Ken Griffin's Citadel Launching New Fund With Lower Fees

To attract dollars and better compete, Ken Griffin's Citadel is cutting its fees on a new fund Citadel is about to launch. The fund with lower fees will focus on currencies, interest rates and broad macroeconomic issues.

The Wall Street Journal reported that Citadel hopes to raise $2 billion, but it said it could ultimately raise $5 billion for its new Citadel Global Macro Fund. It is not known if Citadel will reach its lofty fundraising goals, but Citadel hopes it will benefit from one of its few strategies that made money last year, its macro funds.

Investors in Citadel have paid management fees as high as 6% to 9% in order to get access to Citadel's once-famed Kensington and Wellington funds, but those are the same ones that suffered massive declines last year.

For the new fund, Citadel will charge investors a more typical hedge fund fee arrangement: 2% of assets plus a 20% performance fee on profits. In addition, investors will pay a 0.25% fee to cover costs of settling trades and other back-office duties.

Citadel also is launching a fund focused on stocks and another focused on convertible bonds. However, convertible-bond losses hurt Citadel last year, but Citadel now see bargains in that market too.

You can learn more about Ken Griffin here.

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