Tuesday, 3 March 2015
Last updated 7 min ago
Jul 28 2011 | 12:54pm ET
Add Citadel Investment Group to the list of top hedge funds cutting risk.
The $11 billion hedge fund giant is now requiring all equity managers to balance their books at the end of each trading day. The beta-neutral order was put into place in recent weeks, limiting the amount of risk that Citadel portfolio managers can take, Hedge Fund Alert reports.
Citadel isn't the only firm reining in risk: Soros Fund Management, before its announcement this week that it would return all outside capital, is currently about 75% in cash, and Moore Capital Management has also been cutting risk. Both of those firms are down about 6% through the first half.
Citadel's reasons for cutting risk may be somewhat different, however. The firm, whose flagship Kensington and Wellington funds are up about 11% this year but remain below their high-water marks, may be planning to boost leverage in an effort to get over that hump and begin charging performance fees once again, according to HFA.
The firm has denied reports that it recently raised its leverage limit on stock investments, saying that it has held steady at about six-times levered. Citadel's flagships were roughly eight time levered in 2008, when Kensington and Wellington each lost more than half their value.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…