Citadel Hiring About 17 Portfolio Managers From Shuttered Hedge Fund Visium
July 20 2016 - 8:10PM
Dow Jones News
Kenneth Griffin's Citadel LLC hedge fund hired about 17
portfolio managers this week from fallen rival Visium Asset
Management, imperiling Visium's plan to sell its last remaining
part to another money manager.
The move is reminiscent of Mr. Griffin's fast moves to absorb
staff and assets in decades past from sunken foes like energy
company Enron Corp. and hedge funds Amaranth Advisors LLC and
Sowood Capital Management LP. Those helped make Mr. Griffin
billions.
The Visium hiring spree comes with another advantage: It helps
Mr. Griffin and Citadel head off a potential new competitor in the
world of multistrategy hedge funds.
Visium said in June it would unwind after an insider-trading
probe and other charges brought by federal prosecutors. It said it
would sell the one fund that remained to AllianceBernstein LP, a
traditional asset manager looking to expand in the hedge-fund
business.
Citadel's move threatens Visium's AllianceBernstein deal, as the
departing traders represent a significant portion of the staff that
was to cross over, people familiar with the matter said. After The
Wall Street Journal reported Wednesday afternoon on the departures,
Visium told investors it would liquidate the fund.
An AllianceBernstein spokesman declined to comment on whether
the deal still would go through.
The day after Visium announced last month it largely would
close, a new Citadel executive looking to make a splash, Richard
Schimel, called Mr. Griffin at home on a Saturday with the idea to
perhaps pick off the staff.
Mr. Griffin's response: "Go for it," Mr. Schimel recalled.
In a frenetic few weeks of back-to-back all-day interviews, Mr.
Schimel dangled the prospect of higher pay than the managers made
at Visium and a seamless transition.
"The common theme across all the interviews was these guys
really wanted to stay together," he said.
The new employees will form the lion's share of Mr. Schimel's
starting staff at Aptigon, a new Citadel stock-trading hedge fund
arm with offices in the New York area and San Francisco. Aptigon
will begin trading this fall with billions of dollars.
Sarah Krouse
Write to Rob Copeland at rob.copeland@wsj.com
(END) Dow Jones Newswires
July 20, 2016 19:55 ET (23:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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