Ken Griffin's Citadel will allow investors to pull a total of $1 billion from its main hedge funds without incurring fees or penalties, a sign that clients are grappling with the economic fallout from the coronavirus pandemic.
The move, an exception from the firm's usual practice, is aimed at providing relief to those invested in Citadel's flagship Wellington and Kensington funds, according to an investor letter seen by Bloomberg. Such clients are primarily institutions like pension funds. Citadel manages about $30 billion.
"In the wake of the unprecedented conditions created by the COVID-19 pandemic, we recognize that our investors may have different capital needs, both in size and timing, than originally anticipated at the beginning of the year," according to the Citadel letter dated Monday. "In response to these potential demands, we are offering $1 billion of additional liquidity to investors in our multistrategy funds on June 30, 2020 without being subject to any redemption fees or other restrictions."
A representative for Chicago-based Citadel confirmed the contents of the letter. The multistrategy hedge fund gained about 4% in April and is up about 10% so far this year. It rose 19.4% last year.