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Ken Griffin buys SK Hynix, CoreWeave from distressed Situational Awareness
Citadel stepped in within 24 hours after Situational Awareness faced margin calls, cutting the AI hedge fund’s assets from about $45 billion at its July peak to around $10 billion.
Ken Griffin’s Citadel moved to stabilize the distressed AI hedge fund Situational Awareness, buying the fund’s leveraged holdings at a discount after lenders became unwilling to continue backing it, according to Reuters. The rescue followed the fund’s rapid deterioration as technology shares slid in the prior weeks and margin calls forced liquidation.
At its peak in July, Situational Awareness managed about $45 billion in assets and had posted gains of more than 1,000% since inception. Reuters reported that critics had questioned founder Leopold Aschenbrenner’s lack of money management experience before launching the fund in July 2024.
As the situation worsened, Aschenbrenner began liquidating positions to meet margin calls, leaving investors focused on what drove the collapse. Reuters said Citadel executives reached out to the hedge fund by Wednesday morning, and Griffin spoke directly with Aschenbrenner, while Citadel co-chief investment officer Pablo Salame and other executives worked through the night to assess the trading book positions and how liquid the bets were.
On Thursday, Reuters reported that Aschenbrenner sold all of his leveraged investments, including SK Hynix and CoreWeave, to Citadel at a discount. As a result, the fund’s assets shrank to around $10 billion, though Reuters said there was limited clarity at the time on how much Citadel had made on the deal.