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Citadel’s Bets Brought in Heavy Returns in 2022

Kenneth Griffin’s Citadel was the winner among hedge funds last year, as it churned out a record $16 billion in profits, according to data from LCH Investments. Citadel’s gain, after adjusting for fees was larger than John Paulson’s gain made in 2007 during the subprime mortgage crisis

The top three hedge funds in this list included Citadel, Ray Dalio‘s Bridgewater Associates, and D.E. Shaw Group. However, according to the LCH data, the top 20 best-performing hedge funds in 2022 recorded their slimmest gains since 2016 of $22.4 billion.

2022 proved to be a tough year for hedge funds as macroeconomic uncertainty including higher inflation, rising interest rates, and geopolitical turmoil weighed on markets. As a result, according to LCH data, hedge funds lost $208 billion last year, its largest single-year decline since 2008, when they lost $565 billion.

Citadel was founded in 1990 by Kenneth Griffin and as of January 1, had $53 billion in assets under management (AUM). According to a Reuters report, Citadel’s flagship Wellington portfolio increased 38% last year while its fixed-income fund was up 33%.

While Citadel has declined to comment on its investment strategy, according to a Reuters report, hedge funds that focused on macro trends and their trading strategies profited last year.

Some of the companies that Citadel is upbeat about include Microsoft (MSFT), Apple (AAPL), and Meta Platforms (META).

Compared to the substantial rise in Citadel’s flagship Wellington portfolio, the S&P 500 (SPX) dropped by more than 12% in the past year.

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