Chicago-based Citadel’s main multistrategy fund posted a sizable gain in December, finishing the year comfortably in positive territory.
Even so, the fund posted its smallest gain in eight years. However, it still stacks up better than most of the other hedge funds that deploy a similar strategy.
Specifically, Citadel’s Wellington fund rose 1.86 percent in December, bringing its total gain for the year to 5.06 percent. This is a 14-percentage-point swing from its nearly 9 percent loss suffered sometime during the first quarter.
December results were driven by all four of Citadel’s equities businesses, but especially by Citadel’s Global Equities and Surveyor Capital equity businesses, according to people familiar with the firm. The fund also enjoyed gains from fixed income, credit and commodities. Full-year results were led by fixed income, credit, commodities, and quantitative strategies.
Citadel Tactical Trading, which specializes in equities and some statistical arbitrage, rose 0.72 percent last month and returned 2.62 percent for the year. December gains were led by all four equity strategies, primarily global equities and Surveyor.
For the year, the Citadel Global Equities Fund was slightly negative. The star of the Citadel show last year was the Citadel Global Fixed Income Fund. It finished up the year with a 12.39 percent return.
Citadel successfully took advantage of several significant market-moving events last year. They include the June Brexit vote, interest rate changes in the U.S. and U.K., and the reversal in rates following the November elections in the U.S.
While Wellington’s performance came up far short of its peer, Elliott Associates (managed by Paul Singer’s Elliott Management Corp.), it stacks up well against most of its other larger multistrategy competitors.
For example, Donald Sussman’s Paloma Partners posted a 4.9 percent gain last year. Its strategy is somewhat different from many other multi-strategy funds. Its largest focus tends to be quantitative strategies and credit relative value. It manages about $5.5 billion.
At least three major multi-strategy funds posted gains between 3 percent and 4 percent: Millennium Management’s Millennium International, Brevan Howard’s Brevan Howard Fund and Och-Ziff Capital Management’s OZ Master Fund. Millennium recently suffered the departure of one of its key people: Michael Gelband, who had joined the New York firm in October 2008 as global head of fixed income from Lehman after the investment bank collapsed amid the financial crisis. He is said to have left the firm amicably and is trying to decide what to do next with his career.
Meanwhile, Pine River Capital Management’s Pine River Fund, which manages about $1.7 billion, gained just 1.36 percent last year.
Some funds also finished the year with losses. They include QVT Financial’s QVT Offshore, which fell nearly 5 percent last year.
And two of Balyasny Asset Management’s funds finished in negative territory. The firm’s Atlas Enhanced Fund was down less than 1 percent, while Atlas Global Investments lost 1.5 percent.
