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Citadel Hedge Fund to infuse $2.55 billion into E*Trade Could Hedge Funds rescue firms highly exposed in the real estate asset backed securities sector? Citadel Investment Corp has announced plans to infuse $2.55 billion into the troubled E*Trade, in an attempt to save the troubled firm from further losses in its real estate investments. Such investment comes at a critical time for E*Trade in view of its risky investments in the real estate asset backed securities sector. The massive investment by Citadel is also an effort to protect Citadel’s 17% stake in E*Trade, whose stock valuation had plummeted, loosing about 78% of its value since the beginning of 2007. Kenneth Griffin, Citadel’s manager is increasing Citadel’s bets on the credit market, Citadel has traditionally taken advantage of opportunities by investing in special events and companies in distress. "In the past year, Citadel made huge profits by buying a range of investments from two troubled companies; Sowood Capital and Amaranth LLC. The decision to infuse money into E*Trade was taken by Griffin at the door step of an airplane when another E*Trade manager, Joe Russell, Citadel's head of credit investments, called him to inform him of the huge losses in E*Trade share prices. According to published reports, Joe Russell stated,” We need to focus on this fast," Griffin then authorized for the purchased of $2.6 billion or 84% of E*Trade’s Asset backed securities. Citadel, which manages over $17 billion, also own a 17 percent stake in E*Trade, a New York based online order management and processing company. Some investment analysts predicted last month that E*Trade may be forced to seek protection under U.S bankruptcy laws, based on its real estate credit problems, such possibility may have now faded with Citadel investments. About Citadel
Citadel Investment Group, LLC is a privately owned hedge fund sponsor. The firm invests in the public equity, fixed income, credit, and options markets of the United States. It typically makes its investments in the U.S. convertibles, Japanese equity warrants, and European convertibles. The firm employs a relative-value, event-driven, and a fundamental approach to make its investments. Citadel Investment Group was founded in 1990 and is based in Chicago, Illinois with additional offices in New York; San Francisco, California; London; and Tokyo, Japan. Citadel is one of the largest Hedge Fund managers in the world, overseeing over $17 in total investor assets. Hedgefundexchange.net Staff Writer
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