Situational Awareness Fund Cuts 10% Discount Sale to Citadel

Leopold Aschenbrenner's fund sold public equities at a 10% discount to Citadel to meet margin calls, avoiding default after a 67% July loss.

Woofun AI reports that Leopold Aschenbrenner’s Situational Awareness fund faced margin calls from Goldman Sachs and Morgan Stanley in mid-July as stock prices declined. Hedge funds shorted the positions, creating a feedback loop of price drops and forced liquidations. During a wedding in Carmel, Aschenbrenner negotiated through the night, initially agreeing to sell $3.5 billion in Anthropic equity to a consortium led by Greenoaks and Sequoia.

However, he reversed this decision on July 30, opting to retain private holdings and sell public stocks instead. Citadel and Millennium negotiated with the team until after midnight, with Citadel ultimately purchasing most of the public equity portfolio at a discount exceeding 10% below market value. This transaction satisfied margin requirements and prevented formal default. On July 31, the fund confirmed a net loss of approximately 67% for July but an annual net increase of around 80%. Aschenbrenner stated he takes full responsibility, announced the complete removal of bank leverage, and plans to continue operations with adjusted portfolio management and risk teams.