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Killing it like a hooker in Hong Kong

Citadel, Bloomberg and the perils of stale news…

Bloomberg today morning kicked off with a puff piece on Citadel, which will no doubt appear in Bloomberg magazine later in the month…

Oct. 29 (Bloomberg) — Rohit D’Souza was on vacation with his family in India in May 2008 when he got a call from Ken Griffin, founder and chief executive officer of Citadel Investment Group LLC. Griffin wanted the banker, who had just quit his job as head of equity trading and sales at Merrill Lynch & Co., to help him do something no other hedge fund had ever tried.

Less than two months earlier, Bear Stearns Cos. had disappeared, swallowed by JPMorgan Chase & Co. after losing billions on subprime mortgages. Griffin asked D’Souza, a 45- year-old native of Mumbai, if he would be interested in running a full-service investment bank.

6 hours later, WSJ reported the following

The Chicago firm also confirmed that a banker it hired last year to build an investment bank, Rohit D’Souza, was leaving.

The developments showcase the challenges facing the firm that manages $14 billion in assets as it tries to recover from a grim 2008 for its hedge funds while diversifying into other businesses.

Upon which, Bloomberg had to Update the article and add the following

Oct. 29 (Bloomberg) — Rohit D’Souza was on vacation with his family in India in May 2008 when he got a call from Ken Griffin, founder and chief executive officer of Citadel Investment Group LLC. Griffin wanted the banker, who had just quit his job as head of equity trading and sales at Merrill Lynch & Co., to help him do something no other hedge fund had ever tried.

Less than two months earlier, Bear Stearns Cos. had disappeared, swallowed by JPMorgan Chase & Co. after losing billions on subprime mortgages. Griffin asked D’Souza, a 45- year-old native of Mumbai, if he would be interested in running a full-service investment bank.

The two men talked through September as Lehman Brothers Holdings Inc. declared bankruptcy and rumors swirled that Chicago-based Citadel, whose gross assets had reached $145 billion earlier that year, would fail. The firm’s biggest funds, Kensington and Wellington, lost 16 percent that month and started exiting unprofitable businesses. In October, as the funds tumbled another 22 percent, D’Souza said yes. D’Souza said yes.

On Oct. 29, 12 months later, Citadel said D’Souza is leaving the firm and will be replaced by Patrik Edsparr, president of Citadel Europe and head of the company’s fixed- income business. The departure suggests that Griffin’s attempt to graft an investment bank onto a hedge fund firm won’t be easy.

Hilarious… at least Bloomberg is lucky the news wasn’t delayed a couple more days, then in would be in hardcopy in the Bloomberg magazine. However, they certainly couldn’t change the thesis of the article… that Citadel was building an investment bank, without deleting the entire piece… so they just ran with it, regardless of how irrelevant the entire story had become:

His latest enterprise may well be his most audacious, at least since starting his own hedge fund. Grafting an investment bank onto a hedge fund firm won’t be easy. Unlike large banks, Citadel doesn’t have a big balance sheet, so it can’t offer loans to clients to purchase companies or make investments.

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October 30, 2009 - Posted by | Uncategorized | , , , ,

3 Comments »

  1. Its no small wonder that people are getting more and more news from blogs.

    Comment by Nemo Incognito | October 31, 2009

  2. On another note, it would be interesting to hear what you think about my post on the organization of special sits funds. No doubt you’ve seen a few over the years.

    Comment by Nemo Incognito | November 2, 2009

  3. It was on the cover of the US edition of Bloomberg magazine 🙂

    Comment by matal | November 11, 2009


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