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Citadel Advisors Review

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Citadel Advisors, LLC

Citadel Advisors, LLC is a large hedge fund manager located in Chicago with over $194 billion in assets under management, all of which is managed on a discretionary basis. The firm employs 920 advisors across its advisory offices in 12 cities around the world.

Because Citadel solely manages the investments of hedge funds, it does not provide financial planning or consulting services to any clients. The firm also has no direct individual clients. So if you're an individual interested in advisory services, try looking for a financial advisor through SmartAsset's free advisor matching tool.

Citadel Advisors Background

Kenneth Griffin founded Citadel Advisors in 1990, and the firm has since grown into a multi-national investment advisory business with several affiliate organizations. Griffin currently serves as the firm's CEO. The firm employs a number of investment professionals and advisors to help manage the funds under its control.

What Types of Clients Does Citadel Advisors Accept?

Citadel is a hedge fund manager, so its services are restricted to private investment funds (referred to in the firm's SEC filings as pooled investment vehicles). Citadel currently has 21 such funds. While Citadel doesn't directly manage the assets of any clients outside of these funds, several different types of institutional investors and accredited investors invest in the funds.

Citadel Advisors Minimum Account Size

The minimum amount of investable assets required to invest in one of Citadel's funds is $10 million. The firm and its advisors may waive these minimums at their discretion, though.

Services Offered by Citadel Advisors

As a hedge fund, Citadel manages several private investment funds, and does not provide financial planning services. The firm has a number of proprietary investment strategies at its discretion that it applies to these funds' portfolios.

Citadel Advisors Investment Philosophy

Citadel uses a wide variety of investment strategies to drive growth in their funds. Advisors may take long or short positions across a vast range of investment securities. The firm bases its investment decisions on fundamental research and quantitative analysis. As a general rule, all funds look to mitigate risk as much as possible.

Investment strategies at Citadel include:

  • Equities: Focuses on equity securities of global companies using both long and short relative value positions.
  • Fixed-Income & Macro: Focuses primarily on global currency, equity and fixed income market investments. The firm utilizes a wide range of investment instruments to pursue growth within this strategy.
  • Commodities: Focuses on a wide range of commodity markets, including but not limited to power, natural gas and agricultural products. This strategy involves trading physical commodities as well as their derivatives.
  • Credit: Focuses on corporate debt, equity and other securites on a global scale. This strategy also utilizes both long and short relative value positions.
  • Quantitative strategies: Focuses on fixed-income, currency, equity and commodity investments on a global scale using primarily statistical and quantitative modeling as well as predictive analysis.

Fees Under Citadel Advisors

Citadel charges a management fee to each of the funds under its control. This fee is equal to 1% of the fund's net asset value. Aside from this, there is no general fee schedule for investors in the funds at Citadel. The firm does, however, charge performance-based fees on occasion.

What to Watch Out For

Since Citadel takes performance-based fees, advisors may have an incentive to pursue more speculative investment strategies in an effort to generate a higher return, and therefore a higher performance fee. This is a potential conflict of interest. That being said, the firm is bound by fiduciary duty, meaning it is obligated to act in clients' best interests at all times.

Disclosures

Citadel does not have any disclosures listed on its Form ADV

Opening an Account With Citadel Advisors

If you're interested in investing in a Citadel fund, you can go online to its website and submit a contact form. For those who prefer dealing over the phone, you can call Citadel at (312) 395-2100.

Where Is Citadel Advisors Located?

Citadel is headquartered in Chicago at 131 South Dearborn Street, a few blocks west of the Art Institute. The firm also has offices in New York City, London, San Francisco, Hong Kong, Dallas, Dublin, Houston, Boston, Shanghai, Toronto, Raleigh and Greenwich, Connecticut. Your proximity to an office location does not impact your ability to invest in one of the firm's funds.

Tips for Your Investment Portfolio

  • While hedge funds are an option for institutional and high-net-worth investors, individuals without a high net worth may benefit from more traditional investment advisory services. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • The one downside of seeing big returns from the market? If your investments aren't in a tax-advantaged retirement account, you'll have to pay taxes on your earnings. Try SmartAsset’s capital gains tax calculator to see what you'll owe.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
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Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research