Citadel High-Frequency Trading Fund Up 300% Since Debut

Apr 15 2014 | 12:25pm ET

Don't expect to find Michael Lewis' Flash Boys on Kenneth Griffin's list of favorite books from this year.

Griffin's hedge fund, Citadel Investment Group, has done very well indeed with high-frequency trading strategies, which Lewis argues are essentially insider-trading that have "rigged" the U.S. stock market. The Chicago-based firm's Tactical Trading Fund is up more than 300% since its launch in 2007, Bloomberg News reports.

The $830 million fund has suffered only five losing months since its debut, and has never lost more than 1% in any of them. Tactical Trading boasts annualized returns of 26% since inception.

While Citadel's flagship hedge funds, Kensington and Wellington, were losing more than half their value in 2008, Tactical Trading was up 31%. That marked the fund's height as a high-frequency trading vehicle; a year later, Citadel began to diversify the vehicle with other strategies, adding an equity market-neutral component in 2009 and statistical arbitrage in 2010, presaging similar moves by HFT firms as returns have lagged amidst greater competition.

High-frequency trading now accounts for only about a quarter of Tactical Trading's profits, and the strategy is used exclusively in non-equity futures.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...