The two main hedge funds run by Citadel CEO Ken Griffin delivered returns of 20.4% last year, recouping most of the losses his clients endured in 2008, according to a source familiar with the firm's results.
Citadel’s Kensington and Wellington funds lost 55% in 2008, but then recovered 62% in 2009 and 11% in 2010.
The consecutive gains mean that Citadel clients, depending on when they placed money with the firm, have seen their investments climb back to or above pre-2008 levels. For Citadel, the biggest hedge fund company in Chicago with about $11.5 billion in assets under management, returning to the former so-called high-water mark means it once again can start retaining a slice of returns.
Citadel’s 2011 results were among the top 10 best performances of hedge funds with $1 billion or more under management, according to a Bloomberg ranking.
The performance stands out in a year when market volatility flummoxed many managers who ended up posting poor results. Hedge funds on average dropped about 4.8%, according to a weighted composite index tracked by Hedge Fund Research. It was only the third time the index logged a loss since it was created in 1990.
Lynne Marek is a writer for Crain's Chicago Business, a sister publication of Pensions & Investments.