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2009 has proved so far to be a bumper year for hedge funds -- not least due to a huge rebound in the price of most assets -- helping eradicate at least some of the bad memories of last year.

Citadel's Kenneth Griffin has been a case in point.

An article in today's Wall Street Journal (which dubs him a 'titan' and a 'hedge fund king'), says Citadel made $5 billion in trading profits in the first nine months of this year as markets recovered.

This comes after what the WSJ says was an $8 billion loss of clients' money last year.

Until 2008, and like many top funds, Griffin was turning investors away. Those in the fund paid 20 percent of profits plus commonly 4 to 8 percent of assets, the article says.

Griffin now has plenty of new ideas -- he is launching four new funds and expanding into investment banking to plug the gap left by Lehman -- but he is now cold-calling investors to raise money.

How times have changed.

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Nov 19, 2009 03:23 EST

Cecilia Valente

from Funds Hub:

Morning Line-up

Hedge fund stories from the past 24 hours from Reuters and elsewhere:

Citadel's Griffin rebounds from $8 bln losses - Reuters

Convertible arbitrage rode out poor stock market - Hedge Funds Review

Competition for hedge fund support shakes prime broker ranks - Reuters

John Paulson to launch gold fund - WSJ

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Oct 30, 2009 04:34 EDT

Raji Menon

from Funds Hub:

Morning Line-up

Hedge fund stories from the past 24 hours from Reuters and elsewhere:

Barclays faces 130 mln stg loss from K1 'fraud' - Times

Galleon fears raised in 2001 - FT

Citadel opens its 'gates' - WSJ

Och-Ziff buyer of TPG's Debenham stake - Reuters

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Oct 8, 2009 03:14 EDT

Laurence Fletcher

from Funds Hub:

Morning line-up

Hedge fund stories from the past 24 hours from Reuters and elsewhere:

Conservatives' Clarke tries to appease hedge funds over new rules - Times

Hedge fund firm NewSmith pays members 29 mln stg in 2008 - Reuters

Fund manager pleads guilty in Ponzi case - Chicago Tribune

Citadel's main hedge funds continue rally in September - WSJ

Despite '08 pain, the rich still like hedge funds - Reuters

Frontier backs synthetic over single hedge funds - FTAdviser

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Oct 2, 2009 09:37 EDT

Matthew Goldstein

from Commentaries:

HFT and big dollars

Citadel | Goldman Sachs | High-Frequency Trading | profits | sergey aleynikov and secret sauce

There's more evidence today about the big profitability of computer-driven high-frequency trading.

The Wall Street Journal says Ken Griffin's Citadel Investment Group hedge fund empire made $1 billion from proprietary trading with HFT last year. The profitability number came out during testimony in an ongoing lawsuit Citadel has filed against a group of former HFT employees who left to start their own firm.

This is the same upstart firm that alleged Goldman Sachs HFT computer code thief Sergey Aleynikov had gone to work for before being nabbed July 4 weekend at Newark Liberty Airport. Aleynikov, who has pleaded not guilty and is trying to work out a plea deal, is set to be in court again on Oct. 16.

What's worth remembering is this $1 billion figure is just the money raked in by Citadel's prop trading HFT business. It doesn't include the dollars Griffin's empire takes in from market making--a business that's also driving by HFT computer programs.

None of this is really a surprise given the way big HFT players like Goldman and Citadel have gone to protect the secret sauce of their lightening fast trading platforms.

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Oct 2, 2009

1:16 pm EDT

Thanks once again for blowing HFT / Aleynikov open in July. Seeing that we’re talking about a zero-sum game here, those winnings have got to be the substantial losings of retail and institutional investors. It’s obscene that pensions and hospital endowments are fueling this idiocy, and more obscene that good people like Misha and Serge have been diverted away from socially useful work.

Posted by John McLeod | Report as abusive

Sep 17, 2009 03:06 EDT

Joel Dimmock