Citadel has unwound more than 80% of the risk tied to the portfolio it acquired from Leopold Aschenbrenner’s Situational Awareness, founder Ken Griffin told clients in a letter Friday, his first public accounting of a transaction that closed at speed last month.
The letter also disclosed that Citadel’s flagship multistrategy fund finished July up 5.9%, among its strongest monthly showings since 2022.
The disclosure closes the loop on one of the more unusual unwinds in recent hedge-fund history: the rapid transfer of a concentrated artificial-intelligence book from a fund run by a 25-year-old to the largest multistrategy platform in the industry. How much of July’s gain, if any, traces to the acquired positions wasn’t specified in the letter.
“A transaction of this magnitude could not have been completed without the extraordinary cooperation of the trading and prime brokerage teams at the banks serving both firms,” Mr. Griffin wrote. “I am grateful for the focused effort they brought to the rapid transfer of the portfolio.”
Situational Awareness had built its book around Mr. Aschenbrenner’s thesis that AI would reorder the global economy, concentrating capital in the trade rather than diversifying across it. The fund paired those positions with shorts in software companies, wagering against a sector many investors expect AI to disrupt.
That construction—concentrated longs against a levered short book—is what made the portfolio difficult to move in ordinary course, and what made the involvement of both firms’ prime brokers central to Mr. Griffin’s account of the deal.
