Citadel Hires Richard Schimel to Run New Stock Trading Unit

  • Joins as Citadel's Griffin expands to take on volatile markets
  • Schimel expects to have six to eight stock teams in first year

Billionaire Ken Griffin is hiring former Diamondback Capital Management co-founder Richard Schimel to run a new equity unit as Citadel expands its stock business to better navigate less liquid and more volatile markets.

Schimel said he will join Citadel in early July after he closes his $250 million Sterling Ridge Capital Management, the firm he’s been running since late 2013 after shutting Diamondback.

The Greenwich, Connecticut-based unit will be the fourth equity business at Citadel. The others -- Global Equities, Surveyor and Ravelin -- account for about half the capital of the $23.5 billion firm, according to a person familiar with the matter. Volatility has been elevated in U.S. equities markets since the third quarter, when the S&P 500 tumbled into its first correction since 2011.

“Ken has said his focus will continue to be on liquid assets,” given greater illiquidity and volatility in the markets, Schimel said in a telephone interview. “There’s a lot of talent out there and this is a great opportunity to build a platform.”

Schimel expects the unit to have six to eight teams of seven to nine people within the first year across all sectors including technology, finance and energy. It will use the same market-neutral approach to investing as Citadel’s other equity units and will feed into Citadel’s main Kensington and Wellington funds, which have fallen about 6.5 percent this year through mid-April, according to an investor.

The yet unnamed unit allows Citadel to expand to another locale. It currently has stock trading offices in San Francisco, Chicago, New York, Dallas, Boston and London.

Schimel co-founded Diamondback in 2005, which at its peak managed $5.8 billion. Like Citadel, it used a team approach. Diamondback closed after it was among hedge funds raided in a U.S. investigation of insider trading on Wall Street. The government refunded a fine that the firm paid to settle regulators’ claims.

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