Citadel to close Aptigon stock unit, Felder leaves: sources

BOSTON (Reuters) - Citadel, one of the world’s biggest hedge funds, on Thursday told investors and employees that it plans to shut down its Aptigon Capital equities unit two years after launching it.

Citadel, which oversees $29 billion in assets, said it was parting ways with the unit’s chief, Eric Felder.

Previously a senior managing director, Felder had been in charge at Aptigon for only a year, having been tapped to run the business after his predecessor, Richard Schimel, left.

Exactly a year ago, Citadel cut roughly one-third of Aptigon’s staff, adding to uncertainty at the unit. Over the following months a number of employees, including a trader and portfolio manager, who had survived the layoffs, moved to other hedge funds.

In January Citadel folded its Fundamental Strategies business, also led by Felder, into Aptigon and Global Credit, two other businesses headed by Felder.

Citadel told investors on Thursday that credit portfolio managers and their teams who worked with Felder will now report to Ken Griffin, Citadel’s founder, until a Global Head of Credit is named, according to a note seen by Reuters.

A Citadel spokesman declined to comment.

Citadel said it plans to move Aptigon’s best-performing equity portfolio managers and their teams to its other three equities businesses, Citadel Global Equities, Surveyor Capital and Ashler Capital.

Some people will lose their jobs but it was not immediately clear how many positions will be eliminated, the sources said.

Aptigon managed money for Citadel’s main multi-strategy Kensington and Wellington funds, which returned 4.55 percent in the first two months of 2019 and were up 9.1 percent last year.

Two years ago Citadel announced plans to launch Aptigon, illustrating its commitment to a sector where it had been expanding dramatically.

At the time, Citadel spent millions of dollars to lure portfolio managers from prominent firms to Aptigon. Griffin signed off on all of the hires, including about 17 portfolio managers who came from rival Visium Asset Management, which was shutting down.

By the time of last year’s Aptigon firings, Citadel management was unhappy with performance. But some sources who worked at Aptigon said they had had little time to put money to work and described the layoffs as a surprise.

Reporting by Svea Herbst-Bayliss; Editing by Chizu Nomiyama and Dan Grebler