00:00As the year comes to a close, we're also learning what asset classes have underperformed.
00:04Wagers on natural gas fizzled this year, putting Citadel on track for its worst annual return
00:09since 2018. For more on this, let's bring in Nishant Kumar. He is chief correspondent
00:13covering hedge funds for Bloomberg News. So what can you tell us about what Citadel has
00:17been doing when it comes to natural gas and why things haven't worked out as well?
00:21Yeah, sure. So commodities have been the big, big differentiator for Citadel over the years,
00:27while most of its multi-strategy hedge fund peers rely on traditional equities rates,
00:34systematic trading for returns. Citadel really built a much, much deeper commodities platform,
00:40including in natural gas, and it has paid off for Citadel. For example, in 2022, they generated
00:47$8 billion from commodities trading. That was half of their total returns. Same story the next two
00:55years, they generated $4 billion each in 2023 and 2024. Again, half of their profits. So that edge
01:04really helps Citadel pull away from rivals. But you know, it cuts both ways. When commodities cool,
01:11as they did in case of Citadel this year, the drag on performance is far more visible. But let me add
01:18here, like Citadel is still heading for its 17th straight year of gains. 9.3% looks modest by its
01:27own standards, but it's in line with what multi-strategy hedge fund peers have produced. It just looks
01:34modest because Citadel has been producing like just under 20% return on an analyzed basis over the last
01:42more than three decades.
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