Key Takeaways
- • Citadel's primary multistrategy Wellington fund returned 19.4% in 2019, outperforming Point72 Asset Management's 16% gain and the broader hedge fund industry's 9% average return.
- • Both flagship funds significantly underperformed the S&P 500, which delivered a 29% return in 2019—its strongest annual performance since 2013.
- • Citadel returned all 2019 profits to investors, distributing more than $6 billion, while the Wellington fund has consistently outperformed the S&P 500 on rolling two-year, five-year, and 10-year bases since its 1990 inception.
- • The rivalry between Griffin and Cohen intensified in 2019 as at least five Point72 portfolio managers defected to Citadel throughout the year, with reports indicating Cohen refused to shake one departing manager's hand.
- • Citadel's Wellington fund generated gains across all five of its core strategies in 2019, demonstrating diversified performance across its multistrategy approach.
Summary
Ken Griffin's Citadel demonstrated superior performance relative to peer hedge funds in 2019, with its flagship Wellington multistrategy fund posting a 19.4% return compared to Steve Cohen's Point72 Asset Management, which returned approximately 16% for the year. Both operations substantially outperformed the broader hedge fund industry, which averaged a 9% gain according to Bloomberg's Hedge Fund Indices. However, neither fund kept pace with an exceptionally strong equity market environment, as the S&P 500 delivered a 29% return—marking its best annual performance since 2013.
The Wellington fund's outperformance was underpinned by gains across all five of its core strategies throughout 2019. Citadel's $30 billion operation demonstrated consistent execution across its diversified approach. Notably, the firm returned all 2019 profits to investors, resulting in distributions exceeding $6 billion. The Wellington fund's long-term track record reinforced its competitive positioning: since inception in 1990, it has outperformed the S&P 500 on an absolute basis and on rolling two-year, five-year, and ten-year performance metrics.
Beyond headline performance metrics, the competitive dynamic between Griffin and Cohen extended into talent acquisition and retention. The Wall Street Journal reported that at least five portfolio managers departed Point72 for Citadel throughout 2019, reflecting either performance-driven recruitment or dissatisfaction at Cohen's operation. The tension reached a notable interpersonal level, with reports indicating Cohen declined to shake the hand of one portfolio manager departing for Griffin's fund, underscoring the intensity of the rivalry between the two prominent hedge fund operators.
Despite Citadel's outperformance relative to Point72 and the hedge fund industry, the broader investment management landscape in 2019 demonstrated that large-capitalization equity exposure substantially exceeded hedge fund returns, a dynamic that would resonate throughout subsequent market cycles and influence institutional allocation decisions.
The Wellington fund's outperformance was underpinned by gains across all five of its core strategies throughout 2019. Citadel's $30 billion operation demonstrated consistent execution across its diversified approach. Notably, the firm returned all 2019 profits to investors, resulting in distributions exceeding $6 billion. The Wellington fund's long-term track record reinforced its competitive positioning: since inception in 1990, it has outperformed the S&P 500 on an absolute basis and on rolling two-year, five-year, and ten-year performance metrics.
Beyond headline performance metrics, the competitive dynamic between Griffin and Cohen extended into talent acquisition and retention. The Wall Street Journal reported that at least five portfolio managers departed Point72 for Citadel throughout 2019, reflecting either performance-driven recruitment or dissatisfaction at Cohen's operation. The tension reached a notable interpersonal level, with reports indicating Cohen declined to shake the hand of one portfolio manager departing for Griffin's fund, underscoring the intensity of the rivalry between the two prominent hedge fund operators.
Despite Citadel's outperformance relative to Point72 and the hedge fund industry, the broader investment management landscape in 2019 demonstrated that large-capitalization equity exposure substantially exceeded hedge fund returns, a dynamic that would resonate throughout subsequent market cycles and influence institutional allocation decisions.
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