Funds News

Ex-Fed chair Bernanke joins hedge fund Citadel as advisor

BOSTON, April 16 (Reuters) - Ben Bernanke, the former Federal Reserve chairman and one of the world’s most closely watched economic thinkers, is joining one of the most successful hedge funds as an advisor, Citadel LLC said in a statement on Thursday.

Bernanke, who retired from the U.S. central bank in 2014 after eight years at its helm, will advise the $25 billion hedge fund’s teams plus its investors on developments in monetary policy, financial markets and the global economy.

“Citadel is a dynamic firm with tremendously talented people and a rigorous approach to research and investing. I look forward to adding my perspective on a range of issues affecting our global economy,” Bernanke said in the statement.

Bernanke is the latest top central banker to join the hedge fund industry as an advisor, and his hiring underscores how eager top investors are for a read on when the Federal Reserve will tighten monetary policy again following years of easy money policies aimed at boosting growth after the financial crisis.

Bernanke will continue to be a fellow at the Brookings Economic Studies Program.

Last month former Federal Reserve Board governor Jeremy Stein joined BlueMountain as an advisor and Bernanke’s predecessor as Fed chair, Alan Greenspan, has worked with Paulson & Co as an advisor.

Shortly after Bernanke stepped down from his position at the Federal Reserve early last year, he began meeting with hedge fund managers, including David Einhorn, David Tepper and Michael Novogratz, at private dinners and large meetings around the world. Some of them acknowledged they didn’t always use the information they got well.

Citadel, founded by billionaire Kenneth Griffin, has roared back after its main funds lost roughly 50 percent during the financial crisis.

In the first three months of 2015, the firm’s Kensington and Wellington funds gained 6.85 percent, handily beating the average hedge fund’s 2.4 percent gain and the broader stock market’s gain. Last year the funds gained 18 percent and have returned an average 20 percent every year since being launched.

Griffin laid the groundwork for Citadel when he began trading from his Harvard University dormitory, and he gave his alma mater a $150 million gift last year to mark his 25th reunion. Bernanke also received his undergraduate degree from Harvard. (Editing by Ted Botha)