It’s not just J PMorgan that made a $1 billion trading commodities, at roughly the same time that it paid a record $1 billion fee for manipulating the gold market: Ken Griffin’s Citadel, where Ben Bernanke is a senior advisor, also had a great year in the sector with Reuters reporting that Citadel’s investments in commodities returned more than $1 billion this year, helping to drive strong overall performance for one of the world’s largest funds.
This is a repeat performance for Citadel’s commodities business, which was also up by at least $1 billion in 2019, boosted by strong gains in European natural gas and power trading.
Citadel “benefited from gains across the commodities business in oil, power, natural gas and agriculture markets this year” Reuters’ sources said, with Citadel’s flagship multi-strat Wellington fund up by 21.2% this year through November, putting it on track to have its best year since 2012. Citadel has materially outperformed the HFRI Fund Weighted Composite Index – which tracks the performance of the global hedge fund industry – and which gained 6.2% in November, the strongest monthly gain since December 1999, and is up 7.3% year-to-date.
Citadel, which had about $35 billion in assets under management as of Oct. 1, recently hired a former Glencore energy derivatives trader to head its first commodities trading team in Asia, and recruited former Morgan Stanley commodities trading chief Jay Rubenstein. The fund also hired Eike Schick, former head of the European natural gas desk at Freepoint Commodities, as a portfolio manager in London, and Mark Tawney, who ran Munich Re Trading, joined the company to lead a weather derivatives team earlier this year.
According to Bloomberg, Citadel’s Wellington fund returned 21% this year through November. All five of the fund’s core investment strategies contributed to the gain and have positive returns for the year.