Citadel’s flagship Wellington fund gained 5.9% in July after the hedge fund purchased billions of dollars of AI related stocks from Leopold Aschenbrenner’s troubled Situational Awareness fund.

The monthly gain brought Wellington’s return for 2026 to 12%, according to people familiar with the results. Citadel manages approximately $71 billion in client assets.

Wellington had been roughly flat for July through July 24 as a sharp decline in semiconductor and AI related stocks weighed on hedge fund portfolios. The fund’s performance accelerated during the final days of the month following the acquisition of Situational Awareness’s positions.

Situational Awareness had generated a 439% return from the beginning of the year through June using leveraged bets on AI companies. The strategy reversed sharply in July, with the fund falling around 67% as several of its largest positions declined and pressure from lenders increased.

The fund subsequently sold most of its roughly $16 billion public equity portfolio to Citadel through a process completed in less than 24 hours. Citadel acquired some of the positions at a discount of more than 10%.

Citadel competed with Jane Street and Millennium Management for the portfolio before securing the transaction. Ken Griffin and other senior Citadel executives worked through the night to structure the deal, according to people familiar with the matter.

Several banks, including Goldman Sachs, JPMorgan, Bank of America, and Citigroup, helped facilitate the sale. Citadel acquired the portion of the portfolio financed through broker leverage, while Situational Awareness retained a smaller collection of public and private holdings, including its investment in Anthropic.

Some of Situational Awareness’s previously disclosed holdings recovered after the transaction. SanDisk gained nearly 30% from the Wednesday before the results were reported, while other AI related names also rebounded as forced selling pressure eased.

Citadel recorded gains across its other major strategies during July. Its tactical trading fund rose approximately 11%, while its stock focused equities fund advanced 14.2%. Both funds were up about 27% for the year.

The results contrasted with losses across several hedge funds exposed to the AI stock decline. Funds holding leveraged positions in chipmakers and other technology companies recorded double digit declines as falling prices triggered portfolio reductions and margin pressure.

Citadel has previously acquired portfolios from distressed investment firms. The company purchased positions from Amaranth Advisors following its collapse in 2006 and acquired assets from Sowood Capital Management the following year.