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Citadel’s Griffin Ousts Edsparr in Strategy Dispute

Patrik Edsparr, who has left Citadel Investment Group
Patrik Edsparr, then chief executive officer of global securities at Citadel Investment Group, speaks during the 2010 Milken Institute Global Conference in Los Angeles, California, last week. Photographer: Jonathan Alcorn/Bloomberg

Patrik Edsparr, chief executive officer of Citadel Investment Group LLC’s securities unit, was asked to leave the firm, seven months after Ken Griffin picked him for the position.

“Regretfully, the management team and I did not see eye to eye with Patrik Edsparr on the corporate strategy we want to pursue, or the culture we want to cultivate in Citadel Securities,” Griffin said in a letter to employees yesterday. “As such, last week I asked Patrik to leave the firm, and we wish him well.”

Edsparr, 44, is the second CEO of the securities unit to leave since Griffin started the business. Rohit D’Souza, the former Merrill Lynch & Co. executive hired in October 2008 to build the investment bank, left a year later. Griffin is attempting to expand his Chicago-based firm, which oversees $12 billion in hedge funds, by underwriting and trading stocks and bonds and advising corporations on mergers and acquisitions.

Katie Spring, a spokeswoman for Citadel, confirmed the departure. Messages left at Edsparr’s office voicemail weren’t immediately returned.

Swedish-born Edsparr joined Citadel as global head of fixed income and head of the firm’s European business in July 2008. He was based in London.

‘Heated Discussions’

“We don’t see eye to eye on everything,” Edsparr said in a November 2009 interview of his relationship with Griffin. “We have heated discussions, but they mostly end on a constructive note.”

Edsparr, who has degrees in Russian, mathematics, business and finance, previously worked at JPMorgan Chase & Co., where he ran businesses including foreign exchange, securitized products and principal investments. He joined the New York-based bank in 1996.

Todd Kaplan, former head of investment banking at Citadel, left in January less than a year after joining the firm. The following month, he joined Bank of America Corp., which last year bought Merrill Lynch, where Kaplan had worked for 22 years. Peter Santoro, former head of institutional markets, left Citadel in December after a management reshuffle.

More than 50 bankers have joined Citadel’s securities unit, according to the letter.

“Citadel Securities is a rapidly growing, client-facing business that is best served by highly engaged, U.S.-based leadership,” Spring said in an e-mail.

Junk Bonds

Edsparr’s departure was previously reported today by the Wall Street Journal.

Citadel is trying to capitalize on record high-yield bond sales, with banks underwriting $104 billion of junk bonds in the U.S. this year. Citadel is ranked 25th in arranging high-yield bonds in the U.S., according to data compiled by Bloomberg.

The firm helped manage a $365 million notes offering for Atlanta-based Gray Television Inc. last month and a $425 million bond for Equinox Holdings Inc. in January, according to the Bloomberg data.

Citadel’s high-yield secondary market share is “firmly in the league of the ‘bulge bracket’ players,” according to the Griffin letter.

The firm also started a residential and commercial mortgage-backed securities division, the letter said.

“We did not embark on this initiative to be a middle-tier player,” Griffin said in the employee letter.

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