AI-focused hedge fund Situational Awareness has resumed deploying capital just days after surviving a liquidity crisis that forced it to sell most of its public equity portfolio, according to a report by Bloomberg.
The firm has made a further $400m investment into one of its existing private portfolio companies.
The report cites unnamed people familiar with the matter as revealing that the investment was completed on Tuesday and follows a separate $100m commitment the firm made to the same privately held company last month. The identity of the portfolio company has not been disclosed.
The investment marks the first significant transaction by founder Leopold Aschenbrenner since his fund came close to collapse following a wave of margin calls triggered by the sharp decline in AI-related equities.
Last week’s turmoil saw Situational Awareness scramble to raise liquidity as lenders demanded additional collateral against its leveraged public equity positions. The crisis culminated in the sale of the bulk of the firm’s listed stock portfolio to Citadel, allowing the fund to repay financing counterparties while retaining its portfolio of private technology investments.
Although the transaction stabilised the business, assets under management reportedly fell from around $45bn at the start of July to approximately $10bn following the selloff and market losses.
In a letter to investors, Aschenbrenner acknowledged the severity of the events and said the experience would reshape the firm’s risk management approach.
Despite the dramatic drawdown, there has been little indication that investors have rushed to redeem capital. The firm’s investor base is understood to consist largely of wealthy individuals and family offices rather than large institutional allocators, a structure that may have helped reduce redemption pressure during the crisis.
Aschenbrenner has also begun engaging directly with investors through a series of one-to-one calls aimed at addressing concerns and outlining the firm’s recovery plans.
