{"text":[[{"start":8.15,"text":"Citadel has sold more than 80 per cent of the portfolio it took on from buying the majority of Situational Awareness’s stock bets last month after the AI-focused hedge fund was almost toppled by the recent tech sell-off."}],[{"start":21.25,"text":"Ken Griffin’s hedge fund told investors on Friday that it had offloaded most of the “aggregate risk” from Situational Awareness’s book, having completed almost 100 block trades that amounted to more than $4bn in recent weeks to unload the positions, according to a letter seen by the FT."}],[{"start":39.3,"text":"The billions of dollars’ worth of stock sales in just three weeks suggest that Citadel is likely to have flipped the positions for a sizeable profit as tech stocks have widely recovered since Griffin sealed the deal with Situational Awareness at the end of July."}],[{"start":54.5,"text":"Citadel’s sudden swoop for the Situational Awareness stock portfolio marked one of the largest rescue deals in Wall Street history, and a dramatic episode in a volatile period for equities as investors rushed into stocks linked to AI before being gripped by anxiety that the boom in the sector was overblown. "}],[{"start":74.7,"text":"A weeks-long sell-off of tech stocks in July spurred widespread pain on Wall Street. Situational Awareness, the hedge fund run by 24-year-old OpenAI alumnus Leopold Aschenbrenner, emerged as its biggest casualty."}],[{"start":88.7,"text":"The AI-focused fund had amassed well over $20bn in assets in just two years, despite the fact that its founder had no experience on Wall Street."}],[{"start":98.45,"text":"Aschenbrenner, who was fired by OpenAI, boasted extensive connections in Silicon Valley and was hailed by some as a prodigy and the “Nostradamus of AI”."}],[{"start":108.45,"text":"As he faced losses in July’s sell-off, Aschenbrenner first tried to raise additional funds through individual asset sales, but then pivoted to selling the majority of his stock holdings to Griffin’s firm in a deal that was pulled together in just 24 hours."}],[{"start":123.85000000000001,"text":"Citadel purchased the positions at a roughly 10 per cent discount, the FT has previously reported, betting that it could afford to hold the stocks until the market steadied. Shares of Situational Awareness’s biggest holdings, including chipmakers Sandisk and Micron, quickly recovered, giving Griffin a window to turn a rapid profit."}],[{"start":142.45000000000002,"text":"The deal was also in some ways a self-fulfilling prophecy. Griffin’s agreement to buy Aschenbrenner’s stock book stymied fears of more forced selling on Wall Street, which helped to boost share prices across the tech industry."}],[{"start":155.35000000000002,"text":"Citadel’s subsequent transactions to exit these positions included some of the largest block trades of the year, the firm said. Griffin has not told investors how much the stock portfolio was worth or how much the firm paid for the positions."}],[{"start":168.40000000000003,"text":"Citadel beat out rivals including Millennium Management for the stock book. The secretive trading shop Jane Street, which also vied for Situational Awareness’s assets, was one of the hedge fund’s investors. "}],[{"start":181.45000000000005,"text":"Jane Street posted a roughly $15bn loss in July after the turmoil."}],[{"start":186.80000000000004,"text":"Griffin rarely writes letters to investors. His message this week was a testament to the extraordinary nature of the rapid deal he cut with Situational Awareness last month."}],[{"start":196.35000000000005,"text":"“Over our nearly thirty-six-year history, we have prided ourselves on being front-footed and proactive during periods of market dislocation,” Griffin wrote. The firm’s flagship fund was up 6 per cent in July, while many of its rivals lost money or were relatively flat. "}],[{"start":213.45000000000005,"text":"“Only Citadel could have delivered a solution of this scale on this timeline,” he added."}],[{"start":219.65000000000003,"text":"Citadel has stepped in before to buy other hedge funds’ positions when they ran into trouble. In 2006, the firm bought Amaranth Advisors’ entire trading book alongside JPMorgan Chase after the fund blew up from bad bets on natural gas. And a year later, Griffin’s firm pulled a similar stunt, buying Sowood Capital Management’s credit portfolio when it collapsed."}],[{"start":241.85000000000002,"text":"Yet unlike these past hedge fund implosions, Situational Awareness survived the bruising fire sale. The firm held on to its private stakes, including its valuable position in Anthropic, and a small public equity book."}],[{"start":256.85,"text":"Aschenbrenner told investors earlier this month that despite the recent turbulence, capped by the emergency transaction with Griffin, the firm was still up 80 per cent for the year. Situational Awareness had earlier this year told investors it was up more than 400 per cent for the first six months of the year."}],[{"start":283.65,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1787357156_1016.mp3"}