Citadel buys $5.5 billion Situational Awareness portfolio

Billionaire investor Ken Griffin's hedge fund, Citadel, has stepped in to acquire a significant portion of the public stock portfolio from the struggling hedge fund Situational Awareness, founded by former OpenAI researcher Leopold Aschenbrenner. The transaction, finalized this week, came after Situational Awareness suffered steep losses during a broad selloff in artificial intelligence-linked stocks in July.

According to reports, the fund's portfolio lost approximately 67% of its value last month, forcing it to unwind most of its public equities book. The exact size of the portfolio acquired by Citadel was not disclosed, though one report indicated it was roughly $5.5 billion. Situational Awareness reportedly retains about $10 billion in assets, including private investments such as its stake in AI company Anthropic.

The deal followed a period of intense market stress for the fund. A letter from Aschenbrenner to investors, seen by Reuters, stated, "We let you down." Reports indicated the fund faced liquidity pressure, including the need to meet margin calls from lenders. In one instance, the fund had agreed to sell $3.5 billion of Anthropic shares to a consortium led by...