Three Citadel funds posted July gains after the firm bought a discounted portfolio of artificial intelligence stocks from Situational Awareness, the collapsed hedge fund run by former OpenAI researcher Leopold Aschenbrenner.
Ken Griffin’s flagship Wellington fund rose 5.9% for the month. Almost all of that gain arrived after the purchase.
Citadel Funds Made Half a Year’s Gain From One Deal
Wellington was up just 0.45% in July before the deal, Bloomberg reported. It closed the month at 5.9%.
That gap is the story. The fund did almost nothing for three weeks, then made its year in days.
For scale, Wellington returned 10.2% across all of 2025. July alone delivered more than half of that.
Wellington is now up 12% in 2026. It has already beaten last year’s full result with five months still to run.
The firm’s other two books did better. Citadel Equities gained 14.2% and Tactical Trading added 11.1%, according to figures shared with investors.
Both sit near 27% for the year. In all of 2025 they returned 14.5% and 18.6%.
Rivals moved the other way. Whale Rock’s flagship fund dropped 21.7% in July, erasing roughly half its 2026 gains.
Situational Awareness Had No Choice but to Sell
Situational Awareness peaked near $45 billion in early July. Weeks later it held about $10 billion.
The fund borrowed heavily. Its leverage ran as high as four times its own capital, which magnified every move.
It bet on AI infrastructure and against software. When chip and memory stocks slid, small losses turned large fast.
Its main holdings each fell more than 35% during the month. Goldman Sachs, JPMorgan Chase and Bank of America then demanded more collateral.
The fund could not meet those calls. It sold its whole public stock book, and Citadel took that leveraged equity portfolio at roughly a 10% discount.
The forced selling stopped. The same stocks bounced. Citadel already owned them.
A Playbook Griffin Has Run for 20 Years
None of this is new. In July 2007, Sowood Capital lost half of its $3 billion in under a month. Citadel bought its positions and profited as markets recovered.
A year before that, Amaranth Advisors collapsed on natural gas bets. Its energy book went to Citadel and JPMorgan.
The pattern is consistent. Griffin waits for a seller with no options, then names the price.
Aschenbrenner, 25, had returned 439% through June and more than 1,000% since launching in July 2024. His fund survives on private holdings, including a stake in Anthropic worth about $5 billion.
Citadel has booked the gain but not sold the stocks. The volatility that broke Situational Awareness now sits on its own books.
August earnings from those same AI names will show what the discount was really worth.
Source: BeInCrypto
