Overview
Citadel, the Miami-based hedge fund run by Ken Griffin, is broadening its commodities activity to include industrial metals as metal prices from copper to tin climb to record levels. According to a report from Bloomberg News, the firm has brought on Ylan Adler as a portfolio manager with a cross-commodities mandate that will significantly include metals, people familiar with the matter said.
Strategic shift
This hiring represents a notable directional change for Citadel. The fund has been active in precious metals for several years but historically avoided industrial, or base, metals. The source material indicates Citadel had regarded markets for base metals such as copper and zinc as offering limited opportunity and presenting stiff competition from established trading houses that also own producing assets.
Competitors named in the report include Glencore Plc and Trafigura Group, both of which operate large-scale production and trading platforms in the base metals space. Citadel's former reluctance to enter these markets reflected the perceived challenges posed by such incumbent producers and traders.
Commodities performance and focus
Citadel's commodities business has been a substantial profit center. The firm generated approximately $8 billion in commodities-related profits in 2022. That track record has spurred increased commodity hiring across the industry, even as Citadel itself had until recently concentrated on energy markets. The firm has become one of the largest physical gas traders in the United States.
While the recruitment of Adler is described as modest in scale relative to the large hiring campaigns of some rivals, the appointment signals Citadel's readiness to participate more directly in metals trading. The move aligns Citadel with a wider industry pattern of growing interest in metals trading during the present market boom.
What is known and what is not
The information regarding the hire and the mandate comes from people familiar with the matter, as cited in the Bloomberg report. The report frames Adler's role as a cross-commodities portfolio manager with a significant metals component, but it does not provide further operational details about positioning, capital allocation, or specific trading strategies.
Citadel's pivot into industrial metals occurs against a backdrop of record-high prices for several base metals, but the report does not specify how large a share metals will take within the firm's overall commodities portfolio.