Citadel unwinds 80% of Aschenbrenner’s portfolio risk - report

Investing.com -- Citadel has unwound more than 80% of the risk from the portfolio it acquired from Leopold Aschenbrenner's Situational Awareness hedge fund, CNBC reported on Friday citing an internal letter to clients by Citadel's head Ken Griffin.

Griffin said Citadel completed more than 100 block trades worth over $4 billion in market value to reduce the exposure from the original holdings purchased from the AI-focused fund.

The letter reportedly viewed by CNBC revealed that Citadel began talks with Situational Awareness to acquire some of the fund's holdings on July 29. CNBC's David Faber reported one day later that Situational Awareness was forced to sell all of its public stock positions after facing steep losses. Citadel was later identified as the buyer.

Griffin wrote that completing a transaction of this size required cooperation from the trading and prime brokerage teams at the banks serving both firms. He expressed gratitude for the focused effort they brought to the rapid transfer of the portfolio.

The Citadel founder also confirmed that the firm's flagship multistrategy Wellington fund returned 5.94% in July, marking the fund's best monthly performance since 2022.

Situational Awareness, founded by former OpenAI researcher Leopold Aschenbrenner, lost about 67% in July after highly concentrated, leveraged bets on AI-related stocks reversed. The fund had reportedly gained 439% in the first half of 2026 before holdings including SanDisk and Micron plunged, forcing it to rapidly unwind positions.

Citadel took over billions of dollars of assets as Situational Awareness sought liquidity and reduced leverage. The fund retained some private investments, such as a stake in Anthropic, rather than shutting down entirely.

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