Citadel Funds see 21 percent gains

Citadel Investment Group LLC, the $11 billion hedge-fund firm founded by Ken Griffin, gained 21 percent this year through May in its main funds as convertible bonds and stocks rose, a person familiar with the results said.

The Wellington and Kensington funds tumbled 55 percent in 2008. They will have to climb another 84 percent before Chicago-based Citadel can charge clients performance fees once again.

The funds returned 6 percent in May by making money across a range of strategies, including convertible bonds, stocks and bets on interest rates, said the person, who asked not to be named because the information is private.

Griffin, 40, declined to comment through a spokeswoman.

The Merrill Lynch All Convertibles Index climbed 19.5 percent through June 1. Stocks, as measured by the Standard & Poor's 500 Index, advanced 5.6 percent. The index jumped almost 40 percent since reaching a low on March 9.

Citadel suspended redemptions last year in the two funds. It said in February it will decide each quarter whether to make payments to investors seeking redemptions. It has yet to pay out any money to those clients.