Citadel Investment Group is an international financial institution based in Chicago, Illinois. Founded in 1990 by trader Kenneth C. Griffin, the firm today deploys investment capital across multiple asset classes and strategies. Current activities include equity options market-making, hedge fund administration and a multi-manager investment strategy that deploys capital with unaffiliated managers.

Activities

It should be noted that it has not been possible to verify numbers in this Wikipedia article since many of these are not released by Citadel as a matter of commercial policy. Capital markets are dynamic and staffing structures and market shares change over time.

With over $15B in assets under management (AUM), the firm remains one of the world's largest hedge fund managers and its daily trading volume amounts to approximately 3 percent of average daily trading activity in London, New York, Hong Kong and San Francisco. Additionally Citadel's capital markets businesses execute and route more than 30 percent of average US listed equity options trading volume and more than 8 percent of average NASDAQ and NYSE equities volume. Although Citadel employs over 1,400 individuals globally, its flagship operation is located in the Citadel Center a $355 M office tower in the heart of downtown Chicago; in 2006 the tower was purchased for $560 M by Robert Gans. Citadel also has offices in New York, Hong Kong, San Francisco, and London Of the 100 largest hedge funds, Citadel's is the only based in Chicago. Citadel is the eleventh largest hedge fund manager in the world ; it is also the second largest multi-strategy hedge fund manager in the world.

In promotional material, Mr. Griffin states that Citadel's technology capabilities “gives us a substantial competitive advantage in the market place …and that's why, when Amaranth needs a partner or Sowood needs a solution or E*TRADE needs capital infusion or the investment banks have a large risk transference trade to do, they come to Citadel.”

Fees

An April 2005 Bloomberg news article noted that David Shaw's D.E. Shaw & Co., which then had $14.7 billion in assets under management, and Tudor Investment both had less than half as many employees as Citadel does. It stated that unlike most other hedge funds where investors are charged a flat management fee of 1-2 percent of assets and 20 percent of profits, with Citadel investors bearing the entire cost of running the company charging investors a bill that historically has equaled 3-6 percent of assets for the computer systems and larger- than-average staff. Morgan Creeks' Yusko was quoted as saying "Their expense structure is high compared with others. Ultimately, we overlooked it because their returns were so high." However, in 2008, Citadel “gave back about $300 million in fees it had collected during money-losing months”.