Citadel Departure Bomb

Things at Citadel going from worse to much worse. Hedge Fund Alert reporting that Peter Jenson, Citadel's controller is likely to leave Citadel in the next few days to become COO of Harbinger. As ZH disclosed previously, the split between Harbinger and Harbert has made many institutional investors nervous, and Falcone is seeking to reassure them by making several high profile hires. Now if only Harbinger could reassure its investors by making the stock of NYT, CPN, FMG, and NAV at least get back to the fund's cost basis. Sphere: Related Content

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Citadel Trader Exodus Continues

Following the departure of Misha Malyshev, Citadel has lost yet another trader, this time a member of its tactical-trading group. Jace Kohlmeier, presumably a computer science grad out of Princeton, has decided he is not waiting around to see if Citadel can hit its high water mark at some point this century and left for greener pastures. Sphere: Related Content

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Citadel Troubles Escalating

The fallout from Citadel's nebulous future is spreading. Russki Algo trading genius Misha Malyshev, who was classified as Citadel's Head of High-Frequency Trading, and who was responsible for some of the only profits at Citadel last year, generating 40% returns for the two funds under his control has left the firm. His gains paled when compared to the 55% losses by the two biggest funds, Kensington and Wellington. This was also likely an issue when calculating his "bonus" and his eventual career decision. It is unclear as of yet where Misha has resumed trading at a high frequency. The high-frequency trading group at Citadel is (or rather was) part of the Capital Markets group, headed by Rohit D'Souza who was poached from Merrill last year, and manages about $2 billion. Will be curious who, if anyone, will be dragged in to replace the stern looking Misha.

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Ken Griffin To Resume Bleeding To $0 AUM Soon

The stampede of Citadel clients who have been eagerly waiting to pull their money (which, despite a 4.95% up January, is still worth roughly 50 cents on the dollar after last year's performance) will be let loose any day now. Bloomberg reports that in a letter to investors, Kenny Griffin has realized that it is beneath any self-styled master of the universe to keep cash locked up despite loud protests to the contrary.

Citadel will decide each quarter whether to make payments from its Wellington and Kensington funds, Griffin, 40, said in an investor letter yesterday. Clients will be notified of any amounts available for redemption.

“We believe that this plan will allow us to maximize the value of our portfolio holdings and capitalize on opportunities in the marketplace,” Griffin said in the letter, a copy of which was obtained by Bloomberg News. He said the firm had “significantly” cut its holdings in hard-to-sell assets.

As this may push clients of other funds to finally succeed in getting access to their money, and force redemptions to resume, it is likely that the aggressive sell-down and deleveraging that hedge funds had to do in October and November repeats itself again, this time with even more feeling. Sphere: Related Content

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