investments] , a New York based mortgage broker
  • [http://www.citadel-group.com/ Citadel Group] , a Chicago based healthcare financing organization
  • [http://www.citadelassociates.com/ Citadel Associates] , a London and Boston based provider of data management software to the investment management industry

Notes

External links

* [http://www.citadelgroup.com Citadel Investment Group Home Page]
* [http://www.chicagoarchitecture.info/Building/1098/Citadel_Center.php Pictures of Citadel Center in Chicago]
* [http://accenture.tekgroup.com/article_display.cfm?article_id=4253 Data management agreement between Citadel and Accenture]


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