Citadel acquires Sowood portfolio

Citadel Investment Group LLC, one of the world's largest hedge funds, agreed to take over the credit portfolio of Sowood Capital Management LP. The move comes as the Sowood, a Boston-based alternative asset manager has suffered losses from the recent subprime mortgage debacle. "This transaction provides for an orderly transference of risk between the parties," said Kenneth Griffin, Citadel's president and chief executive, according to a statement. "Moreover, we appreciate the professional manner in which the Sowood team handled this complex transaction from start to finish." Sowood, which has more than $3 billion in assets, has lost roughly 10% in the credit markets this year, according to reports in the New York Times and The Wall Street Journal. The company was founded by Jeff Larson, a former investment manager at Harvard University's endowment, Chicago-based Citadel manages $14 billion in assets and launched an initial public offering in January. .