Hedge fund IPO on tap?: Citadel sends another sign that it could be making the public jump

Citadel is making a move to separate its options market making operations from its hedge fund.  And that's leading to even more speculation that Ken Griffin's Chicago based fund is setting itself up for an IPO....

Citadel Derivatives Group LLC, the options specialist, and an offshore fund that trades the securities were split off at the start of the year, according to a regulatory filing. The move may make it easier for Chicago-based Citadel to sell shares in either business and ease concern that its hedge funds profit from ties to the options market maker, according to Josh Galper, a financial-services industry consultant.

``Legally, it makes it cleaner,'' Galper, managing principal at Vodia Group LLC in a Concord, Massachusetts, said in an interview. ``No one wants to be in a position where there is a suggestion that a proprietary hedge fund is trading against the order flow of retail clients.''

John Nagel, Citadel's deputy general counsel, said in an interview the changes were made for ``internal corporate purposes and efficiency reasons.'' Citadel has made similar organizational moves since 2000, Nagel said. He declined to comment on ``anything related'' to an IPO.

Citadel Splits Off Options Unit From Hedge Funds - Bloomberg