We recently published an article titled Top 12 Stocks to Buy According to Citadel Investment Group. In this article, we are going to take a look at where Arthur J. Gallagher & Co. (NYSE:AJG) stands against the other stocks.
Citadel Investment Group was officially founded by Ken Griffin on November 1, 1990, with $4.2 million in assets under management. By the end of 2013, the fund had expanded to $16 billion, a remarkable growth driven by a combination of advanced computer algorithms, complex financial models, and a highly secretive approach in its initial years. Griffin was an early adopter of quantitative, technology-driven investment strategies, implementing sophisticated methods long before many firms had even integrated basic digital tools. His reliance on cutting-edge technology and data-driven decision-making positioned Citadel as a leader in the hedge fund industry, setting it apart from traditional investment firms. As of Q4 2024, it holds approximately $577.87 billion in 13F securities in its highly diversified portfolio.
Known more commonly as Ken Griffin, Kenneth Cordele Griffin was born in 1968. His interest in finance began early, and while still a student, he started investing from his Harvard dorm room. In 1986, he launched a small hedge fund that leveraged emerging quantitative analytics to guide investment decisions. A year after he earned a Bachelor of Arts with Honors in Economics from Harvard College in 1989, Griffin founded Citadel, which has since become one of the world’s most successful alternative investment firms. In addition to leading Citadel, Griffin serves as the Founder and Non-Executive Chairman of Citadel Securities, a major global market maker.
Citadel was built on the principle that exceptional talent, combined with advanced quantitative analytics and powerful technology, could unlock significant opportunities in capital markets. The firm’s culture emphasizes continuous learning, innovation, and meritocracy, earning it a reputation as one of the best places to work on Wall Street. Today, Citadel manages over $60 billion in investment capital, consistently ranking among the most profitable hedge funds worldwide. Its success has benefited a range of institutional investors, including pension funds, university endowments, hospital systems, and foundations, contributing to impactful advancements in fields such as medical research and scientific discovery.
Citadel Investment Group employs a diverse range of investment strategies, with a strong focus on fixed income, macro, and quantitative trading. Its fixed income and macro strategy, one of the firm’s longest-running approaches, targets interest rate swaps, sovereign bonds, inflation, currencies, emerging markets, equities, commodities, and credit. By leveraging macro and relative value strategies, the firm integrates quantitative modeling, deep macroeconomic insights, and monetary policy expertise to identify opportunities. The research and trading teams work collaboratively, applying both qualitative and quantitative analysis to generate and refine investment ideas.
Additionally, Citadel’s Global Quantitative Strategies (GQS), established in 2012, has rapidly grown into a major force in the industry. Utilizing advanced statistical and quantitative modeling techniques, its agile teams of researchers, engineers, and traders develop and execute investment strategies with precision. Specialization, collaboration, and centralized operations drive efficiency, allowing the firm to run complex strategies at scale. By combining cutting-edge technology with deep expertise, Citadel continues to expand its capabilities and strengthen its competitive position in global markets.
Beyond finance, Griffin has made a profound impact through philanthropy, donating over $2 billion to education, healthcare, and social initiatives. His philanthropic efforts, now coordinated through Griffin Catalyst, have expanded educational access, strengthened medical and research institutions, and supported cultural organizations. His strategic insights also played a key role in the development of Operation Warp Speed, accelerating COVID-19 vaccine distribution. Whether in business or philanthropy, Griffin’s commitment to data-driven decision-making and transformative impact remains a defining characteristic of his career.
Our Methodology
The stocks discussed below were picked from Citadel Investment Group’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An insurance broker talking to a client, demonstrating the trust of their services.
Arthur J. Gallagher & Co. (NYSE:AJG)
Number of Hedge Fund Holders as of Q4: 77
Citadel Investment Group’s Equity Stake: $682.74 Million
An American insurance brokerage and risk management firm headquartered in Rolling Meadows, Illinois, Arthur J. Gallagher & Co. (NYSE:AJG) was established in 1927. With over 56,000 employees and providing services in more than 130 countries, it is one of the largest insurance brokers in the world.
Arthur J. Gallagher & Co. (NYSE:AJG) reported total revenue of $2.68 billion for Q4 2024, falling slightly short of analysts’ expectations of $2.69 billion. However, the company’s adjusted net earnings surged to $491.2 million, a notable increase from $402.4 million in the same period the previous year. Adjusted earnings per share (EPS) reached $2.13, significantly surpassing the projected $1.35. This strong financial performance highlights the company’s ability to maintain growth despite expenses related to acquisitions and workforce adjustments.
The brokerage segment saw a 12% year-over-year revenue increase, reaching $2.3 billion, underscoring Arthur J. Gallagher & Co. (NYSE:AJG)’s expanding market presence and service capabilities. The risk management division also demonstrated steady growth, with revenue climbing to $369.4 million, compared to $340.4 million in Q4 2023.
Arthur J. Gallagher & Co. (NYSE:AJG) continued its aggressive expansion strategy, completing 20 acquisitions in Q4 2024, adding an estimated annualized revenue of $387 million. Notably, its acquisition of AssuredPartners is expected to strengthen its market position further. Chairman and CEO J. Patrick Gallagher, Jr. emphasized the company’s sustained success, marking its 16th consecutive quarter of double-digit revenue growth, with organic revenue increasing by 7%. With a solid balance sheet and a clear focus on expansion, the company remains well-positioned for continued growth in the insurance brokerage industry.
By the end of Q4 2024, Citadel Investment Group significantly boosted its stake in Arthur J. Gallagher & Co. (NYSE:AJG), increasing its holdings to over 2.4 million shares—a substantial jump from 29,786 shares in Q3, representing a 7,976% rise. This investment is now valued at nearly $682.74 million. Data from Insider Monkey shows that 77 out of 1,009 hedge funds held positions in the company by the close of Q4, with total holdings valued at nearly $4.47 billion, up from 44 funds in the previous quarter.
Overall AJG ranks 8th on our list of the top stocks to buy according to Citadel Investment Group. While we acknowledge the potential for AJG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AJG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
