A little less than a year after he was forced to call a press conference to reassure investors that his Citadel Investment Group Inc. wasn't about to go under, Ken Griffin is gunning for growth again.
With its core funds up more than 50% this year and December's ban on investor withdrawals about to be lifted, Citadel has begun moving aggressively into investment banking — a key step toward turning Chicago's biggest hedge fund into the broad-based financial institution Mr. Griffin long has envisioned.
The company has landed its first investment banking gig — a $3.5-billion debt-restructuring job for hotelier Fontainebleau Resorts LLC — and has won hundreds of clients for a new institutional sales and trading division.
“We are back on offense,” Chief Operating Officer Gerald Beeson said.
A year ago, Citadel was playing defense, fending off rumors that federal officials were close to shutting it down and scrambling to reassure lenders that it had enough cash to make good on its borrowings. With panicky investors clamoring to withdraw their funds, Mr. Griffin placed a hold on redemptions. But by spring, Citadel's trading operation had stabilized. In May, it began its push into investment banking.
Citadel, with $13.5 billion in assets, has since hired 70 bankers and institutional traders, many from big Wall Street firms like Merrill Lynch & Co. and Citigroup Inc. The company also is expanding other financial services lines. Citadel more than doubled its hedge-fund administration business, which manages trading platforms and other back-end functions for outside funds, by adding a huge new client — Lehman Bros.' $40-billion portfolio, being unwound in Bankruptcy Court — and this month it received approval to begin market-making incorporate bond trading.