After cutting losses and returning to investing, the "AI Stock God" hedge fund makes another move with a $400 million bet

Source: Global Market Bulletin

According to insiders, just days after the hedge fund Situational Awareness, led by “AI stock god” Leopold Aschenbrenner, was on the brink of collapse, he has already returned to the investment market, making a $400 million bet on a private company.

This investment was completed on Tuesday, offering an initial glimpse of how Aschenbrenner plans to recover. Last week, his hedge fund was pushed to the edge of collapse as Wall Street lenders issued numerous margin calls.

An insider revealed that prior to this investment, last month Situational Awareness invested $100 million in the same company. It remains unclear which company within Situational Awareness’s current private equity portfolio was the recipient of this additional capital.

Aschenbrenner’s experience last week was a roller coaster. The rapid shrinkage in the value of his holdings in listed tech stocks triggered margin calls from banks, plunging his fund into turmoil.

According to earlier reports, to raise funds for margin requirements, Aschenbrenner had briefly considered selling his stock positions in several private companies such as Anthropic, Fluidstack, and MatX.

He ultimately struck a deal with Citadel, led by Ken Griffin, selling most of his portfolio of listed company stocks. This allowed him to quickly recoup capital to pay the banks and protect his valuable private equity portfolio.

After the dust settled last Thursday, the assets of this startup had plummeted from $45 billion in early July to around $10 billion.

Aschenbrenner said in a letter to investors last Friday, “We took the necessary steps to get through the crisis. But our fund must always maintain its structure, so that even when we take losses, we can keep moving forward. I will do everything possible to make sure we learn the essential lessons from this episode.”

According to some insiders, unlike similarly sized hedge funds, most of Aschenbrenner’s investors are wealthy individuals and family offices from the San Francisco Bay Area.

Reportedly, these investors include Greenoaks founder Neil Mehta; founder of investment firm XN, Gaurav Kapadia; former head of listed equities at Tiger Global, Feroz Dewan; and D1 Capital Partners founder Dan Sundheim.

There are currently no signs of large-scale withdrawals.

“I am as fully invested as you are—almost all my own funds are in this fund—and I intend to work tirelessly to prove that this recent event can make me a wiser and stronger investor,” he wrote in the Friday letter.