Citadel, the hedge fund run by Ken Griffin, is a profitable business. During 36 years of operation, it’s generated $90bn in profits. But one of its businesses is abnormally profitable: energy and commodities.
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In a long profile of Citadel’s energy and commodities empire, the Financial Times noted yesterday that Citadel’s energy and commodities business has generated at least $30bn of profits (based on comments Griffin made to Yale students six years ago). The FT also noted that Citadel’s energy and commodities business employs just 260 traders, portfolio managers and analysts, who are supported by 100 engineers.
Given that Citadel employs 3,284 people in total according to recent regulatory filings, and that 1,134 of those people are in investment roles, the implication is that 11% of Citadel’s total employees and 23% of its investment staff, have been generating 30% of its profits.
This is impressive. The 11% number in particular, suggests that other business areas of Citadel need comparatively more support from non-investment staff than others. Citadel’s energy and commodities business, which deals in physical commodities, is less susceptible to quantification than the rest. In the words of one former Citadel executive speaking to the FT: “Ken likes to live in a world where everything can be automated and electronified, and that’s not always possible in the commodities world.”
The 360 people who are generating the big profits at Citadel include Seb Barrack, a 50 year-old ex-Macquarie trader, who runs the whole commodities business and who likes climbing mountains. Barrack sounds like a competitive fellow. He says: “Our mission is to have the strongest commodities business in the world. Not part of a hedge fund with a side business in commodities, but a leading participant in every market we touch.” Barrack is supported by the likes of Chris Foster, a 48 year-old Oxford University graduate who generated $2bn in profits trading natural gas in 2022, and who then donated £25m to Mansfield College.
How do you get a job that permits this largesse? The FT suggests that many of Citadel’s energy and commodities hires have come from other businesses that were failing. When Enron collapsed, Citadel hired its best traders. When Amaranth Advisors collapsed, Citadel bought its trading book. When Cumulus, a weather-focused hedge closed, Citadel offered its 20 traders a lifeline. When banks’ prop desks and physical trading businesses disappeared under the weight of regulation, Citadel hired their people too. Now Citadel wants to push into areas like base metals trading and agricultural commodities trading. Barrack says the fund will only enter a business when it can, “hire the right people.” Once this occurs, “we resource and build a team around them,” declares Barrack.
With the ingestion of a lot of right people, Citadel’s energy and commodities business has gone from having 75 people eight years ago to 360 people now. Griffin himself is a fan and is credited with having a “meteorology room” at the fund as far back 2004. The only cloud on the horizon is that Citadel’s energy and commodities business is less profitable now than it was: the FT notes that profits have been “more muted” in 2025 and 2026.
Separately, CFA Institute has expelled the unethical head of marketing in its midst and the number of people interested in its exams has grown.
The latest release of figures for people taking CFA exams, reveals that the number of people taking the CFA 1 exam increased to 31.6k in May, from 24.2k a year earlier. Unfortunately, the rush of new takers didn’t seem very prepared: the CFA 1 pass rate fell to 39% from 45% a year ago. Chris Weise at the Institute told Bloomberg it’s a “demanding” exam. Writing on Reddit, CFA candidates shared sorry tales of blacking out in the exam and losing their jobs on the day they found out they failed.
Meanwhile…
It’s a great year at Goldman Sachs. Equities traders might generate more than $5.3bn in revenues and Asian trading revenues are booming thanks to hedge funds. Rates traders have recovered from their dud quarter. Bankers have advised on $1 trillion of deals so far. (Bloomberg)
Private equity professionals in need of cash have begun borrowing against future carried interest payments. (FT)
Citi hired Greg Dalle from Credit Suisse in 2023 to lead industrials banking. Now he’s going to Barclays instead. (Financial News)
Jump Trading bought a minority stake in Nickel Digital Asset Management. (Bloomberg)
Susquehanna is building out its currency derivatives business in Europe. IMC’s London FX options team is trialling market making in US hours. (Bloomberg)
Ovata Capital, a Hong Kong hedge fund which employed 40 people, is being transplanted into ExodusPoint. (Bloomberg)
Car rental company Avis is receiving $650m from Pentwater Capital Management, with whom its been engaged in a lawsuit after a short squeeze in which Avis shares rose 560% and then fell again. (WSJ)
Perpetual futures (perps) which never expire are growing rapidly in the US market, but could fuel a crash. They can be highly leveraged, and unlike margin calls in traditional markets, where brokers typically request additional collateral, perp positions are designed to liquidate automatically. (WSJ)
Brian Moynihan at BofA, does a workout, reads five papers and reads his emails before 7am. (Fortune)
Chirayu Rana’s ex-lawyer will have to disclose whether his ex-client made any false claims. (NY Post)
Jain Global’s Bobby Jain and his wife had a foundation which appeared to be supporting socialist thinktanks. (NY Post)
New London apartments with large windows are architecturally unsuited to the heat. Faiz Abbas, 31, a software engineer, says he’s struggled to sleep and work from home in his two-bed apartment in south London. “It’s hard to concentrate. I don’t like to sweat at my desk.” (Bloomberg)
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