Three Citadel funds posted gains in July after the firm purchased a discounted portfolio of artificial intelligence stocks from Situational Awareness, the collapsed hedge fund run by former OpenAI researcher Leopold Aschenbrenner. Ken Griffin's flagship Wellington fund rose 5.9% for the month, with almost all gains arriving after the purchase, according to Bloomberg. The fund was up just 0.45% in July before the deal. Citadel acquired the leveraged equity portfolio at approximately a 10% discount after Situational Awareness faced margin calls from Goldman Sachs, JPMorgan Chase and Bank of America and could not meet collateral demands.
Citadel Funds Delivered Half-Year Returns in Single Month
Wellington returned 10.2% across all of 2025. July alone delivered more than half of that annual result. The fund is now up 12% in 2026, already exceeding last year's full performance with five months remaining.
Citadel Equities gained 14.2% in July and Tactical Trading added 11.1%, according to figures shared with investors. Both funds sit near 27% for the year. In all of 2025 they returned 14.5% and 18.6%.
Whale Rock's flagship fund dropped 21.7% in July, erasing roughly half its 2026 gains.
Situational Awareness Sold Portfolio Under Margin Pressure
Situational Awareness peaked near $45 billion in early July. Weeks later it held about $10 billion. The fund borrowed heavily, with leverage running as high as four times its own capital.
The fund bet on AI infrastructure and against software. When chip and memory stocks slid, its main holdings each fell more than 35% during the month. Goldman Sachs, JPMorgan Chase and Bank of America then demanded more collateral.
The fund could not meet those calls. It sold its whole public stock book, and Citadel took that leveraged equity portfolio at roughly a 10% discount. The same stocks bounced after the forced selling stopped.
Aschenbrenner, 25, had returned 439% through June and more than 1,000% since launching in July 2024. His fund survives on private holdings, including a stake in Anthropic worth about $5 billion.
Griffin Repeated Distressed-Seller Strategy From 2006-2007
In July 2007, Sowood Capital lost half of its $3 billion in under a month. Citadel bought its positions and profited as markets recovered. A year before that, Amaranth Advisors collapsed on natural gas bets. Its energy book went to Citadel and JPMorgan.
Citadel has booked the gain but not sold the stocks. The volatility that broke Situational Awareness now sits on its own books.
FAQ
What did Citadel's Wellington fund return in July?
Citadel's Wellington fund rose 5.9% in July. The fund was up just 0.45% before purchasing Situational Awareness's distressed AI stock portfolio, with almost all gains arriving after the deal.
Why did Situational Awareness sell its stock portfolio?
Situational Awareness could not meet margin calls from Goldman Sachs, JPMorgan Chase and Bank of America after its main holdings fell more than 35% during the month. The fund's leverage ran as high as four times its capital, magnifying losses when chip and memory stocks slid.
How much did Citadel pay for the Situational Awareness portfolio?
Citadel acquired the leveraged equity portfolio at approximately a 10% discount, according to sources familiar with the transaction.
