Tag Archives: Ken Griffin

Ken Griffin Makes $2.5 Billion in 2021 as Investigation Looms

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Citadel LLC CEO Kenneth Griffin made $2.5 billion in 2021. That was enough to give him third place among hedge fund managers in the list just released by Institutional Investor.

For Griffin, its unclear how long the good times will last. His firm is under federal investigation.

Investigators are examining the communications of Andrew Liebeskind, one of his top traders, among others. And if that weren’t bad enough, other investigators are looking into Melvin Capital, in which Citadel invested billions.

That probe too could lead to Citadel.

I found it interesting that Griffin was bested by Jim Simons of Renaissance Technologies LLC, who earned $3.4 billion, putting him in first place. Simons’ firm has been a buyer of meme stocks including AMC Entertainment Holdings Inc.

Perhaps it’s easier to swim with the current than against it.

Not being under federal investigation probably helps too.

Have a great weekend everyone!👋

More on markets:

Citadel Under Federal Investigation

Melvin Capital Under Federal Investigation

FBI Raids Short Sellers

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Photo: Citadel LLC CEO Kenneth Griffin

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Citadel Can’t Beat the S&P 500, Despite High Fees

Citadel LLC trailed the S&P 500 in 2021, returning 26.3% to the market’s 29%.

Citadel charges as much as 5% or more of the fund’s assets every year, in addition to 20% of all gains. These fees are among the highest of any investment fund.

Why should investors pay such massive fees when the Vanguard S&P 500 Index Fund Admiral fund (which I own) charges a mere 0.04% of assets with no performance fee?

The only possible justification would be returns that are consistently far higher than the market’s. While Citadel’s Wellington fund has outperformed the market in some years, such as 2020, its performance is inconsistent.

Few hedge funds have consistently beat the market. Jim Simon’s Medallion fund has returned 39% a year net of fees annually since 1988, but is closed to new investors.

Perhaps this underperformance is why Citadel is trying to make it harder for investors to withdraw their money.

Unless a fund can consistently beat the market by a wide margin, high fees will make it a losing investment. Hedge funds sound mysterious and awesome, but you may do better with boring old Vanguard!

More on markets:

AMC Fails to Deliver Soar Past 400,000

How Solana Could Wipe Out Visa and MasterCard

Citadel Holding Nearly $500 Million in AMC Options

Photo: Citadel LLC CEO Kenneth Griffin

If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

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