Hedge fund Citadel expects to return $7 bln in profits to clients - source

2022 Milken Institute Global Conference
Citadel CEO Ken Griffin speaks at the 2022 Milken Institute Global Conference in Beverly Hills, California, U.S., May 2, 2022. REUTERS/Mike Blake/File Photo

Dec 21 (Reuters) - Hedge fund Citadel expects to return about $7 billion in profits to its investors in the first week of January after a stellar performance this year, a source familiar with the matter said.

Reuters reported this month that this year was shaping up to be one of Citadel's best years in terms of performance. The hedge fund firm, which manages $59 billion in assets, told investors its flagship Wellington fund returned roughly 32% through the end of November.

Citadel, founded by billionaire investor Ken Griffin, did not immediately respond to a Reuters request for comment.

This is not the first time Citadel has returned money to its investors, but this will be the largest amount of profit returned in a single year. It has returned more than $11 billion in the last five years as it is more focused on performance, not on capital growth, the source said. The Wall Street Journal first reported the expected capital return earlier on Wednesday.

While fears of interest rate hikes and the Russia-Ukraine war weighed on capital markets throughout 2022, leaving the benchmark S&P 500 (.SPX) down about 20%, hedge funds have weathered the downturn better on average. Still, they are down 4.11%, according to data provider HFR.

Reporting by Carolina Mandl, in New York. Additional reporting by Manya Saini in Bengaluru; Editing by Shailesh Kuber and Josie Kao

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