Key Takeaways
- • Kroll Bond Rating Agency (KBRA) assigned BBB Issuer ratings to three multi-strategy hedge funds: Kensington Global Strategies Ltd (KGSF), Kensington Global Strategies Fund II (KGSF II), Ltd, and Citadel Wellington LLC (Wellington).
- • KBRA assigned a BBB Senior Unsecured rating to $500 million of notes issued by Citadel Finance, LLC.
- • The notes are guaranteed on a several, but not joint, basis by KGSF II, Wellington, and KGSF Offshore Holdings Ltd, a wholly-owned subsidiary of KGSF.
- • The guarantor funds are managed by Citadel Advisors, LLC, the investment management subsidiary of Citadel Group, which manages over $35 billion in investment capital.
- • KBRA cited long-term performance track record, ability to attract and retain capital, top-tier talent, moderate historical volatility, and strong institutional risk and liquidity management as the basis for the ratings.
Summary
Kroll Bond Rating Agency (KBRA) has assigned BBB Issuer ratings to three multi-strategy hedge funds managed within the Citadel platform: Kensington Global Strategies Ltd (KGSF), Kensington Global Strategies Fund II (KGSF II), Ltd, and Citadel Wellington LLC (Wellington). According to the Business Wire release, KBRA also assigned a BBB Senior Unsecured rating to $500 million of notes issued by Citadel Finance, LLC.
The notes are guaranteed on a several, but not joint, basis by KGSF II, Wellington, and KGSF Offshore Holdings Ltd, a wholly-owned subsidiary of KGSF. The guarantor funds are managed by Citadel Advisors, LLC, the investment management subsidiary of Citadel Group. KBRA states that the ratings assigned to the notes take into account the guarantee from the funds.
Citadel Group, headquartered in Chicago, is described by KBRA as a global hedge fund with a 30-year track record and more than $35 billion in investment capital under management. The funds invest across a range of strategies including commodities, fixed income/global macro, credit, equities, and quantitative strategies. Wellington and the two Kensington funds dynamically allocate across all of Citadel's strategies, with a primary focus on liquid markets, including fundamental and systematic equities and global macro rates and currencies.
KBRA attributes the issuer ratings to the Citadel Group and the funds' long-term performance track record, their ability to attract and retain substantial investment capital, top-tier investment talent, moderate historical performance volatility, and strong institutional risk and liquidity management practices. The full rating report, which contains key credit considerations, sensitivity analyses and any ESG factors, is referenced in the release but was not reproduced in the announcement.
The notes are guaranteed on a several, but not joint, basis by KGSF II, Wellington, and KGSF Offshore Holdings Ltd, a wholly-owned subsidiary of KGSF. The guarantor funds are managed by Citadel Advisors, LLC, the investment management subsidiary of Citadel Group. KBRA states that the ratings assigned to the notes take into account the guarantee from the funds.
Citadel Group, headquartered in Chicago, is described by KBRA as a global hedge fund with a 30-year track record and more than $35 billion in investment capital under management. The funds invest across a range of strategies including commodities, fixed income/global macro, credit, equities, and quantitative strategies. Wellington and the two Kensington funds dynamically allocate across all of Citadel's strategies, with a primary focus on liquid markets, including fundamental and systematic equities and global macro rates and currencies.
KBRA attributes the issuer ratings to the Citadel Group and the funds' long-term performance track record, their ability to attract and retain substantial investment capital, top-tier investment talent, moderate historical performance volatility, and strong institutional risk and liquidity management practices. The full rating report, which contains key credit considerations, sensitivity analyses and any ESG factors, is referenced in the release but was not reproduced in the announcement.
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