Because Citadel, which is a fee-only firm, 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 multinational investment advisory business with several affiliate organizations. Griffin currently serves as the firm's CEO.
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 17 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.
In February 2021 Citadel officials were summoned to testify before Congress, as were other financial executives, regarding the GameStock short squeeze. Specifically, some lawmakers expressed concern over a possible conflict of interest between the Citadel Advisors, which invested $2 billion in Melvin Capital to help it recover from its GameStop losses, and Citadel Securities, which profited from Robinhood's payment-for-order flow. Citadel had not been charged formally with wrong-doing as of July 2021.
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.
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.
All information is accurate as of the writing of this article.
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 a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can 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.