Citadel’s flagship fund surges 6% in July after scooping up distressed AI portfolio at a discount

When a $45 billion hedge fund implodes overnight, someone’s going to pick up the pieces. In this case, that someone was Ken Griffin. Citadel’s Wellington multistrategy fund posted a 5.9% gain in July after acquiring a massive chunk of the public equity portfolio belonging to Situational Awareness, the AI-focused hedge fund run by former OpenAI researcher Leopold Aschenbrenner. The portfolio, valued at approximately $16 billion, was purchased at an estimated 10% discount during what amounted to an overnight fire sale. The move pushed Wellington’s year-to-date return to 12%. How Situational Awareness went from $45 billion to forced seller Situational Awareness had grown to a peak of $45 billion in assets under management earlier in 2026. A broad sell-off in AI infrastructure stocks hammered the fund’s leveraged positions, resulting in a staggering 67% drawdown. The margin pressure became untenable. Situational Awareness was forced to divest the majority of its public equities portfolio, which included significant positions in companies like SK Hynix, Bloom Energy, and CoreWeave. The fund retained its private investments, notably a stake in Anthropic, but the public book had to go. Th...