Hedge fund Citadel pays $2.5m+, on average
How much does Citadel, the hedge fund, pay?
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Globally, Citadel doesn't say. It's not a publicly listed company and it doesn't disclose its headcount or compensation spending. However, Bloomberg has seen a prospectus for this week's $1bn Citadel bond offering, which offers an indication that Citadel pays a lot.
In the nearly three years from January 2021 to the end of September 2024, the prospectus says that employees working for Citadel's three main funds (Wellington, Kensington and Kensington II) were paid a total of $15.3bn.
The prospectus doesn't state how many people worked for those funds, but Wellington, Kensington and Kensington II accounted for 80% of Citadel's assets under management at the start of this year. If Citadel's global 2,800 employees are distributed proportionately, that implies 2,240 people working for the three funds alone and earning an annualized average of $2.5m each. Generous.
Citadel didn't comment on whether this is correct. In London, where Citadel registers the accounts of its various entities with Companies House, pay ranges from an average of $566k per head at Citadel Enterprise Services, which provides investment support, to $769k at the entity employing quants and technologists, to $23m each for partners at the investment firm.
The prospectus reveals that 90% of Citadel's pass-through expenses, paid by investors, are comprised of employee pay. Citadel's investors (who, confusingly, may also be employees themselves who then also pay expenses) presumably think the cost is worth it. Even after paying its people $17bn in compensation, Citadel generated returns for investors of $30bn during the 33-month period. Since its inception, Citadel has generated annualized returns of 19.5%, double the S&P 500 over the same period.
You get what you pay for. "Ken Griffin has created a great business. He uses those fees to build better facilities, to create the best systems and to hire the best people, then investors benefit," one macro portfolio manager told us last year.
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