Major banks ask Citadel to post more collateral: report

(Reuters) - Citadel Investment Group, one of the largest hedge funds, is being asked by several major banks to post additional collateral to cover big losses on its investments, the Wall Street Journal said, citing people familiar with the situation.

Citadel has fallen nearly 40 percent this year, prompting the firm to hold conversations with lenders, including Goldman Sachs Group Inc (GS.N) Deutsche Bank AG (DBKGn.DE) and Merrill Lynch & Co MER.N, that finance its trades, the paper said.

Citadel executives said the calls for more cash are a normal part of business when securities they hold fall in value and emphasized that they have significant amounts of cash to satisfy their lenders, according to the paper.

The executives said they have met all the demands for collateral, according to the paper.

Goldman Sachs told the paper it was doing business with Citadel as usual, while Deutsche Bank was cited as saying its relationship with the hedge fund group was "business as usual."

Citadel manages roughly $18 billion. The firm's main Kensington and Wellington funds have lost 35 percent this year.

Citadel could not be immediately reached for comment by Reuters.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by David Cowell and Steve Orlofsky)