Greatest trade ever? Citadel’s $16 billion haul smashes hedge fund records

Citadel is now the most successful hedge fund ever after it made $16 billion last year — the biggest annual windfall on record.

The Miami-based fund, founded and run by Ken Griffin, topped the 2022 ranking of the world’s best-performing hedge funds based on estimates from LCH Investments NV. Its huge gains came as many other investors suffered from steep drops in equity and bond markets.

Citadel’s record-breaking performance last year took total gains for the fund since its inception to nearly $66 billion. That knocked Ray Dalio’s Bridgewater — with gains of $58.4 billion — off the top spot for the first time in seven years.

Dalio’s fund made $6.2 billion last year, bringing total assets under management to $81 billion. Citadel manages $62 billion in assets.

“[Citadel’s $16 billion profit] even surpasses [John] Paulson’s 2007 gain, which has been described as ‘the greatest trade ever,'” Rick Sopher, chairman of LCH Investments, said in a press release on Monday.

Paulson, an investor, made $15 billion in 2007 after he bet that the value of securities backed by subprime mortgages would collapse, an event that helped trigger the global financial crisis.

“[Citadel’s] progress up the rankings in the past few years has been remarkable,” Sopher added.

Sopher said that Citadel, which started in 1990, does not rely on an investment strategy tied to rising asset prices, and has “multiple sources of profits,” two factors which may explain its record gain despite a volatile ride for markets last year.

Overall, the top 20 hedge funds made $22.4 billion in net gains in 2022, down almost 66% from the year before when markets were soaring, according to LHC Investment data. The S&P 500 index, by comparison, lost about 19% last year.

Citadel told CNN that it would not comment on a story related to its performance.

LCH was launched in 1969 and is the world’s oldest fund of hedge funds.

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