Citadel Expands Commodity Trading Operations to Australia

Citadel, the hedge fund firm led by Ken Griffin, is broadening its reach in the commodities market by launching operations in Australia. The firm has hired Keith Handbury, a senior trader from Shell Plc, who will assume the role of portfolio manager in Brisbane starting next month. Handbury will focus on trading electricity-related commercial paper and derivatives, as part of Citadel’s strategy to enhance its capabilities in the Asian commodities sector.

This move marks a significant step for Citadel, which manages approximately $68 billion in assets and has built one of the largest investment businesses in commodities over the past 23 years. The company has a global commodities trading group comprising more than 260 investment professionals and nearly 100 engineers operating out of 12 locations worldwide.

According to a source familiar with the situation, Handbury’s addition will be complemented by the hiring of an analyst in the same month, with plans for further team expansion. The firm’s focus is on assisting energy producers and consumers in managing risks across a variety of markets, including natural gas, power, environmental products, and weather.

Strategic Growth in Asia

Citadel’s expansion into Australia follows its initial foray into Asia, which began in Singapore. The firm has been actively recruiting talent in the region, notably hiring Hironao Sakata, the former head of Japan commodities sales at Morgan Stanley MUFG Securities Co., last year. Additionally, Citadel acquired Energy Grid Corp, a Tokyo-based company specializing in trading and selling power products, further enhancing its capabilities in this sector.

The competitive landscape in the Asia-Pacific region is intensifying. Other firms are also ramping up their activities in commodities trading. For instance, Balyasny Asset Management is reportedly looking to add portfolio managers to its natural gas and power team in Singapore. Similarly, Qube Research & Technologies has been actively hiring for the Australian power market.

Despite these advancements, Citadel declined to comment on the specifics of the hires or the expansion strategy in an emailed statement. Nonetheless, the firm’s aggressive approach signals its commitment to establishing a formidable presence in the Australian commodities market, which is expected to grow in significance in the coming years.

Overall, Citadel’s expansion reflects a broader trend of hedge funds and investment firms seeking to capitalize on opportunities in the dynamic commodities sector within Asia and beyond.