Situational Awareness liquidated leveraged positions at steep discounts after prime brokers demanded collateral amid a 35% market drop.
Leopold Aschenbrenner’s hedge fund, Situational Awareness, shed $35 billion in assets after prime brokers issued margin calls, forcing a fire sale of its public holdings to Citadel. The fund’s assets plunged from $45 billion to $10 billion in days as leveraged bets on AI infrastructure stocks collapsed.
The fund had used up to 400% leverage and held positions in SK Hynix, CoreWeave, and other AI-related stocks, which fell over 35% this month. Prior to July, the fund had surged over 1,000% since its July 2024 inception, with two-thirds of its portfolio in public equities and the remainder in private holdings like Anthropic.
Bank of America, Goldman Sachs, and JPMorgan Chase worked with the fund to meet margin requirements before the sale. Citadel acquired the positions at below-market prices, according to details of the transaction.