Mike Blake/Reuters
- Citadel is having a good year, with its flagship fund Wellington up about 9%, Bloomberg reported.
- The gains have largely been fueled by the capital-markets firm's commodities bets.
- The strong performance follows Citadel's record profits of $16 billion last year.
Billionaire Ken Griffin's hedge fund Citadel is notching up another strong year.
Wellington, the $59 billion powerhouse's multi-strategy flagship fund, is up about 9% since the start of January after gaining 1.3% last month, a person familiar with the matter told Bloomberg.
The booming performance is largely due to Citadel's commodities bets. As part of its core investments, the capital-markets firm has reaped big gains from its commodities trades. They produced returns of about $8 billion last year – roughly half of the firm's overall profits.
Citadel hired a team of scientists to help it execute commodities trades.
Energy trading has proved lucrative as prices of crude oil, refined products, and natural gas have spiked following Russia's invasion with Ukraine early last year.
Citadel's strong numbers build on 2022's record profits of $16 billion for investors.
The Chicago-based fund delivered a 38.1% return on its main hedge fund, surpassing the roughly $15.6 billion investor John Paulson made in 2007 – classed as the "greatest trade ever" at the time.
It also helps offset a 35% plunge in trading revenue for Citadel during the first half of this year amid a decline in market volatility.