Citadel portfolios gain in March despite banking crisis (updated)

Citadel Income Fund

04/04/2023 15:54

(Adds details on Citadel, background on banking crisis)
    By Svea Herbst-Bayliss
       NEW YORK, April 4 (Reuters) - 
    U.S. hedge fund Citadel, which earned a record $16 billion
profit in 2022, reported gains in its four portfolios last month
when the failure of Silicon Valley Bank and Signature Bank
triggered a market selloff that left many rivals with losses.
    The Citadel Wellington fund, the firm's flagship portfolio,
ended the month with a 1.38% gain, leaving it up 4.19% for the
first quarter, an investor in the fund said.
        A Citadel representative declined to comment.
        Most hedge funds are still compiling March and
first-quarter numbers, but preliminary reports from research
firm Hedge Fund Research show the average hedge fund was off 1%
last month and ended the first quarter flat.
        Macro and trend-following hedge funds dropped 3.2% this
month through March 29, while algorithmic commodity trading
advisor funds (CTAs) dove 6.8%. Those funds are down 2.7% and 6%
for the year through March 29, respectively, investors and
research groups reported.
        Funds like Citadel that pursue a number of investment
strategies fared better, investors and data suggest.
        Citadel's Tactical Trading fund gained 2.18% last month
and is up 5.46% in the first quarter, while its Equities fund
climbed 2.16% last month and is up 4.56% in the first three
months of 2023. The Global Fixed Income fund reportedly was flat
in March and gained 1.77% in the first quarter, the investor
said. 
        Point72 Asset Management, another multi-strategy fund,
gained 1.33% in March and is up 2.85% for the year, another
investor said. Millennium International was off 0.15% in March
and is up roughly 0.4 pct in the first quarter, a third investor
said.
        Representatives for the funds declined to comment.
    Investors in March were spooked by the failure of the SVB
and Signature Bank, which triggered a broader crisis among
regional banks as rattled customers tried to pull out money.
Citadel was among a number of large investors that swooped in to
buy shares in the smaller banks and send a signal of confidence.
        The broader stock market recovered in the second half of
March, with the S&P 500  .SPX  ending the month with a 3.5%
gain, pulled higher by Apple and Microsoft. The S&P 500 ended
the first quarter with a 7.1% gain.

 (Reporting by Svea Herbst-Bayliss; additional reporting by Nell
Mackenzie and Carolina Mandl. Editing by Paul Simao)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))