Billionaire investor Ken Griffin’s Citadel has unwound more than 80% of the aggregate risk from the portfolio it acquired from Leopold Aschenbrenner’s Situational Awareness, a letter to investors revealed on Friday.
Citadel completed nearly 100 block trades totaling over $4 billion in market value to trim the risk from the portfolio, which it purchased last month after Situational Awareness faced heavy losses in its tech holdings. The firm declined to comment on the transactions.
In the letter, Griffin emphasized the scale and speed of the portfolio transfer, stating that the moves included the largest intraday block trades of the year in 10 different names. He also expressed gratitude to the trading and prime brokerage teams at banks serving both firms for their cooperation in facilitating the rapid transfer.
Situational Awareness, an AI-focused hedge fund run by the former OpenAI researcher Aschenbrenner, sold the bulk of its stock bets to Citadel after steep declines forced it to unwind most of its public equities portfolio. The fund’s losses in tech holdings were a key factor in the decision to sell, according to reports from late July.
Citadel, which manages approximately $77 billion in assets, has a reputation for capitalizing on market dislocations. Griffin and his team reportedly analyzed the trading book positions of Situational Awareness to assess liquidity before finalizing the deal. The firm’s flagship multi-strategy fund, Citadel Wellington, gained 5.94% in July, bringing its year-to-date performance to 12%.
The transactions mark one of the largest portfolio transfers in recent years, reflecting Citadel’s strategy of absorbing distressed assets during periods of market stress. The rapid unwinding of risk underscores the firm’s ability to execute large-scale trades efficiently while managing systemic exposure.