Citadel and Citadel Securities are not the same company. Although both were founded by Ken Griffin, Citadel is a hedge fund and Citadel Securities is an electronic market maker. The two are entirely independent, as evinced by the decision of one to house some interns (and employees) at the Four Seasons in Palm Springs this summer and the other to opt for the American Club Resort in Kohler, Wisconsin.
As independent entities, the two companies file entirely separate accounts in the U.K., where they're compelled to make annual results public. However, given their shared parentage they file accounts simultaneously: Citadel Europe LLP and Citadel Management Europe Ltd. (both part of the hedge fund) and Citadel Securities Europe (the market maker) have just released their results for the year ending December 2019. They suggest that running a hedge fund was far more successful for Griffin in Europe last year.
At Citadel Securities Europe, profits fell 79% between 2018 and 2019 thanks to what the company described as a combination of lower revenues generated in EU markets due to Brexit contingency planning and an increased investment in other businesses. The return on equity went from a healthy 19.7% to a European bank-like 5.5% over the same period as a result.
At Citadel Europe, the story couldn't have been more different. Profits nearly doubled, from $370m in 2018 to $790m in 2019. This could have been very good news for the 13 partners who shared in the winnings and who by implication should have received an average of around $60m each when the profits were distributed in March 2020. However, one of those partners was a corporate entity rather than an actual person and when the large profit share allocated to that entity is deducted the remaining 12 partners had a mere $21m.
Mere mortals at Citadel aren't paid badly either. At Citadel Management Ltd., 218 employees received an average of $1.1m each last year in Europe. At Citadel Securities Europe, 120 employees each got an average of $659k. Needless to say, pay isn't equally distributed and some at the top will have been paid far more than some at the bottom, but the overall picture is one of reasonably unbridled generosity.
In the circumstances, it's good to know that both companies are hiring. Citadel Securities added 11 staff last year and said it was investing heavily in technology. Citadel Management Europe added 31, all in investment management.
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