00:00Citadel's flagship fund surged nearly 6% in July after the firm bought a discounted portfolio of AI stocks from
00:07troubled hedge fund Situational Awareness.
00:09Bloomberg's Hema Parmar has been reporting on this and joins us now, who's been publishing hit after hit of such
00:15fantastic pieces about the strange moment for hedge funds that we're living in.
00:18Your reporting is remarkable. They were basically flat year-to-date before this deal, and now they're up 12%
00:25year-to-date for their flagship fund.
00:27So they were flat for the month.
00:28For the month, yes. Thank you for that.
00:30But up now, nearly 6% on the month. So it really shows what kind of a return a deal
00:37of this size and scope can make for a multi-strat hedge fund.
00:40They basically made more in one month than they had the whole year. They were up about mid-5%
00:46through the year. Up until this deal, now up 12%. Pretty impressive.
00:52What about the folks left over at Situational Awareness? That's still around, right?
00:56It's still around. They still have more than $10 billion in assets. A lot of that is in their private
01:01stocks, in the private companies.
01:03So a big stake in Anthropoc, among a few other companies. So they also still have the remaining shares that
01:10were not purchased by Citadel.
01:12So those two have likely risen in value in the rally that we saw after the deal was announced. So
01:19they are still around. They are still sizable.
01:21So Ken Griffin clearly makes a killing from this transaction. What about the rest of the hedge funds of the
01:28universe that you've been reporting on, whose returns were troubled because of their AI exposure?
01:33Yes. So we are seeing the pain really flow through the space. Whale lock down a significant amount for the
01:39year. Down 22%. Really painful experience for that fund.
01:45This is a fund that's concentrated and makes AI bets. Down 22% for the month, I should say. Still
01:50up on the year.
01:51But it really does show these firms that are highly concentrated and have a really strong point of view. We've
01:57seen losses at Co2.
01:58They were down 8% for the month, which is the worst month in over a year.
02:03We can run 2% more.
02:03So gap 1 almost is the worst month.
02:03We can turn around.
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