Billionaire investor Ken Griffin's Citadel has sold more than $4 billion worth of bets from the original portfolio of Situational Awareness, an AI-focused hedge fund led by former OpenAI researcher Leopold Aschenbrenner. The sale, which represents over 80% of the initial holdings, occurred last month following heavy losses in tech stocks that forced Situational Awareness to unwind most of its public equities portfolio, according to a letter to investors seen by Reuters and reported by livemint.com.
Citadel completed nearly 100 block trades to shed positions from the acquired portfolio, including the largest intraday block trades of the year in 10 different stocks, Ken Griffin said. The portfolio was purchased from Situational Awareness after the fund faced significant declines in its tech holdings. Citadel Wellington, Citadel's flagship multi-strategy fund, gained 5.94% in July and is up 12% for the year, highlighting the firm's active management strategy amid market volatility, livemint.com reported.
The divestment underscores the challenges AI-focused hedge funds face in managing concentrated tech bets amid market turbulence. Situational Awareness's decision to sell its public equities portfolio to Citadel reflects broader sector pressures. Citadel's rapid disposal of these positions through block trades demonstrates its capacity to handle large-scale portfolio adjustments efficiently. The scale of the trades marks some of the largest intraday block transactions this year, illustrating Citadel's significant market influence, according to livemint.com.
Citadel's shedding of over $4 billion in Situational Awareness bets follows the fund's acquisition of the portfolio last month. The moves come as Citadel Wellington continues to perform well, with a 5.94% gain in July and a 12% increase year-to-date, as detailed by livemint.com.