Hedge fund titan Griffin: The prosperity of multi-strategy hedge funds has come to an end.

Founder Ken Griffin, who runs one of the largest multi-strategy hedge funds Citadel, said that the era of explosive growth for multi-strategy hedge funds has ended. "That chapter is closed," said the founder of Citadel. "Today, the influx of assets into multi-strategy funds is basically a driving force." In recent years, these funds have also achieved stable returns during market volatility, thanks to the various investment strategies employed by their trading teams. They charge higher fees, spend a lot of money recruiting the best traders, and use borrowed money to bolster their positions, making them an influential force in the $4.5 trillion hedge fund industry. Since 2008, Citadel's capital has grown more than fivefold to $65 billion, while competitors Millennium Management's capital has also grown at the same rate to over $70 billion, and DE Shaw & Co.'s capital has surpassed $60 billion. Due to talent shortages and difficulties in leveraged investments, many top firms are no longer actively raising funds, weakening their ability to continue growing. Goldman Sachs reported that assets managed by multi-strategy hedge funds fell slightly to $366 billion this year, the first decline since 2016. In 2017, assets managed by such funds were only $134 billion. For Griffin, the growth trajectory is driven by the capital returns of investors (limited partners or LP). "Let's face it: because we return billions of dollars in capital to LPs every year. They want to put that money to work," Griffin said. Citadel regularly returns profits to control its size, having returned $25 billion to clients since 2017. Trump Trades In an industry known for confidentiality and reluctance to speak publicly, Griffin supports a low-tax, free-market agenda. According to campaign finance tracking organization OpenSecrets, he donated over $100 million to a pro-Republican political action committee in this presidential election, and predicted last month that Trump would win the presidential election. When asked about potential trades Trump could make over the next four years, Griffin predicted that companies that were previously heavily regulated will perform better. "The biggest shift is not in any specific company itself, but in the spirit of America being reignited." He predicted that under the new government leadership, companies will be willing to take more risks, build more factories, invest more in research and development, and invest more in long-term technologies to acquire new technology from customers. "This is the biggest change," Griffin added. "It will benefit all ships." Regarding the risks in the hedge fund industry, especially in "basis trading," Griffin stated that the market for this type of trading is much smaller now. This type of trading, favored by some of the world's largest hedge funds, aims to profit from tiny price differences between US Treasury bonds and derivatives (futures). The Financial Stability Board is considering a deeper investigation into these bets. Griffin said, "Basis trading is no longer being discussed. Price differentials between futures and bonds, especially in the US dollar market, have narrowed, and the amount of funds invested has also decreased."