Citadel Lifts Withdrawal Ban on Hedge Funds: Report

NEW YORK (TheStreet) -- Citadel Investment Group is lifting its 10-month ban on withdrawals from its hedge funds, according to a report by the Wall Street Journal.

After losing more than 50% in its flagship funds last year, Citadel faced demands from investors to withdraw about $1 billion, prompting Citadel to halt redemptions.

Initially, Citadel chose not to follow some other hedge funds that started to return funds as markets improved this year, but earlier this month Citadel's investors were allowed to take back a total of $250 million on a pro rata basis, the Journal reported.

Now the hedge fund group's gates are completely open for investors to pull out.

In a letter addressed to investors on Thursday, CEO Kenneth Griffin outlined some changes in strategy, including a greater focus on investments that are easier to exit, and more diversification in the portfolio, according to the Journal. The letter also mentioned that Citadel's two big funds, Wellington LLC and Kensington Global Strategies, were up about 57%.

Meanwhile, Citadel continues to diversify beyond hedge funds, with computer-driven high-frequency trading and, more recently, an investment bank. The Journal also noted a setback for the initiative, reporting that Citadel confirmed the departure of Rohit D'Souza, a former Merrill Lynch executive who was hired last October to help build the investment banking and brokerage businesses.