Situational Awareness, an AI-focused hedge fund run by former OpenAI researcher Leopold Aschenbrenner, sold the bulk of its stock portfolio to Ken Griffin’s Citadel, according to Reuters. The sale followed heavy losses in the fund’s technology holdings, according to Reuters, which cited two sources familiar with the matter.
As part of the transaction, Citadel is picking up the portion of Situational’s public portfolio that had been financed through broker leverage. Situational will retain a book of roughly $10 billion after the deal, comprised of stocks and private investments in companies including Anthropic. The fund has not sold its stake in Anthropic.
Situational was under pressure to either raise fresh capital or offload its entire public equities book, and ultimately chose the latter, according to the sources. The fund’s holdings had included sizable positions in prominent AI names rocked by the recent market selloff.
Global hedge funds are experiencing their biggest monthly drawdown on record as AI stocks have broadly sold off, erasing much of the sector’s earlier gains. Goldman Sachs said in a prime brokerage note that Asia-focused fundamental long-short funds are down an average of 18.6% this month through July 28. A separate note from Morgan Stanley’s prime brokerage unit said stock-picking hedge funds have been rushing to unwind AI positions, covering short positions and selling long positions in roughly equal amounts.
