Multi-strategy hedge fund major Citadel recently offered its investors the option to cash out profits following a 15.1% gain in its flagship Wellington fund in 2024, but most opted to leave their capital invested in the fund, according to a report by Bloomberg.
The report cites an unnamed sources familiar with the matter as revealing that out of the billions of dollars in profits Citadel generated last year, only about $300m is being withdrawn. This marks a departure from past practices when profit distributions were mandatory rather than optional.
The move to make profit withdrawals optional highlights the increasing scarcity of opportunities for investors to access top-performing hedge funds. With many high-demand funds no longer accepting new capital – and some returning money to clients – investors are eager to maintain their allocations with established firms like Citadel.
A Citadel representative declined to comment.
Citadel, which manages $66bn in assets, has returned a total of $25bn in profits to clients since 2017. The firm’s founder, Ken Griffin, noted in a recent interview that the trend of returning capital has fuelled the growth of multi-strategy hedge funds, which employ teams of traders and diverse investment approaches to deliver steady returns.
