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Citadel Investment Group LLC, the $12 billion Chicago hedge fund, says it continues to enjoy a successful year and isn’t suffering from big energy bets gone bad — despite speculation coursing through financial markets today that the firm is dealing with heavy losses.

“We are aware of the rumors. They are completely unfounded,” says Bryan Locke, a spokesman for Citadel.

Mr. Locke wouldn’t give details about the firm’s performance this year. However, an investor in Citadel said the firm remains up about 20% so far this year, despite sharp price declines in the energy markets in recent days. Citadel’s returns are better than major stock market measures this year.


Denial's not just a river in Chicago. When people deny things you have to ask: well, wouldn't they say that anyway? Cynicism is usually a safe posture whenever someone in the financial community denies something that might not reflect well on them. In this case, however, the denial is so public and concrete that it seems likely to be accurate. It's linked to a specific spokesperson and in the Journal--not the way you issue a phony denial. Too much credibility on the line.

So you can probably cross Citadel off the list. But that doesn't mean the rumors are entirely wrong. There are other hedge funds out there who may be in trouble. It wasn't long ago that, for instance, Vega Asset Management had to issue a letter to investors reassuring them that the fund was in good health. Anyone spoken to Vega about today's rumors? We tried calling earlier but haven't reached anyone yet.

Citadel: Rumors Unfounded [Wall Street Journal]

Citadel: Rumors Unfounded
Posted by David Gaffen
Gregory Zuckerman has this report on something MarketBeat alluded to earlier in the day — rumors of a hedge fund in trouble.

Citadel Investment Group LLC, the $12 billion Chicago hedge fund, says it continues to enjoy a successful year and isn’t suffering from big energy bets gone bad — despite speculation coursing through financial markets today that the firm is dealing with heavy losses.

“We are aware of the rumors. They are completely unfounded,” says Bryan Locke, a spokesman for Citadel.

Mr. Locke wouldn’t give details about the firm’s performance this year. However, an investor in Citadel said the firm remains up about 20% so far this year, despite sharp price declines in the energy markets in recent days. Citadel’s returns are better than major stock market measures this year.

In early September, Citadel, which does everything from market making in options to energy trading, teamed up with J.P. Morgan Chase & Co. to puchase the energy portfolio of struggling Amaranth Advisors.

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