Key points
- JPMorgan ends its lending relationship
- Goldman, Citi and BofA remain active brokers
- The bank declined to comment
- Fund moved to Clear Street last week
JPMorgan Chase (JPM) has told Leopold Aschenbrenner's Situational Awareness that it will end its lending relationship with the fund, Reuters reported on Friday, citing a person familiar with the matter. The Financial Times reported the decision first, on September 11.
JPMorgan was one of the fund's three prime brokers through the July unwind. The other two were Goldman Sachs (GS) and Bank of America (BAC), and both remain active brokers for the fund, according to Reuters. Reuters also names Citigroup (C) as an active broker now. Citi was not one of the three prime brokers during the July unwind.
JPMorgan declined to comment. Situational Awareness did not respond to Reuters' request for comment. Neither report gives a date for when the relationship ends, and neither says how much credit the bank had extended.
What was actually reported
Reuters' headline and its body describe different things. Reuters headlined its story with the word "curbed," which describes a restriction. The body says JPMorgan "cut off lending activity" and "notified Situational that it would end its lending relationship after the losses." That is an ending, not a reduction.
The Financial Times and Reuters reported the decision separately, each citing unnamed sources.
What the report adds to the Clear Street move
Six weeks after the July losses, Situational Awareness started working with Clear Street and began rebuilding positions in AMD (AMD), Intel (INTC), SK Hynix, SanDisk (SNDK) and CoreWeave (CRWV). Clear Street was founded in 2018, is based in New York, and sells clearing, custody, financing and multi-asset trading.
The JPMorgan report adds context to the move to Clear Street, but it does not establish why the fund made it. No report says Situational Awareness moved because JPMorgan ended lending, and Aschenbrenner has separately told brokers the fund plans to use significantly less leverage.
The July losses
Situational Awareness lost roughly 67% of its value in July. It sold most of its public equity book, about $16 billion, to Citadel to meet margin calls. The fund kept around $10 billion in assets, including private holdings such as Anthropic, and removed its leverage. Ken Griffin has since told clients Citadel closed out more than 80% of the risk it took on.
What is not known
The size of JPMorgan's exposure has not been reported. Neither has the effective date, whether other credit lines were reduced at the same time, or whether the bank keeps any non-lending relationship with the fund. Prime brokerage covers several services, and lending is one of them. A bank can stop financing a client and continue to clear its trades.
Situational Awareness files quarterly 13Fs. Its next filing, covering September 30, is due in mid-November. That filing reports long positions in listed securities. It will not show what any bank is lending, so the credit side of this is unlikely to appear in a public document.
