Despite the expert guidance of one Ben Bernanke, the world’s once most levered hedge fund, Citadel, is reportedly returning money to some global hedge-fund clients.
Bloomberg reports that Ken Griffin’s Citadel LLC is forcing out some of the clients in one of its multistrategy hedge funds as it seeks to tighten up its investor base, according to people with knowledge of the matter.
The timing is intersting as Citadel’s move comes amid a revival of interest in hedge funds.
Hedge funds raised $13.4 billion in August, the second-largest monthly amount in two years, boosting net inflows for the year to $39 billion, according to data provider eVestment.
This marks a turnaround from 2016, when investors pulled $112 billion amid mediocre performance.
Bloomberg reports that some of the investors, particularly funds-of-funds, will receive all their money back from the Citadel Kensington Global Strategies Fund by the end of the year, the people said, asking not to be identified because the information is private.
Others will get back a portion of their investment, one of the people said.
In an obvious attempt to quell any anxiety, a spokesperson reassured this is standard operating procedure, as hedge funds sometimes return part of their capital because managing too much money can hurt performance.
“We have routinely made profit distributions, in whole or in part, across a number of our funds over the past 20 years,” Zia Ahmed, a spokesman for Citadel, which oversees $27 billion, said by email.
Notably performance has not been dreadful. Citadel’s main Wellington and Kensington funds gained 9.2 percent this year through August. Its Global Equities Fund was up 6.8 percent.
Still, we don’t feel too bad for Mr. Griffin after hauling in $600 million last year…
via http://ift.tt/2yw9clk Tyler Durden