DEVOURED
His Wedding Guests Were Arriving—Just as His $45 Billion Fund Was Falling Apart
Leopold Aschenbrenner’s $45 billion investment firm, which focused heavily on AI stocks, collapsed under debt pressure before Citadel acquired its public portfolio.
What: Twenty-four-year-old investor Leopold Aschenbrenner saw his $45 billion AI-focused investment fund unravel due to excessive leverage. Citadel purchased the majority of the firm's public stock at a discount of more than 10%, leaving the fund with roughly $10 billion in remaining assets.
Why it matters: The collapse illustrates the extreme risks of using heavy leverage to bet on the high-volatility AI sector, serving as a cautionary tale for fund managers during the current AI market correction.
Original article
Leopold Aschenbrenner had planned a multiday celebration for his wedding, but his fund started unraveling just when guests started to arrive. The 24-year-old investor had built a $45 billion investment powerhouse that primarily bought stocks in the AI trade. The firm borrowed too much money to make these AI bets, leaving it at risk as they faltered. Citadel then swooped in and purchased the vast majority of the firm's public stock portfolio at a discount of more than 10% to the market value of those shares. The firm is left with a portfolio of stocks and stakes in startups valued at more than $10 billion, but it is still alive.
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