Ken Griffin’s Citadel churned out a record $16 billion in profit for clients last year, outperforming the rest of the industry and eclipsing one of history’s most successful financial plays.
The top 20 hedge fund firms collectively generated $22.4 billion in profit after fees, according to estimates by LCH Investments, a fund of hedge funds. Citadel’s gain was the largest annual return for a hedge fund manager, surpassing the $15 billion that John Paulson generated in 2007 on his bet against subprime mortgages. This was described as the “greatest trade ever” in a subsequent book of the same name by Gregory Zuckerman.
Citadel’s performance wasn’t about one trade. Its flagship hedge fund gained 38% last year by trading everything from equities to commodities, Bloomberg reported earlier this month. The firm made money in each of its five core strategies, which also include fixed income and macro, quant and credit. Citadel returned about $8.5 billion in profit to investors at the end of last year.
