Citadel Investment Group’s biggest hedge fund fell as much as 30% this year, because of losses on convertible bonds, stocks and corporate bonds, reports Bloomberg. Kenneth Griffin, who founded Chicago-based Citadel in 1990 and holds 30% of its $18bn of assets in cash according to S&P, warned in a letter to investors this week that returns for the $10bn Kensington Global Strategies Fund may swing wildly amid volatile market conditions. Griffin said his main mistake was not being pessimistic enough about the extent of the financial crisis, which began in 2007, a year he described in his letter as “the most successful” in the firm’s history. Kensington climbed about 30% in 2007. Kensington’s loss, more than double the decline of the Credit Suisse/Tremont Hedge Fund Index, may dent Griffin’s reputation as a consummate risk manager with no patience for traders who can’t make money. Kensington’s only annual loss was a 4% drop in 1994.
