Weekend Dealbreaker: The Walls Close In

Publish date:

Color us surprised. Citadel has frozen withdrawals in their two largest funds until March (for starters).

Investors who asked to withdraw money at year end from Kensington and Wellington, with a combined $10 billion in assets, won't be allowed to, the Chicago firm said in a letter on Friday. Otherwise, $1.2 billion would have come out, complicating Citadel's attempt to resuscitate its performance following its hedge funds' worst-ever year.
The move follows repeated assurances from Citadel that redemption requests wouldn't pose a problem. The firm's total assets have shrunk to about $13 billion from $20 billion at the start of the year. Mr. Griffin says in the letter that "in today's highly volatile markets, maintaining financial flexibility must be a priority." (Emphasis ours).

Well, I suppose the redemption requests did not actually pose a problem. For Citadel, that is.
Citadel Freezes Its Funds Through March [The Wall Street Journal]