Good morning. Ken Griffin’s Citadel made a $16bn profit for investors last year, establishing his company as the most successful hedge fund in history.
Citadel, which manages $54bn in assets, made an astonishing 38.1 per cent return in its main hedge fund in 2022, according to research by LCH Investments, run by Edmond de Rothschild.
The profit, which was driven by bets across a range of asset classes including bonds and equities, surpasses the roughly $15.6bn made by John Paulson in 2007 through his bet against subprime.
Citadel, which Griffin set up in 1990, made a total gross trading profit of about $28bn last year, meaning that it charged its investors — one-fifth of whom are its own employees — roughly $12bn in expenses and performance fees.
The $16bn of gains for investors means Griffin’s Citadel replaces Ray Dalio’s Bridgewater, which for seven years had been the all-time most successful hedge fund, at the top of LCH Investments’ list of the top money managers.
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Five more stories in the news
1. Elliott takes multibillion-dollar activist stake in Salesforce Another big activist investor has joined the shareholder roster of the enterprise software group Salesforce, raising the pressure on co-chief executive and co-founder Marc Benioff. Elliott Management joins fellow activist Starboard Value, which disclosed a stake in Salesforce in October with a call to increase profit margins. Elliott is yet to reveal its position on the company or whether it has made recommendations to the board.
2. Brazil and Argentina to start preparations for a common currency Brazil and Argentina will this week announce that they are starting preparatory work on a common currency, in a move which could eventually create the world’s second-largest currency bloc. The initial focus will be on how a new currency, which Brazil suggests calling the “sur” (south), could boost regional trade and reduce reliance on the US dollar, officials told the Financial Times.
3. Eurozone set to avoid recession this year as economists’ gloom lifts The eurozone will avoid a recession this year according to a widely-watched survey of economists which illustrates the sharp about-turn in global economic sentiment in the past couple of weeks. The improved outlook is linked to lower energy prices, bumper government support and the earlier-than-anticipated reopening of the Chinese economy.
More news on the EU economy: Top US investment management firms are going on a hiring spree in Europe as they search for growth opportunities outside of China.
4. Joe Biden set to appoint new White House chief of staff The White House is planning to appoint Jeff Zients as chief of staff after the expected departure of Ron Klain, people familiar with the matter said yesterday. The appointment, if confirmed, would be a pivotal reshuffle at one of the most delicate moments in Joe Biden’s presidency after it was confirmed that a new batch of documents were discovered at his private residence.
5. Suspected Los Angeles gunman takes own life Huu Can Tran, 72, suspected of killing 10 people and injuring 10 more in the Los Angeles area on Saturday night, died from a self-inflicted gunshot wound yesterday afternoon, authorities said. The attack in the Asian-majority community was the deadliest instance of gun violence in the US since 21 people were killed in a school in Uvalde, Texas, in May 2022.
The day ahead
Markets update The dollar weakened in trading today as equity markets in Europe rose. Contracts tracking Wall Street’s blue-chip S&P 500 and those tracking the tech-heavy Nasdaq 100 traded in a tight range ahead of the New York open. Stocks rallied on Friday but ended the week lower.
EU foreign ministers meet in Brussels The meeting takes place amid a row over whether to supply Ukraine with modern tanks. Germany on Friday refused to commit to sending its prized Leopard tanks to the frontline but Poland’s prime minister said today he would seek Germany’s permission to send the tanks. Read more on the row.
Nigerian legal trial The African country is due to mount a high-stakes legal trial at London’s High Court. The case involves a long-running attempt to overturn an $11bn arbitration award that left the Nigerian government owing more than a quarter of its foreign reserves to an obscure oil and gas company.
European Space Agency address Director-general Josef Aschbacher gives the ESA’s annual address, providing an overview of its achievements in 2022 and highlighting new opportunities in 2023.
Financial markets in China closed for new year China’s biggest annual holiday continues today and runs until January 27. Chinese citizens are expected to make more than 2bn trips as they travel for the celebrations for the first time since 2019.
Read more: Rural parts of China are at risk from Covid-19 as drug supplies are critically low.
What else we are reading
Can Big Tech make livestreams safe? Platforms such as Instagram and TikTok prohibit content that promotes self-harm, but graphic videos still get broadcast to users in the form of livestreams. To better moderate dangerous videos, tech companies are looking to stricter requirements for age verification and the use of AI in moderation.
We, the people, are to blame for Britain’s economic woes On almost all relevant international comparisons, the UK’s economy looks sickly, writes Economics Editor Chris Giles. If the UK’s economic problem is relative decline and chronic weakness, we first need to be honest about the causes before thinking about solutions, he says, identifying three proximate causes.
Luxury boom shows the staying power of the ultra-rich We may be heading for a global recession, writes Rana Foroohar, but the world’s richest people cannot seem to stop splashing the cash, with spending on luxury goods and experiences growing by about 20 per cent in 2022.
All bets are off on Japan’s sports gambling craze Legal betting is only allowed on four sports in Japan and has thrived to a remarkable degree during three years of lockdowns. Now as the country prepares to relax mask-wearing restrictions the question is whether the gambling craze will continue.
Forget the central business district Business districts, which are often dead in the evenings and at weekends, have fallen quieter still with the rise of remote and hybrid work. Now, a push to create more vibrant central districts is taking off, centred around socialising rather than just going into the office.
Take a break from the news
Can you predict the year ahead better than superforecasters? The FT has teamed up with a forecasting organisation to craft 10 questions about how 2023 will play out. Complete our interactive quiz to find out how your answers compare with those of professionals, as well as other FT readers.
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Source: Economy - ft.com
