UPDATE 2-Citadel banking head D'Souza abruptly leaves

* Citadel insiders say stronger operator was wanted

* Management change overshadows redemption resumption

* Kensington, Wellington funds up 57 percent year-to-date

* Citadel says open to large portfolio transactions

* Firm unlikely to again make investment like E*Trade (Recasts to lead with D'Souza departure; adds detail on investment bank and investor letter)

By Joseph A. Giannone

NEW YORK, Oct 29 (Reuters) - A year after he was hired to build a top-tier investment bank, Citadel Securities chief Rohit D'Souza abruptly left the hedge fund firm on Thursday.

Citadel confirmed the departure but declined to say why D'Souza was leaving. Patrik Edsparr, president of Citadel Europe and a former JPMorgan Chase & Co (JPM.N) executive, will take over the securities unit, a spokeswoman said.

Insiders at Citadel said D'Souza, formerly head of equity sales and trading at Merrill Lynch, did a good job building up the business, unique in the hedge fund world, and hiring 70 bankers and traders. Yet the firm wanted a strong operator to run the business going forward, these insiders said.