Current Events > Ken Griffin Citadel makes 16 BILLION profit most successful company EVER

(+) Yeah! (+)

Citadel, the hedge fund run by billionaire Ken Griffin, reported a record $16 billion in profit last year knocking off Ray Dalios Bridgewater as the most successful firm seven years running.
The Miami-based investing giant, which manages $54 billion in assets, reported a 38.1% return on its main hedge fund, according to the Financial Times, which cited research by LCH Investments, a subsidiary of European-based investment house Edmond de Rothschild.

LCH Investments reported that Citadels total gross trading profit last year amounted to $28 billion. Investors were charged around $12 billion in expenses and performance fees, according to FT.
Since its founding in 1990, Citadel has reported net gains of $66 billion besting Dalios Bridgewater, which generated net gains of more than $58 billion.

The $16 billion profit that Citadel netted for its investors surpasses the $15.6 billion bet made by John Paulson against subprime mortgages back in 2007.

Citadels windfall wasnt powered by any single outsized bet, but rather by successful trades across the equities and fixed income markets, according to Bloomberg. Citadel also generated revenue by moving beyond options trading and expanding into equities, foreign exchange, credit indexes, commodities, exchange-traded funds, and interest-rate swaps.

Citadel told investors its flagship Wellington fund returned roughly 32% through the end of November, a sharp contrast to much of Wall Street and the economy at large. By then, the average hedge fund lost 4% and the benchmark S&P 500 stock index plunged 16% as the Federal Reserve wrestles with high inflation and a potential recession.

Citadel Securities, which has been dubbed the Amazon of financial markets, is responsible for one out of every five stock trades made in the United States.

It has become one of Wall Streets biggest market makers or companies that quote the buy and sell price of securities and then profit from the difference in the bid-ask spread.

All investing subs: CRIME

Subprime Mortgage Crisis
Paulson became world-famous in 2007 by shorting the US housing market, as he foresaw the subprime mortgage crisis and bet against mortgage-backed securities by investing in credit default swaps. Sometimes referred to as the greatest trade in history, Paulson's firm made a fortune and he earned over $4 billion personally on this trade alone.[citation needed]

Paulson convinced Goldman Sachs to market risky home loans in Arizona, California, Florida and Nevada as safe investments. Together, Paulson and Goldman created the Abacus 2007-AC1 investment vehicle and kept Paulson's bet against the underlying assets from people who purchased it. Paulson escaped indictment because his firm maintained that it was always transparent about its view of the mortgages that had been securitized. Goldman was sued by the Securities and Exchange Commission and had to reach a settlement for their lies about Abacus.[17][18] On July 15, 2010, Goldman settled out of court, agreeing to pay the SEC and investors US$550 million, including $300 million to the U.S. government and $250 million to investors, one of the largest penalties ever paid by a Wall Street firm.[19]

John Paulson explained his famous bet against the US housing bubble in a recent episode of Finanze, a podcast hosted by Logan Lin, a 17-year-old student at a California high school.
The billionaire investor who converted his Paulson & Co hedge fund into a family office last year detailed how he anticipated the housing market's collapse, shorted about $25 billion of securities, and scored a $15 billion windfall. His wager was immortalized in the book "The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History."
Paulson discussed shorting a slew of Wall Street banks, mortgage lenders, and credit-rating agencies during the mid-2000s housing boom. He also touched on his philanthropic pursuits, and offered some advice for young people choosing a career.
Here are Paulson's 11 best quotes from the interview, lightly edited and condensed for clarity:
1. "The underwriting standards just plummeted. The mortgage terms were so ludicrous that a borrower with no credit history, a horrible credit rating, a history of never paying money back, and no cash to put down could borrow 110% of the purchase price of a house. You could actually buy a house with no money down, and get 10% of the purchase price in your pocket, as crazy as that may sound."
2. "It got to a point where the subprime-mortgage lenders would say, 'No credit, no money, no cash, no problem.'"
3. "It was like a very simple physics problem. If house-price growth kept slowing and went negative, and loan delinquencies kept rising, at some point the mortgage market would collapse and these mortgage-backed securities would sustain losses."
4. "It wasn't a crapshoot for us. We understood the trends of the mortgage market so well that we could almost predict with a degree of precision when the market would default."
5. "Even though the underlying fundamentals were deteriorating, the market pricing didn't adjust. It was an incredible opportunity to buy protection at very low cost, when it seemed obvious to us that these securities would default."
6. "The problem was the machinery, the factories that were just geared up to buy mortgages, securitize them, and sell them. The lenders were just oblivious to what was going on and they couldn't stop the machine."
7. "We only shorted the BBB tranche, where a loss of 7% would mean those securities would be extinguished. We predicted the losses on these pools would be in the 20% range, so those things were toast in our opinion."
8. "It was a very, very skewed trade where you lost a very small amount if it didn't work, but you made a fortune if it worked. That's why it's called the greatest trade ever. We got both the security and the timing right and were able to make that 100-to-one return."
9. "We focused on the institutions that had large quantities of subprime or poorly performing mortgages. We shorted New Century, Fannie Mae, Freddie Mac, Citibank, Washington Mutual, IndyMac, Bear Stearns, Lehman Brothers, and we were 100% right."
10. "Americans are a philanthropic people and we care about the wellbeing of other citizens. I grew up in a family where we weren't wealthy, but we always contributed to causes. As a child on Halloween, I used to trick-or-treat for UNICEF, rather than for candy."
11. "It's hard to be successful doing something you don't want to do. Maybe you wanna make movies, or maybe you're an artist, or maybe you like medicine, or science, or physics, or math. Ask yourself, 'What do I love doing? What would I do if I wasn't working? What am I passionate about?" that's the area that you should pursue a career in."

* Paulson not charged

The case also involves John Paulson, a hedge fund investor whose firm Paulson & Co made billions of dollars by betting the nations housing market would crash. This included an estimated $1 billion from the transaction detailed in the lawsuit, which the SEC said cost other investors more than $1 billion. Paulson was not charged.

According to the SEC, Goldman did not tell investors vital information about ABACUS, including that Paulson & Co was involved in choosing which securities would be part of the portfolio.

The SEC also alleged that Paulson took a short position against the CDO in a bet that its value would fall.

Robert Khuzami, head of the SECs enforcement division, said John Paulson was not charged because it was Goldman that made misrepresentations to investors, not Paulson.

I misread the topic title and thought that Ken Griffey Jr had a citadel that made a ton of money.

I misread the topic title and thought that Ken Griffey Jr had a citadel that made a ton of money.

Im not surprised people kept making topics laughing at Telsa stock tanking. Not thinking on the flip side people shorting were getting rich off the crash.

Steve Cohen's Point72 and Ken Griffin's Citadel are investing $2.75 billion in Melvin Capital.
Melvin is down about 30% this year as its short positions are getting hammered.
Day traders have bid up the stock prices of GameStop, Bed Bath & Beyond, and other popular shorts.

A pair of billionaire investors are swooping in to support a short-selling hedge fund in its battle against an army of irreverent day traders.
Steve Cohen's Point 72, Ken Griffin's Citadel, and other partners are plowing a total of $2.75 billion into Melvin Capital, the hedge funds said on Monday. They will receive non-controlling revenue shares in Melvin in return for their money.
Melvin will welcome the cash injection as painful short bets have left it down 30% year-to-date as of Friday, The Wall Street Journal reported.
Scores of retail investors, including some members of Reddit forum r/wallstreetbets, have targeted heavily shorted stocks in recent weeks. They drove GameStop's stock price up as much as 145% on Monday, Bed Bath & Beyond up 58%, BlackBerry up 48%, and AMC up 39%.
Melvin takes more negative positions than most of its Wall Street rivals, exposing it to potentially heavy losses. It owned "puts" bets that a stock price will fall on 17 US-listed companies including GameStop and Bed Bath & Beyond at the end of September.
The firm's strategy has paid off in the past. Melvin has returned an average of 30% annually since its founding in 2014, and had grown its assets under management to $12.5 billion at the start of this year, The Journal said.
Gabe Plotkin, a former star portfolio manager at Cohen's SAC Capital, quit to start Melvin in 2014. He counted Cohen as a day-one backer.

Who cares about the other guy. Why keep
bringing that up?

He held the record till now.

Why would you not care about that?

You're diluting your message.

He held the record till now.

Why would you not care about that?

And we see how he held that record.

Consider it like the last guy in baseball who held the record was a notorious steroid user.

Now the new guy breaks his record but does the new guy use steroids?

hmm?

@whitelytning

Except instead of using steroids he shorted an industry. So what?

In Kens case payment for order flow is sketchy and unfair but legal. Change the law if you dont like.

Its just seems like jealousy that the dude made a bunch of money.

I misread the topic title and thought that Ken Griffey Jr had a citadel that made a ton of money.

I misread the topic title and thought that Ken Griffey Jr had a citadel that made a ton of money.

making this sort of insane profits during a recession and Americans get their jobs cut is crazy to me, Capitalism is messed up.

Ken's pulling SBF/Bernie Madoff numbers here. How long until the music stops?