Citadel will redeem about $500 million from Melvin Capital Management, according to a person familiar with the matter, scaling back its $2 billion January infusion into Gabe Plotkin’s hedge fund after the investment turned positive.
Citadel funds and firm partners plan to withdraw the money at the end of the third quarter, the person said. They made the investment, along with $750 million from Point72 Asset Management, in late January when Melvin’s short positions were under attack from retail traders on Reddit. In exchange, they received a three-year minority piece of its revenue. Citadel’s redemption won’t affect that arrangement.