Ken Griffin’s Citadel hedge fund made history last year by earning $16 billion in profits for its investors, the most significant dollar gain by a hedge fund in history. The company, which manages $54 billion in assets, achieved a 38.1% return in its main hedge fund and significant gains in other products, resulting in a record-breaking $16 billion profit for investors after fees, according to research by Edmond de Rothschild’s LCH Investments.
This achievement surpasses the previous record of roughly $15.6 billion made by John Paulson in 2007. This profit resulted from successful bets across various asset classes, such as bonds and equities. Last year, the significant sell-off in government bonds presented a prime opportunity for many macro managers, resulting in their biggest gains since the global financial crisis.
Citadel, the hedge fund founded by Ken Griffin in 1990, made a total gross trading profit of about $28 billion last year. This means that the company charged its investors, which include one-fifth of its employees, roughly $12 billion in expenses and performance fees. The significant fee illustrates how many investors are willing to accept high pass-through costs, which include trader pay, technology, and rent if net returns are high. These charges tend to be higher during solid returns as the trader’s pay is linked to performance. This achievement solidifies Citadel as the most successful hedge fund company of all time.
