Can Citadel really weather this storm? Citadel Shuts overseas offices…

Is Citadel finished?

Dec. 8 (Bloomberg) -- Citadel Investment Group LLC, the hedge-fund manager founded by Kenneth Griffin, will close its Tokyo office and cut other Asian operations, eliminating 37 jobs less than a year after adding people in the region.

The layoffs, which affect more than half of Citadel's employees in Asia, include dismantling the team that invested the firm's own money in companies going through events such as takeovers and spinoffs. Its remaining Asian businesses will be run from Hong Kong, Katie Spring, a spokeswoman for the Chicago- based firm, said today.

Griffin had ramped up the Asian unit in April, hiring Nick Taylor from Credit Suisse Group AG for a new position as head of principal investments for Asia and Europe. David Noh was brought in from Merrill Lynch & Co. as head of Asian merchant banking. Citadel, whose two largest funds have slumped 47 percent this year, said in October that it will wind down a $1 billion fund that invests with other managers.

"Even the funds that are doing well are cutting people, so those that are suffering, they are going to cut costs -- it's industrywide at the moment," said Angus McKinnon, senior partner at Tozai Investment Advisory Ltd., a Tokyo-based hedge- fund adviser. "I think there is more to come."

Citadel will cut 25 jobs in Hong Kong, leaving 25 to 30 people in the office, while 12 jobs will be eliminated in Tokyo. Citadel employed 1,400 globally, according to an Oct. 20 press release.

Year of Losses

Hedge funds globally are reducing jobs, limiting withdrawals and liquidating funds as a credit crunch and a 46 percent drop in the MSCI World Index in 2008 put them on course for the worst year on record. Hedge funds have lost about 18 percent this year, according to Chicago-based Hedge Fund Research Inc.

The operations to be run out of Hong Kong include stocks, options and foreign-exchange trading, as well as China investments and merchant banking, which holds securities not traded on exchanges for the longer term.

"We continue to evolve the business to focus on the greatest potential opportunities and to scale back where the opportunity set is no longer as attractive," Spring said.

Citadel's two largest funds, Kensington and Wellington, lost 13 percent last month. The funds, which had a combined $10 billion in assets, received demands from investors to withdraw $1 billion by the end of the year, people said.

Griffin, 40, had posted just one losing year since starting the firm in 1990, a 4 percent decline in 1994. The changes in Asia were previously reported by Dow Jones Newswires.

Takeovers Plummet

Today's decision came as bankers at Barclays Capital and Nomura Holdings Inc. said the value of mergers and acquisitions worldwide may decline 30 percent in 2009 to about $2 trillion. Takeovers so far this year are down 36 percent from the same period of 2007, according to data compiled by Bloomberg.

Tim Throsby, Citadel's former Asia head, left last month. Throsby and Taylor declined to comment.

Citadel recruited Taylor from Modal Capital Partners, an internal hedge fund at Credit Suisse Group, earlier this year to expand principal investments in Asia and Europe. He is leaving the company. The hedge-fund manager hired nine people for the business in Asia and Europe in August.

Hedge funds may cut as many as 10,000 jobs this year as they struggle with their biggest losses in almost two decades, New York-based executive search firm Options Group said in October.

Managers including Ramius LLC, a New York-based firm once overseeing $11 billion, London's GSA Capital Partners LLP and Concordia Advisors LLC have cut jobs and offices in Asia to reduce costs.

Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising asset prices, and participate substantially in profits from money invested.

Comments (28)

Dec 20, 2008 - 3:51pm
rndmacnt, what's your opinion? Comment below:

My initial reaction was that it was short-sighted of them to close the entirety of the Tokyo office, but I'm sure Ken Griffin knows far more about the situation than I do.

It's looking really bleak out here.

Dec 20, 2008 - 3:52pm
figowxd, what's your opinion? Comment below:

Hiring Process Frozen at Citadel??? (Originally Posted: 05/15/2013)


    They reached out to me back in March... And there is no more updates. The HR said they are busy with something else and it takes longer than expected....

     Does someone have the insights of what it is going on at Citadel???


Dec 20, 2008 - 3:53pm
bengigi, what's your opinion? Comment below:

They "reached" you out or they reached out to you?

Dec 20, 2008 - 3:54pm
SonnyZH, what's your opinion? Comment below:

You got ding donged.

[quote]The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.[/quote]
  • 1
Dec 20, 2008 - 3:56pm
Amphipathic, what's your opinion? Comment below:

You got ding donged.

They touched his tralala?

Dec 20, 2008 - 3:59pm
WallStreetStandard, what's your opinion? Comment below:

They probably had an opening, the HR tried to bring in candidates, but the hiring manager had his own candidates or they ended up taking somebody internally... Give the HR a call and see whats up with them...

I loved the reply "you got ding donged"- LOL :)

Something similar happened to me with a large portfolio management company in NYC.

Dec 20, 2008 - 4:00pm
figowxd, what's your opinion? Comment below:

thanks, man.

well. HR replied to my emails and said he would have called me the last Friday.

Apparently, he didn't. I guess I will just move on..

is it that the common thing that Hedge Fund accepts the refers from the head-hunters?

Dec 20, 2008 - 4:01pm
SkyfallFox, what's your opinion? Comment below:

Most HFs recruit almost exclusively through headhunters. Unless of course it was a referral from another employee or an internal transfer.

Dec 20, 2008 - 4:02pm
figowxd, what's your opinion? Comment below:

Thanks. SkyfallFox.

Seems like so. I don't trust headhunters much either. will just send a "thank you" .

Again, the recruiting experience of Citadel sucks. Just a phone call from HR and said they will contact me again Which never happened.

Dec 20, 2008 - 4:07pm
Imperial Financier, what's your opinion? Comment below:

Last I heard, I thought they were getting rid of it, no? Griffin has driven away well over half of the (mostly ex-ML) execs that he had brought in to start and run the unit. After all, the guy's not the easiest in the world to work with, I hear.

Dec 20, 2008 - 4:08pm
slammaster, what's your opinion? Comment below:

all the bankers there are headed for the door

can't get any deals done

conflicts all over

Better watch your ass
Dec 20, 2008 - 4:11pm
R. Scott Morris, what's your opinion? Comment below:

Citadel is making some large-scale changes, but they are adding bankers (recently added 50, according to businessweek:

Author of Polished and former CEO of the Boston Options Exchange, Managing Director at Goldman Sachs, and campus,
Dec 20, 2008 - 4:12pm
DurbanDiMangus, what's your opinion? Comment below:

Citadel securities wind down/sale/layoffs (Originally Posted: 08/12/2011)

Citadel Sellside ops (sales trading, research, banking) getting eviscerated as we speak. What a shitshow.

Some real good people there and good hiring opptys imo

Dec 20, 2008 - 4:14pm
LeveragedTiger, what's your opinion? Comment below:

Ken Griffin is an idiot for thinking he could be the next GS.

"The power of accurate observation is commonly called cynicism by those who have not got it." - George Bernard Shaw
Dec 20, 2008 - 4:15pm
booga086, what's your opinion? Comment below:

thoughts on Wells Fargo's acquisition of Citadel bankers? (Originally Posted: 08/15/2011)

Dec 20, 2008 - 4:17pm
booga086, what's your opinion? Comment below:

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