company industry financial market hedge fund management predecessor citadel investment group llc wellington financial group founded 1990 headquarters citadel center chicago illinois usa key people kenneth c. griffin founder and ceo gerald beeson coo adam cooper clo alex lurye head of global portfolio construction and risk b. kevin turner vice chairman of citadel and ceo of citadel securities products alternative investments market making aum us 25 billion 1 2 number of employees 1 400 website www.citadel.com citadel formerly known as citadel investment group llc is an american global financial institution . founded in 1990 by kenneth c. griffin the company operates two primary businesses citadel one of the world s largest alternative asset managers with more than 25 billion in assets under management ; and citadel securities one of the leading market makers in the world trading products including equities equity options and interest rate swaps for retail and institutional clients . 3 citadel is one of only three percent of hedge funds that have been in existence for more than 20 years . recognized for its investment performance the firm manages assets for many of the world s largest institutional investors including sovereign wealth funds pensions and university endowments . 4 the company has more than 1400 employees with headquarters in chicago and offices throughout north america asia and europe . 5 contents 1 business segments 1.1 citadel 1.2 citadel securities 1.3 citadel technology 2 history 2.1 founding 2.2 early history 2.3 the 2008 financial crisis 2.4 risk management 2.5 major investments 3 market advocacy 4 offices 5 philanthropy 6 recognition 7 see also 8 references 9 external links business segments edit citadel edit as of january 2016 citadel manages more than 25 billion in capital and is one of the world s largest asset managers . 1 6 citadel ranks as the eleventh largest hedge fund manager in the world 7 and the second largest multi strategy hedge fund globally . 5 citadel s group of hedge funds rank among the largest and most successful hedge funds in the world . 8 the hedge fund s assets under management has increased by 29 % and more than 10 billion since 2014 . 9 citadel manages funds across five different investment strategies including equities commodities fixed income quantitative strategies and credit . 10 the firm is known for its state of the art technology fundamental research and strong risk management culture . 11 12 in 2011 the funds capped off two years of solid returns from 2009 and 2010 by crossing their high water marks with gains of more than 20 percent outperforming the industry average of 5 percent losses . 2 13 the firm s kensington and wellington funds posted returns of about 25 percent in 2012 completing their recovery from the financial crisis . 14 in 2014 citadel became the first foreign hedge fund to complete a yuan fundraising as part of a program to allow chinese investors to invest in overseas hedge funds . 13 citadel securities edit citadel securities was formed in 2002 and is a leading market maker providing liquidity and trade execution to retail and institutional clients . citadel securities automation has resulted in more reliable trading at lower costs and with tighter spreads . 2 barron s recently ranked citadel securities 1 in providing price improvement for investors in both s & p 500 and non s & p shares . 13 citadel securities makes markets in more than 7 000 u.s. listed securities and in about 18 000 otc securities worldwide . 15 citadel securities is the largest market maker in options in the u.s. executing about 25 percent u.s. listed equity options volume . 16 according to the wall street journal about one third of stock orders from individual investors is completed through citadel which accounts for about 10 % of the firm s revenue . 9 citadel securities also executes about 13 percent of u.s. consolidated volume in equities and 28 percent of u.s. retail equities volume . 17 18 in 2014 citadel securities expanded its market making offering to interest rate swaps one of the most commonly traded derivatives . 19 according to a report in the march 2015 edition of risk magazine citadel provides quotes to traders in an average time of 0.35 seconds compared to 2.05 seconds for the next closest market maker . 20 the move into derivatives trading aligns with mandatory clearing requirements under the dodd frank act a provision intended to prevent a future lehman brothers style collapse . 21 citadel securities retail trading platform is headed by jamil nazarali who was named to the 2014 trading technology 40 by institutional investor . 22 in july of 2016 citadel hired microsoft coo and former wal mart executive b. kevin turner to be the ceo of citadel securities . 23 citadel technology edit citadel technology established in 2009 is the wholly owned and independently operated affiliate of citadel . 24 25 it offers investment management technology developed internally at citadel to a wide range of firms and funds . 26 in 2013 citadel technology announced a partnership with redi . the partnership combines citadel s order management system oms with redi s execution management capabilities ems . 24 history edit founding edit ken griffin launched his trading career out of his dorm room at harvard university in 1987 with 265 000 raised from friends and family . 27 28 as a sophomore he traded convertible bonds and hooked a satellite dish to the roof of his dormitory . 28 29 after graduating with a degree in economics griffin joined chicago based hedge fund glenwood partners led by hedge fund pioneer and griffin mentor frank meyer . 28 in november 1990 griffin founded citadel with meyer s backing . 28 30 early history edit according to a new york times report citadel was started with 4.6 million in capital . 31 citadel was originally named wellington financial group after its flagship fund . 32 the company name was changed to citadel in 1994 . 32 within eight years the firm had more than 2 billion in assets . 33 in 1998 citadel started requiring investors to accept terms that restrict ed their ability to withdraw their capital according to institutional investor . 33 when fund long term capital management collapsed later that year citadel s capital lockdown made it a rare buyer as desperate hedge funds unloaded bond inventory . 33 the 2008 financial crisis edit during the 2008 financial crisis the firm s kensington and wellington funds lost 55 percent of their value by the end of the year . 34 griffin said we were losing hundreds of millions of dollars a week if not more . cnbc parked a van in front of citadel waiting to break the story of our demise . 35 citadel suspended shareholder redemptions which griffin called one of the most difficult decisions in citadel history . 36 griffin later conceded that the firm was overly confident it could weather any financial storm . he covered all investor management expenses during that period . 36 on january 17 2012 citadel s flagship funds crossed their respective high water marks earning back the losses from 2008 . griffin stated we did exactly what we said we would do and we did it the right way . the world changed dramatically in 2008 and we adapted our capabilities and resources to successfully compete in this new environment . 36 risk management edit citadel s investing approach changed following the 2008 financial crisis . according to risk magazine the foundation of citadel s success is in large part a result of the risk management ethos . 11 the firm s risk management philosophy is focused on three main areas risk capital allocation stress exposure and liquidity management . 37 citadel s risk management center has 36 monitors displaying more than 50 000 instruments being traded within the firm s portfolios . 38 it is a real time view of citadel s risk exposures across its investments and market making operations globally . 11 the firm runs 500 stress tests each day to simulate the impact of potential economic and geopolitical crises or other market dislocation . 39 citadel aggregates investment positions on trading screens to calculate more than 500 doomsday scenarios to assess the potential of risk for the firm . 9 in 2014 citadel rated an a grade for risk management in the annual institutional investor hedge fund report card . 40 in april 2015 ben s. bernanke who was the united states federal reserve chairman for eight years joined citadel as a senior adviser on global economic and financial issues . 41 major investments edit citadel is known for its many notable investments over the years . in 2006 the company acquired large portions of amaranth advisors energy portfolio . in 2007 citadel purchased the entire portfolio of rival hedge fund sowood asset management over the course of a weekend negotiation . sowood had lost hundreds of millions of dollars and had to liquidate their portfolio to meet margin calls prior to the opening of the market on monday . 42 in november 2007 citadel provided a 2.5 billion cash infusion to e trade financial taking a nearly 20 percent stake in the online broker that was ensnared in the home mortgage crisis . 43 in a 2011 letter to the e trade board citadel criticized the company for destroying more than 9 billion in stockholder value for a phenomenal franchise . 44 the letter called on e trade to explore a sale of the company . in 2013 citadel sold its remaining share in e trade . 45 market advocacy edit citadel has played an active role in market structure issues and has advocated for financial legislation . in 1999 congress repealed a provision in the glass steagall act of 1933 that strictly separated banking and trading activities by financial firms . griffin called dismantling that law one of the biggest fiascos of all time . 46 in the aftermath of the 2008 financial crisis griffin and citadel called for greater transparency in derivatives trading a stance at odds with many other hedge funds and major financial firms . the company spoke out against wall street for lobbying to delay the implementation of the dodd frank act . 46 47 griffin has also called for breaking up too big to fail banks and separating their banking and trading activities . 47 following the 2014 publication of flash boys by michael lewis who claimed financial markets are rigged by high frequency traders at the expense of smaller investors griffin became a high profile defender of today s markets pushing for the transformation from a dealer dominated model to one that is more transparent automated and competitive . griffin claimed u.s. equity markets are the fairest most transparent resilient and competitive in the world before the senate banking committee . 48 offices edit citadel employs more than 1 250 individuals globally with its flagship operation located in the citadel center a 355 million office tower in the heart of downtown chicago . 49 50 the 37 story citadel center office tower opened in 2003 with citadel as its anchor tenant . 51 citadel also has offices in new york hong kong san francisco boston dallas london houston greenwich denver shenzen shanghai and toronto . 52 philanthropy edit citadel is an active participant in the community by providing educational opportunities and helping children and families with acute medical needs . the firm also partners with food banks around the united states for a virtual food drive . in 2015 citadel s contributions to the greater chicago food depository were the highest from a single corporate donor in that organization s history . 53 citadel leads a business plan competition for the national foundation for teaching entrepreneurship mentoring low income high school students . in january 2015 citadel partnered with the national museum