Citadel hedge funds soar in 2012


Citadel surprised some over the years for its ambitious attempt to muscle its way into trading and investment banking, competing directly with the bulge-bracket brokers.

By 2011, however, such ambitions were thwarted and the bank was forced to exit the stock research and investment banking arenas, leaving it to focus on market making and electronic trading. In the end, it's important to remember that the core competency of the firm remains hedge funds. And the news in 2012 was scintillating.

The Financial Times reports that Citadel CEO has "trumpeted" to limited partners the performances of the flagship Wellington and Kensington funds, which generated returns of 25.9 percent and 24.9 percent for 2012. The performances were extra sweet because they follow another good year, helping to erase the effects of the massive losses in the financial crisis.

  "The global economic landscape continues to be awash in certainty," said Mr Griffin in his letter. "This environment demands that we carefully balance our aggressive pursuit of gains with the protection and preservation of investment capital during periods of market turmoil."

He set out three priorities for 2013: "to be highly profitable, to improve our productivity and to strengthen our teams."

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