Citadel, a prominent hedge fund, has reportedly purchased the entire public equities portfolio of Situational Awareness, a hedge fund founded by Leopold Aschenbrenner. Situational Awareness, which managed $24 billion, faced substantial losses in its AI infrastructure holdings, including investments in companies like SK Hynix. The fund's bets against software companies such as Adobe also did not perform as expected, contributing to its financial difficulties.
Approximately two-thirds of Situational Awareness's portfolio was comprised of long and short equities positions. In response to its financial troubles, Bank of America, Goldman Sachs, and JPMorgan were reportedly assisting the fund in meeting margin calls and reducing its positions. The sale of its public book to Citadel effectively unwinds this portion of Situational Awareness's investments.
Despite the sale of its public equity holdings, Situational Awareness continues to operate with only private investments. The firm is also exploring the sale of some of these private holdings, which include a stake in Anthropic. This development comes after CNBC reported that the hedge fund had unwound its entire public equities portfolio due to the poor performance of its AI-related trades.
