Citadel LLC - Investments

Investments

Citadel also has multiple subsidiaries such as Kensington Global Strategies (Citadel's largest fund), Wellington Partners (Citadel's oldest fund and its flagship fund), Citadel Equity Fund, Citadel Finance, and Citadel Derivatives Group, which controls 10% of the Philadelphia Stock Exchange . In 2000, Citadel's Wellington affiliate achieved a 52.6% return . Since January 2005, Citadel Derivatives Group has been a Lead Market Maker on the trading floor of the Pacific Coast Exchange . In a strategic partnership with about ten other financial institutions, Citadel Derivatives Group is also a joint owner of the International Securities Exchange .

In 2006, Citadel and JPMorgan Chase acquired the energy portfolio of the failed hedge fund Amaranth Advisors, which had suffered a 65% ($6 billion) loss in assets .

In 2007, Citadel acquired a sizable stake in online brokerage E*TRADE . A Bloomberg News story on 5 September 2008 reported that Joe Russell, a Citadel senior managing director who led the negotiations to acquire E*Trade left after his division suffered losses on the year. Citadel acquisition of E*Trade was announced when its shares were trading at $4.82.

On June 2, 2010 E*TRADE had a one for ten reverse split, based on the current stock, $4.82 would equal $48.20 per current share.

A Reuters story on November 21, 2008 reported that E*Trade's continued existence would likely depend on whether it received funds from the US Treasury under the Troubled Asset Relief Program (TARP). Its shares traded at 87 cents, down approximately 84% from the time Citadel acquired its $2.55 billion stake implying a possible loss of as much as $2.14 billion for Citadel on its equity stake. Citadel has publicly stated in an SEC filing (2011) that its losses since the fourth quarter of 2007 (pre-tax) are over $5B USD. It also chastised the current board for 'squandering' shareholder value, pressed E*Trade to eject two board members, and pursue a sale of itself.