Citadel's Kenneth GriffinCitadel Investment Group has lifted its redemption suspension 10 months after barring withdrawals, making good on a promise it made last month.

The Chicago hedge fund giant imposed redemption gates in December to close a year in which its flagship funds lost more than 50%. By the end of last year, investors had sought to withdraw more than $1.5 billion from the firm.

But like many of its peers, Citadel has had a big bounce-back year. The Kensington and Wellington funds, so hard-hit last year, have soared 57% this year.

That improved allowed the firm to fill $250 million in redemption requests earlier this month. Last month, the firm said it would return the remaining $1 billion in outstanding redemption requests by the end of the year. In February, Citadel founder Kenneth Griffin promised to ease or lift the redemption restrictions “as our balance sheet continues to strengthen and the liquidity of our investment portfolio continues to improve.”

The lifting of the gates was first reported by The Wall Street Journal.

In his letter to investors yesterday, Griffin said Kensington and Wellington would focus on greater diversification and liquidity going forward.

“Unquestionably, some of our core strengths became liabilities last fall, including perhaps a degree of overconfidence in our ability to weather almost any market catastrophe,” Griffin wrote.