Kenneth C. Griffin
Encyclopedia
Kenneth C. Griffin is an American
hedge fund
manager. He is the founder
and CEO of Citadel LLC, a Chicago
-based investment firm. Citadel's group of hedge funds rank amongst the largest and most successful hedge funds in the world, and Griffin has earned several billion dollars during his tenure at the company.
As of 2011, he has an estimated net worth of $2.3 billion.
For several years, Griffin avoided extensive press coverage in a manner similar to other hedge fund managers such as billionaire Steven A. Cohen
. As Citadel grew, he agreed that the firm would benefit from broader exposure. In 2001, the first in-depth write-up featured Griffin on the front cover of Institutional Investor magazine, with the tag line "Just 32, he wants to run the world's biggest and best hedge fund. He's nearly there."
More recently, Griffin has adopted a significantly more prominent media profile, appearing as the subject of a Bloomberg magazine cover story, and discussing his art purchases, charitable contributions and political interests in a New York Times interview. In May 2008, he criticised the risk management practices of Wall Street saying: “As an industry, we have a responsibility to manage risk in a way that is prudent... Walk across any of the trading floors -- they are full of 29-year-old-kids. The capital markets are controlled by a bunch of right-out-of business school young guys who haven't really seen that much. You have a real lack of wisdom”. "We, as an industry, dropped the ball. The industry needs to overhaul its thinking, accept greater regulation."
With an estimated $13 billion (down from an estimated $20 billion previously) in assets under management
, Citadel remains one of the world's largest hedge funds and its daily trading volume amounts to approximately 3% of average daily trading activity in London
, New York
, and Tokyo
.
, he started two funds from his dorm room, and he claims that in between classes he would make trades. He even installed a special satellite link to his dorm to acquire real-time market data. After graduating with a degree in economics
, he won the attention of an investor named Frank C. Meyer, founder of Glenwood Capital https://www.citadelgroup.com/careers/about_citadel/our_history.htm. Meyer was amazed at Griffin's success and rate of return with his investments (which at the time were largely based on convertible bond
s), and provided a relatively small investment for Griffin to invest ($1 million) http://www.forbes.com/lists/2006/10/BHED.html. Griffin exceeded Meyer's expectations, and as word of his strong performance spread, investors were persuaded to back Griffin. In a video interview on Opalesque.TV Meyer describes the keys of seeding new managers, as he did with Griffin. He says that all managers have strengths and weaknesses. The key for seeders is to identify and evaluate how managers compensate for their weaknesses by respecting parts of the business that the they don't know well. That breadth is as critical to success as paying attention to areas that the manager does know.
Citadel was officially founded Nov. 1, 1990 with $4.2 million; the name "Citadel" was chosen to suggest strength in times of volatility http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk. With Citadel quickly growing, it began to perform well.
For those who invested, huge rewards followed which Griffin attributed to his exceptional investment skills. Specifically, annual performance has been in excess of 20 percent since 1998. http://www.portfolio.com/executives/features/2007/03/29/Opening-Up-the-Citadel?page=0 Griffin sought to utilise his own quantitative and numerical skills within Citadel. The firm has attracted mathematicians, physicists, engineers, investment analysts, advanced computer technology, and expects a high level of confidentiality.
After it became known in 2006 that Citadel would be the first hedge fund
manager to issue publicly traded debt bonds
, the Financial Times
speculated that Kenneth Griffin may now be "the most feared man on Wall Street
" http://www.financialnews-us.com/?page=uspeoplemoves&contentid=1046717350.
His first appearance on the Forbes 400
was in 2003, with an estimated net worth of $650 million. At 34, he was the second youngest on the list (Ziff Davis
heir Daniel Ziff was the youngest). In September 2004, Fortune Magazine ranked Griffin, who was 35 that year, as the eighth richest American under forty in the category of self-made, US
based wealth http://www.thestreet.com/_yahoo/tech/georgemannes/10194349.html. Griffin was not yet a billionaire
; his net worth
was estimated at $825 million http://www.forbes.com/lists/results.jhtml?passListId=54&passYear=2004&passListType=Person&searchParameter1=unset&searchParameter2=unset&resultsHowMany=25&resultsSortProperties=-numberfield3%2C-numberfield2&resultsSortCategoryName=Age&fromColumnClick=true&bktDisplayField=&bktDisplayFieldLength=&category1=category&category2=category&passKeyword=&resultsStart=376. In 2006 Griffin was the 5th youngest of only seven members of the Forbes 400
under the age of 40 http://www.forbes.com/lists/2006/54/biz_06rich400_The-400-Richest-Americans_Age.html.
His 2004 compensation was reportedly $240 million http://www.institutionalinvestor.com/pdf/pressRoom/presscoverage/independent_alpha_052805.pdf, slightly higher than his 2003 compensation ($230 million) http://www.newsmax.com/archives/ic/2004/7/20/173813.shtml. His 2005 compensation was ranked 13th at $210 million http://translate.google.com/translate?hl=en&sl=es&u=http://buyorsell.es/%3Fcat%3D11&sa=X&oi=translate&resnum=9&ct=result&prev=/search%3Fq%3Dcitadel%2Binvestment%2Bgroup%2Bkenneth%2Bgriffin%26start%3D190%26hl%3Den%26lr%3D%26sa%3DN among the top 25 highest paid hedge fund
managers http://www.finfacts.com/irelandbusinessnews/publish/article_10005996.shtml. Reflecting the strong investment performance of his funds, Griffin is reported to have taken home $1.7bn in 2006 and $2.8bn in 2007, of which salary was estimated to reach $1.5 billion in 2007. In addition, he resides in a $6.9 million penthouse in Chicago
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, the Financial Times
compiled an "alternative rich list" that titled Griffin as the "most precocious" on the list http://www.ft.com/cms/s/92d94ba6-24e4-11d8-81c6-08209b00dd01,gaid=060922005460.html, and Fortune Magazine called Griffin "the youngest of the rich hedge fund managers" http://money.cnn.com/magazines/fortune/fortune_archive/2004/09/20/381152/index.htm.
As of 2007, Griffin was the 117th richest American with an estimated net worth of $3 billion. http://www.forbes.com/lists/2007/54/richlist07_Kenneth-Griffin_BHED.html
of Third Point.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss One such hire made by Griffin prompted Mr. Loeb to pen a widely circulated letter stating: "Let me be clear that under no circumstances are you to approach any Third Point employees or attempt to offer them jobs... My warning extends to any attempt you may make to hire employees of my friends in the event driven space: should you attempt to hire people from them I will consider it a similar act of war. My friends' enemies become my enemies." Despite Loeb’s aggressive letter, many other hedge fund managers supported Griffin and his recruitment strategy, often admitting he is able to offer more competitive benefits due to the success of Citadel. David Einhorn, manager of Greenlight, went so far as to extend best wishes to the employee who joined Citadel.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss
In 2005, at a presentation to Goldman Sachs http://web.archive.org/web/20070927215921/http://www.gs.com/our_firm/our_culture/corporate_citizenship/gmi/images/GMI_Panels/Griffin_paper.pdf, Griffin spoke favourably of credit derivatives. "The market for credit derivatives has effectively created a huge new pool of risk-taking capital for our debt markets. By unbundling and trading credit risk without having to transfer the underlying asset, this market has introduced an entirely new and vital way of spreading risk. Credit derivatives, to use one example,
let banks transfer risk from their portfolios, allowing them to create new loans. They also provide price transparency into instruments that might otherwise be hard to value. This represents an enormous improvement in our financial system – but one that could not have occurred without the innovation that competitive market dynamics trigger." Subsequent events have led some market observers to question the accuracy of this perspective. http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx
Three years later, Griffin testified to the House Committee on Oversight and Government Reform, stating that "[t]he rapid growth in the use of derivatives has created an opaque market whose outstanding notional value is measured in the hundreds of trillions of dollars. As a result, there is great concern about the systemic effects of the failure of anyone financial institution." http://oversight.house.gov/documents/20081113120556.pdf
In 2008, in common with many hedge funds, the performance of several of Citadel's key funds including its Kensington and Wellington funds was down 35% in the year to October.
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk http://www.artnet.com/Magazine/news/artnetnews2/artnetnews5-19-05.asp, although another source reported that the painting was sold to a member of the Whitney family
http://www.chiff.com/a/painting-top-ten.htm. In October 2006, Griffin purchased “False Start” by artist Jasper Johns
for $80 million from Dreamworks
co-founder David Geffen
http://www.nytimes.com/2006/10/12/arts/design/12geff.html?em&ex=1160798400&en=c01ce625884089d1&ei=5087%0A; in the same month he also donated $19 million to the Art Institute of Chicago http://www.belleville.com/mld/belleville/news/state/15742536.htm. A painting by Cézanne
and a bronze sculpture by Edgar Degas
, both owned by Griffin, are on display at the Institute
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, Kenneth and Anne Griffin were included by Art News in the magazine's ranking of the ten most active art collectors in the world http://www.findarticles.com/p/articles/mi_qn4155/is_20040709/ai_n12551632.
organizations http://burgenstock.sfoa.org/2004/GriffinKen.htm. As a director of the Chicago Public Education Fund, he has stated, "The long term success of our country depends on the success of our public schools" http://www.cpef.org/nm_video.htm#. In 2003, Griffin was the recipient of the ARK award for his philanthropy http://www.arkonline.org/resources/Press%20Release%20-%2014.05.2003.pdf. In October 2006, the Griffins and the Bill and Melinda Gates Foundation opened a new charter school in Chicago
called Woodlawn High School http://chronicle.uchicago.edu/061005/woodlawn.shtml. Griffin's foundation, Citadel Group Foundation, has contributed to the Art Institute of Chicago, public education
http://www.cpef.org/p-10-million-goal.htm, the Children's Memorial Hospital in Chicago http://www.childrensmemorial.org/friends/foundation/corpgivingcircleofcorporatechampions.asp and the Chicago Symphony Orchestra http://www.cso.org/main.taf?p=12,8,4. Griffin has also made contributions to the Robin Hood Foundation http://www.forbes.com/2003/09/18/cz_mm_0918robinhood400s.html and has served on the committee for the Wall Street Poker Night Tournament, a philanthropic event http://www.mathforamerica.org/downloads/MFA_042106.pdf.
In October 2009 Griffin and his wife founded the Kenneth and Anne Griffin Foundation, donating $10 million for the Griffin Early Childhood Center and $16 million to Children's Memorial Hospital, among other contributions.
The Griffin Early Childhood Center, located in Chicago Heights, is an experimental educational effort run by John List
, a University of Chicago economics professor, designed to test whether investing in teachers, or alternatively, in parents, produces better student performance in school.
http://www.eurasiagroup.net/about/index_people.php, the political risk consultancy, and on the Committee on Capital Markets Regulation
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/09-12-2006/0004430851&EDATE=. He has also been a member of the G100, a group of 100 CEOs that meets twice a year http://g100.com/pdf/g100_brochure.pdf.
In July 2004, Griffin married Anne Dias-Griffin
in Versailles
http://www.timesonline.co.uk/article/0,,2095-1612477,00.html (the New York Times, however, reported the wedding occurred in 2003 http://www.nytimes.com/2006/11/22/business/22hedge.html?ref=business). Dias is the founder of Aragon Global Management, another Chicago-based hedge fund firm http://www.chibus.com/user/index.cfm?event=displayRegistrationPrompt&thereferer=http%3A//www.chibus.com/media/storage/paper408/news/2005/10/27/GsbNews/Cwibs.Annual.Fall.Conference-1036676.shtml%3Fnorewrite200604031456%26sourcedomain%3Dwww.chibus.com. They have one son.
In June 2002, Griffin was included in CFO Magazine's Global 100, a list of the most influential people in the world of finance
http://www.cfo.com/article.cfm/3005024. In June 2005, Griffin commented that the economic and political climate in Russia
was now favorable for investors http://web.archive.org/web/20060324040309/http://www.mosnews.com/money/2005/06/28/investors.shtml. Griffin has also expressed his belief in the potential of electronic stock exchange
s over floor-based ones http://burgenstock.sfoa.org/2004/documents/review_2004.pdf. Griffin has also commented on the need for clear rules from the SEC
regarding market timing
and redemption fees http://blogalization.nu/marketmachines/writing/at-harvard-hard-words-on-new-rules/. Griffin’s views on regulation and risk played out in a 2008 New York Times article where he was quoted, “’The unwillingness of the Federal Reserve and the S.E.C. to require working capital limits,’ he said, only exacerbates the risk-taking environment because the banks are playing the equivalent of no-limit poker”.
) is an American
hedge fund
manager. He is the founder
and CEO of Citadel LLC, a Chicago
-based investment firm. Citadel's group of hedge funds rank amongst the largest and most successful hedge funds in the world, and Griffin has earned several billion dollars during his tenure at the company.
As of 2011, he has an estimated net worth of $2.3 billion.
For several years, Griffin avoided extensive press coverage in a manner similar to other hedge fund managers such as billionaire Steven A. Cohen
. As Citadel grew, he agreed that the firm would benefit from broader exposure. In 2001, the first in-depth write-up featured Griffin on the front cover of Institutional Investor magazine, with the tag line "Just 32, he wants to run the world's biggest and best hedge fund. He's nearly there."
More recently, Griffin has adopted a significantly more prominent media profile, appearing as the subject of a Bloomberg magazine cover story, and discussing his art purchases, charitable contributions and political interests in a New York Times interview. In May 2008, he criticised the risk management practices of Wall Street saying: “As an industry, we have a responsibility to manage risk in a way that is prudent... Walk across any of the trading floors -- they are full of 29-year-old-kids. The capital markets are controlled by a bunch of right-out-of business school young guys who haven't really seen that much. You have a real lack of wisdom”. "We, as an industry, dropped the ball. The industry needs to overhaul its thinking, accept greater regulation."
With an estimated $13 billion (down from an estimated $20 billion previously) in assets under management
, Citadel remains one of the world's largest hedge funds and its daily trading volume amounts to approximately 3% of average daily trading activity in London
, New York
, and Tokyo
.
, he started two funds from his dorm room, and he claims that in between classes he would make trades. He even installed a special satellite link to his dorm to acquire real-time market data. After graduating with a degree in economics
, he won the attention of an investor named Frank C. Meyer, founder of Glenwood Capital https://www.citadelgroup.com/careers/about_citadel/our_history.htm. Meyer was amazed at Griffin's success and rate of return with his investments (which at the time were largely based on convertible bond
s), and provided a relatively small investment for Griffin to invest ($1 million) http://www.forbes.com/lists/2006/10/BHED.html. Griffin exceeded Meyer's expectations, and as word of his strong performance spread, investors were persuaded to back Griffin. In a video interview on Opalesque.TV Meyer describes the keys of seeding new managers, as he did with Griffin. He says that all managers have strengths and weaknesses. The key for seeders is to identify and evaluate how managers compensate for their weaknesses by respecting parts of the business that the they don't know well. That breadth is as critical to success as paying attention to areas that the manager does know.
Citadel was officially founded Nov. 1, 1990 with $4.2 million; the name "Citadel" was chosen to suggest strength in times of volatility http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk. With Citadel quickly growing, it began to perform well.
For those who invested, huge rewards followed which Griffin attributed to his exceptional investment skills. Specifically, annual performance has been in excess of 20 percent since 1998. http://www.portfolio.com/executives/features/2007/03/29/Opening-Up-the-Citadel?page=0 Griffin sought to utilise his own quantitative and numerical skills within Citadel. The firm has attracted mathematicians, physicists, engineers, investment analysts, advanced computer technology, and expects a high level of confidentiality.
After it became known in 2006 that Citadel would be the first hedge fund
manager to issue publicly traded debt bonds
, the Financial Times
speculated that Kenneth Griffin may now be "the most feared man on Wall Street
" http://www.financialnews-us.com/?page=uspeoplemoves&contentid=1046717350.
His first appearance on the Forbes 400
was in 2003, with an estimated net worth of $650 million. At 34, he was the second youngest on the list (Ziff Davis
heir Daniel Ziff was the youngest). In September 2004, Fortune Magazine ranked Griffin, who was 35 that year, as the eighth richest American under forty in the category of self-made, US
based wealth http://www.thestreet.com/_yahoo/tech/georgemannes/10194349.html. Griffin was not yet a billionaire
; his net worth
was estimated at $825 million http://www.forbes.com/lists/results.jhtml?passListId=54&passYear=2004&passListType=Person&searchParameter1=unset&searchParameter2=unset&resultsHowMany=25&resultsSortProperties=-numberfield3%2C-numberfield2&resultsSortCategoryName=Age&fromColumnClick=true&bktDisplayField=&bktDisplayFieldLength=&category1=category&category2=category&passKeyword=&resultsStart=376. In 2006 Griffin was the 5th youngest of only seven members of the Forbes 400
under the age of 40 http://www.forbes.com/lists/2006/54/biz_06rich400_The-400-Richest-Americans_Age.html.
His 2004 compensation was reportedly $240 million http://www.institutionalinvestor.com/pdf/pressRoom/presscoverage/independent_alpha_052805.pdf, slightly higher than his 2003 compensation ($230 million) http://www.newsmax.com/archives/ic/2004/7/20/173813.shtml. His 2005 compensation was ranked 13th at $210 million http://translate.google.com/translate?hl=en&sl=es&u=http://buyorsell.es/%3Fcat%3D11&sa=X&oi=translate&resnum=9&ct=result&prev=/search%3Fq%3Dcitadel%2Binvestment%2Bgroup%2Bkenneth%2Bgriffin%26start%3D190%26hl%3Den%26lr%3D%26sa%3DN among the top 25 highest paid hedge fund
managers http://www.finfacts.com/irelandbusinessnews/publish/article_10005996.shtml. Reflecting the strong investment performance of his funds, Griffin is reported to have taken home $1.7bn in 2006 and $2.8bn in 2007, of which salary was estimated to reach $1.5 billion in 2007. In addition, he resides in a $6.9 million penthouse in Chicago
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, the Financial Times
compiled an "alternative rich list" that titled Griffin as the "most precocious" on the list http://www.ft.com/cms/s/92d94ba6-24e4-11d8-81c6-08209b00dd01,gaid=060922005460.html, and Fortune Magazine called Griffin "the youngest of the rich hedge fund managers" http://money.cnn.com/magazines/fortune/fortune_archive/2004/09/20/381152/index.htm.
As of 2007, Griffin was the 117th richest American with an estimated net worth of $3 billion. http://www.forbes.com/lists/2007/54/richlist07_Kenneth-Griffin_BHED.html
of Third Point.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss One such hire made by Griffin prompted Mr. Loeb to pen a widely circulated letter stating: "Let me be clear that under no circumstances are you to approach any Third Point employees or attempt to offer them jobs... My warning extends to any attempt you may make to hire employees of my friends in the event driven space: should you attempt to hire people from them I will consider it a similar act of war. My friends' enemies become my enemies." Despite Loeb’s aggressive letter, many other hedge fund managers supported Griffin and his recruitment strategy, often admitting he is able to offer more competitive benefits due to the success of Citadel. David Einhorn, manager of Greenlight, went so far as to extend best wishes to the employee who joined Citadel.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss
In 2005, at a presentation to Goldman Sachs http://web.archive.org/web/20070927215921/http://www.gs.com/our_firm/our_culture/corporate_citizenship/gmi/images/GMI_Panels/Griffin_paper.pdf, Griffin spoke favourably of credit derivatives. "The market for credit derivatives has effectively created a huge new pool of risk-taking capital for our debt markets. By unbundling and trading credit risk without having to transfer the underlying asset, this market has introduced an entirely new and vital way of spreading risk. Credit derivatives, to use one example,
let banks transfer risk from their portfolios, allowing them to create new loans. They also provide price transparency into instruments that might otherwise be hard to value. This represents an enormous improvement in our financial system – but one that could not have occurred without the innovation that competitive market dynamics trigger." Subsequent events have led some market observers to question the accuracy of this perspective. http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx
Three years later, Griffin testified to the House Committee on Oversight and Government Reform, stating that "[t]he rapid growth in the use of derivatives has created an opaque market whose outstanding notional value is measured in the hundreds of trillions of dollars. As a result, there is great concern about the systemic effects of the failure of anyone financial institution." http://oversight.house.gov/documents/20081113120556.pdf
In 2008, in common with many hedge funds, the performance of several of Citadel's key funds including its Kensington and Wellington funds was down 35% in the year to October.
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk http://www.artnet.com/Magazine/news/artnetnews2/artnetnews5-19-05.asp, although another source reported that the painting was sold to a member of the Whitney family
http://www.chiff.com/a/painting-top-ten.htm. In October 2006, Griffin purchased “False Start” by artist Jasper Johns
for $80 million from Dreamworks
co-founder David Geffen
http://www.nytimes.com/2006/10/12/arts/design/12geff.html?em&ex=1160798400&en=c01ce625884089d1&ei=5087%0A; in the same month he also donated $19 million to the Art Institute of Chicago http://www.belleville.com/mld/belleville/news/state/15742536.htm. A painting by Cézanne
and a bronze sculpture by Edgar Degas
, both owned by Griffin, are on display at the Institute
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, Kenneth and Anne Griffin were included by Art News in the magazine's ranking of the ten most active art collectors in the world http://www.findarticles.com/p/articles/mi_qn4155/is_20040709/ai_n12551632.
organizations http://burgenstock.sfoa.org/2004/GriffinKen.htm. As a director of the Chicago Public Education Fund, he has stated, "The long term success of our country depends on the success of our public schools" http://www.cpef.org/nm_video.htm#. In 2003, Griffin was the recipient of the ARK award for his philanthropy http://www.arkonline.org/resources/Press%20Release%20-%2014.05.2003.pdf. In October 2006, the Griffins and the Bill and Melinda Gates Foundation opened a new charter school in Chicago
called Woodlawn High School http://chronicle.uchicago.edu/061005/woodlawn.shtml. Griffin's foundation, Citadel Group Foundation, has contributed to the Art Institute of Chicago, public education
http://www.cpef.org/p-10-million-goal.htm, the Children's Memorial Hospital in Chicago http://www.childrensmemorial.org/friends/foundation/corpgivingcircleofcorporatechampions.asp and the Chicago Symphony Orchestra http://www.cso.org/main.taf?p=12,8,4. Griffin has also made contributions to the Robin Hood Foundation http://www.forbes.com/2003/09/18/cz_mm_0918robinhood400s.html and has served on the committee for the Wall Street Poker Night Tournament, a philanthropic event http://www.mathforamerica.org/downloads/MFA_042106.pdf.
In October 2009 Griffin and his wife founded the Kenneth and Anne Griffin Foundation, donating $10 million for the Griffin Early Childhood Center and $16 million to Children's Memorial Hospital, among other contributions.
The Griffin Early Childhood Center, located in Chicago Heights, is an experimental educational effort run by John List
, a University of Chicago economics professor, designed to test whether investing in teachers, or alternatively, in parents, produces better student performance in school.
http://www.eurasiagroup.net/about/index_people.php, the political risk consultancy, and on the Committee on Capital Markets Regulation
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/09-12-2006/0004430851&EDATE=. He has also been a member of the G100, a group of 100 CEOs that meets twice a year http://g100.com/pdf/g100_brochure.pdf.
In July 2004, Griffin married Anne Dias-Griffin
in Versailles
http://www.timesonline.co.uk/article/0,,2095-1612477,00.html (the New York Times, however, reported the wedding occurred in 2003 http://www.nytimes.com/2006/11/22/business/22hedge.html?ref=business). Dias is the founder of Aragon Global Management, another Chicago-based hedge fund firm http://www.chibus.com/user/index.cfm?event=displayRegistrationPrompt&thereferer=http%3A//www.chibus.com/media/storage/paper408/news/2005/10/27/GsbNews/Cwibs.Annual.Fall.Conference-1036676.shtml%3Fnorewrite200604031456%26sourcedomain%3Dwww.chibus.com. They have one son.
In June 2002, Griffin was included in CFO Magazine's Global 100, a list of the most influential people in the world of finance
http://www.cfo.com/article.cfm/3005024. In June 2005, Griffin commented that the economic and political climate in Russia
was now favorable for investors http://web.archive.org/web/20060324040309/http://www.mosnews.com/money/2005/06/28/investors.shtml. Griffin has also expressed his belief in the potential of electronic stock exchange
s over floor-based ones http://burgenstock.sfoa.org/2004/documents/review_2004.pdf. Griffin has also commented on the need for clear rules from the SEC
regarding market timing
and redemption fees http://blogalization.nu/marketmachines/writing/at-harvard-hard-words-on-new-rules/. Griffin’s views on regulation and risk played out in a 2008 New York Times article where he was quoted, “’The unwillingness of the Federal Reserve and the S.E.C. to require working capital limits,’ he said, only exacerbates the risk-taking environment because the banks are playing the equivalent of no-limit poker”.
) is an American
hedge fund
manager. He is the founder
and CEO of Citadel LLC, a Chicago
-based investment firm. Citadel's group of hedge funds rank amongst the largest and most successful hedge funds in the world, and Griffin has earned several billion dollars during his tenure at the company.
As of 2011, he has an estimated net worth of $2.3 billion.
For several years, Griffin avoided extensive press coverage in a manner similar to other hedge fund managers such as billionaire Steven A. Cohen
. As Citadel grew, he agreed that the firm would benefit from broader exposure. In 2001, the first in-depth write-up featured Griffin on the front cover of Institutional Investor magazine, with the tag line "Just 32, he wants to run the world's biggest and best hedge fund. He's nearly there."
More recently, Griffin has adopted a significantly more prominent media profile, appearing as the subject of a Bloomberg magazine cover story, and discussing his art purchases, charitable contributions and political interests in a New York Times interview. In May 2008, he criticised the risk management practices of Wall Street saying: “As an industry, we have a responsibility to manage risk in a way that is prudent... Walk across any of the trading floors -- they are full of 29-year-old-kids. The capital markets are controlled by a bunch of right-out-of business school young guys who haven't really seen that much. You have a real lack of wisdom”. "We, as an industry, dropped the ball. The industry needs to overhaul its thinking, accept greater regulation."
With an estimated $13 billion (down from an estimated $20 billion previously) in assets under management
, Citadel remains one of the world's largest hedge funds and its daily trading volume amounts to approximately 3% of average daily trading activity in London
, New York
, and Tokyo
.
, he started two funds from his dorm room, and he claims that in between classes he would make trades. He even installed a special satellite link to his dorm to acquire real-time market data. After graduating with a degree in economics
, he won the attention of an investor named Frank C. Meyer, founder of Glenwood Capital https://www.citadelgroup.com/careers/about_citadel/our_history.htm. Meyer was amazed at Griffin's success and rate of return with his investments (which at the time were largely based on convertible bond
s), and provided a relatively small investment for Griffin to invest ($1 million) http://www.forbes.com/lists/2006/10/BHED.html. Griffin exceeded Meyer's expectations, and as word of his strong performance spread, investors were persuaded to back Griffin. In a video interview on Opalesque.TV Meyer describes the keys of seeding new managers, as he did with Griffin. He says that all managers have strengths and weaknesses. The key for seeders is to identify and evaluate how managers compensate for their weaknesses by respecting parts of the business that the they don't know well. That breadth is as critical to success as paying attention to areas that the manager does know.
Citadel was officially founded Nov. 1, 1990 with $4.2 million; the name "Citadel" was chosen to suggest strength in times of volatility http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk. With Citadel quickly growing, it began to perform well.
For those who invested, huge rewards followed which Griffin attributed to his exceptional investment skills. Specifically, annual performance has been in excess of 20 percent since 1998. http://www.portfolio.com/executives/features/2007/03/29/Opening-Up-the-Citadel?page=0 Griffin sought to utilise his own quantitative and numerical skills within Citadel. The firm has attracted mathematicians, physicists, engineers, investment analysts, advanced computer technology, and expects a high level of confidentiality.
After it became known in 2006 that Citadel would be the first hedge fund
manager to issue publicly traded debt bonds
, the Financial Times
speculated that Kenneth Griffin may now be "the most feared man on Wall Street
" http://www.financialnews-us.com/?page=uspeoplemoves&contentid=1046717350.
His first appearance on the Forbes 400
was in 2003, with an estimated net worth of $650 million. At 34, he was the second youngest on the list (Ziff Davis
heir Daniel Ziff was the youngest). In September 2004, Fortune Magazine ranked Griffin, who was 35 that year, as the eighth richest American under forty in the category of self-made, US
based wealth http://www.thestreet.com/_yahoo/tech/georgemannes/10194349.html. Griffin was not yet a billionaire
; his net worth
was estimated at $825 million http://www.forbes.com/lists/results.jhtml?passListId=54&passYear=2004&passListType=Person&searchParameter1=unset&searchParameter2=unset&resultsHowMany=25&resultsSortProperties=-numberfield3%2C-numberfield2&resultsSortCategoryName=Age&fromColumnClick=true&bktDisplayField=&bktDisplayFieldLength=&category1=category&category2=category&passKeyword=&resultsStart=376. In 2006 Griffin was the 5th youngest of only seven members of the Forbes 400
under the age of 40 http://www.forbes.com/lists/2006/54/biz_06rich400_The-400-Richest-Americans_Age.html.
His 2004 compensation was reportedly $240 million http://www.institutionalinvestor.com/pdf/pressRoom/presscoverage/independent_alpha_052805.pdf, slightly higher than his 2003 compensation ($230 million) http://www.newsmax.com/archives/ic/2004/7/20/173813.shtml. His 2005 compensation was ranked 13th at $210 million http://translate.google.com/translate?hl=en&sl=es&u=http://buyorsell.es/%3Fcat%3D11&sa=X&oi=translate&resnum=9&ct=result&prev=/search%3Fq%3Dcitadel%2Binvestment%2Bgroup%2Bkenneth%2Bgriffin%26start%3D190%26hl%3Den%26lr%3D%26sa%3DN among the top 25 highest paid hedge fund
managers http://www.finfacts.com/irelandbusinessnews/publish/article_10005996.shtml. Reflecting the strong investment performance of his funds, Griffin is reported to have taken home $1.7bn in 2006 and $2.8bn in 2007, of which salary was estimated to reach $1.5 billion in 2007. In addition, he resides in a $6.9 million penthouse in Chicago
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, the Financial Times
compiled an "alternative rich list" that titled Griffin as the "most precocious" on the list http://www.ft.com/cms/s/92d94ba6-24e4-11d8-81c6-08209b00dd01,gaid=060922005460.html, and Fortune Magazine called Griffin "the youngest of the rich hedge fund managers" http://money.cnn.com/magazines/fortune/fortune_archive/2004/09/20/381152/index.htm.
As of 2007, Griffin was the 117th richest American with an estimated net worth of $3 billion. http://www.forbes.com/lists/2007/54/richlist07_Kenneth-Griffin_BHED.html
of Third Point.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss One such hire made by Griffin prompted Mr. Loeb to pen a widely circulated letter stating: "Let me be clear that under no circumstances are you to approach any Third Point employees or attempt to offer them jobs... My warning extends to any attempt you may make to hire employees of my friends in the event driven space: should you attempt to hire people from them I will consider it a similar act of war. My friends' enemies become my enemies." Despite Loeb’s aggressive letter, many other hedge fund managers supported Griffin and his recruitment strategy, often admitting he is able to offer more competitive benefits due to the success of Citadel. David Einhorn, manager of Greenlight, went so far as to extend best wishes to the employee who joined Citadel.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss
In 2005, at a presentation to Goldman Sachs http://web.archive.org/web/20070927215921/http://www.gs.com/our_firm/our_culture/corporate_citizenship/gmi/images/GMI_Panels/Griffin_paper.pdf, Griffin spoke favourably of credit derivatives. "The market for credit derivatives has effectively created a huge new pool of risk-taking capital for our debt markets. By unbundling and trading credit risk without having to transfer the underlying asset, this market has introduced an entirely new and vital way of spreading risk. Credit derivatives, to use one example,
let banks transfer risk from their portfolios, allowing them to create new loans. They also provide price transparency into instruments that might otherwise be hard to value. This represents an enormous improvement in our financial system – but one that could not have occurred without the innovation that competitive market dynamics trigger." Subsequent events have led some market observers to question the accuracy of this perspective. http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx
Three years later, Griffin testified to the House Committee on Oversight and Government Reform, stating that "[t]he rapid growth in the use of derivatives has created an opaque market whose outstanding notional value is measured in the hundreds of trillions of dollars. As a result, there is great concern about the systemic effects of the failure of anyone financial institution." http://oversight.house.gov/documents/20081113120556.pdf
In 2008, in common with many hedge funds, the performance of several of Citadel's key funds including its Kensington and Wellington funds was down 35% in the year to October.
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk http://www.artnet.com/Magazine/news/artnetnews2/artnetnews5-19-05.asp, although another source reported that the painting was sold to a member of the Whitney family
http://www.chiff.com/a/painting-top-ten.htm. In October 2006, Griffin purchased “False Start” by artist Jasper Johns
for $80 million from Dreamworks
co-founder David Geffen
http://www.nytimes.com/2006/10/12/arts/design/12geff.html?em&ex=1160798400&en=c01ce625884089d1&ei=5087%0A; in the same month he also donated $19 million to the Art Institute of Chicago http://www.belleville.com/mld/belleville/news/state/15742536.htm. A painting by Cézanne
and a bronze sculpture by Edgar Degas
, both owned by Griffin, are on display at the Institute
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, Kenneth and Anne Griffin were included by Art News in the magazine's ranking of the ten most active art collectors in the world http://www.findarticles.com/p/articles/mi_qn4155/is_20040709/ai_n12551632.
organizations http://burgenstock.sfoa.org/2004/GriffinKen.htm. As a director of the Chicago Public Education Fund, he has stated, "The long term success of our country depends on the success of our public schools" http://www.cpef.org/nm_video.htm#. In 2003, Griffin was the recipient of the ARK award for his philanthropy http://www.arkonline.org/resources/Press%20Release%20-%2014.05.2003.pdf. In October 2006, the Griffins and the Bill and Melinda Gates Foundation opened a new charter school in Chicago
called Woodlawn High School http://chronicle.uchicago.edu/061005/woodlawn.shtml. Griffin's foundation, Citadel Group Foundation, has contributed to the Art Institute of Chicago, public education
http://www.cpef.org/p-10-million-goal.htm, the Children's Memorial Hospital in Chicago http://www.childrensmemorial.org/friends/foundation/corpgivingcircleofcorporatechampions.asp and the Chicago Symphony Orchestra http://www.cso.org/main.taf?p=12,8,4. Griffin has also made contributions to the Robin Hood Foundation http://www.forbes.com/2003/09/18/cz_mm_0918robinhood400s.html and has served on the committee for the Wall Street Poker Night Tournament, a philanthropic event http://www.mathforamerica.org/downloads/MFA_042106.pdf.
In October 2009 Griffin and his wife founded the Kenneth and Anne Griffin Foundation, donating $10 million for the Griffin Early Childhood Center and $16 million to Children's Memorial Hospital, among other contributions.
The Griffin Early Childhood Center, located in Chicago Heights, is an experimental educational effort run by John List
, a University of Chicago economics professor, designed to test whether investing in teachers, or alternatively, in parents, produces better student performance in school.
http://www.eurasiagroup.net/about/index_people.php, the political risk consultancy, and on the Committee on Capital Markets Regulation
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/09-12-2006/0004430851&EDATE=. He has also been a member of the G100, a group of 100 CEOs that meets twice a year http://g100.com/pdf/g100_brochure.pdf.
In July 2004, Griffin married Anne Dias-Griffin
in Versailles
http://www.timesonline.co.uk/article/0,,2095-1612477,00.html (the New York Times, however, reported the wedding occurred in 2003 http://www.nytimes.com/2006/11/22/business/22hedge.html?ref=business). Dias is the founder of Aragon Global Management, another Chicago-based hedge fund firm http://www.chibus.com/user/index.cfm?event=displayRegistrationPrompt&thereferer=http%3A//www.chibus.com/media/storage/paper408/news/2005/10/27/GsbNews/Cwibs.Annual.Fall.Conference-1036676.shtml%3Fnorewrite200604031456%26sourcedomain%3Dwww.chibus.com. They have one son.
In June 2002, Griffin was included in CFO Magazine's Global 100, a list of the most influential people in the world of finance
http://www.cfo.com/article.cfm/3005024. In June 2005, Griffin commented that the economic and political climate in Russia
was now favorable for investors http://web.archive.org/web/20060324040309/http://www.mosnews.com/money/2005/06/28/investors.shtml. Griffin has also expressed his belief in the potential of electronic stock exchange
s over floor-based ones http://burgenstock.sfoa.org/2004/documents/review_2004.pdf. Griffin has also commented on the need for clear rules from the SEC
regarding market timing
and redemption fees http://blogalization.nu/marketmachines/writing/at-harvard-hard-words-on-new-rules/. Griffin’s views on regulation and risk played out in a 2008 New York Times article where he was quoted, “’The unwillingness of the Federal Reserve and the S.E.C. to require working capital limits,’ he said, only exacerbates the risk-taking environment because the banks are playing the equivalent of no-limit poker”.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
manager. He is the founder
Founder
Founder may refer to:* the starter of a private or public company, see Entrepreneur* 'Founder', a hoof ailment. See Laminitis#Founder* Founder , management status for Internet Relay Chat...
and CEO of Citadel LLC, a Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
-based investment firm. Citadel's group of hedge funds rank amongst the largest and most successful hedge funds in the world, and Griffin has earned several billion dollars during his tenure at the company.
As of 2011, he has an estimated net worth of $2.3 billion.
For several years, Griffin avoided extensive press coverage in a manner similar to other hedge fund managers such as billionaire Steven A. Cohen
Steven A. Cohen
Steven "Steve" A. Cohen is an American hedge fund manager. He is the founder of SAC Capital Advisors, a Stamford, Connecticut-based hedge fund focusing primarily on equity market strategies....
. As Citadel grew, he agreed that the firm would benefit from broader exposure. In 2001, the first in-depth write-up featured Griffin on the front cover of Institutional Investor magazine, with the tag line "Just 32, he wants to run the world's biggest and best hedge fund. He's nearly there."
More recently, Griffin has adopted a significantly more prominent media profile, appearing as the subject of a Bloomberg magazine cover story, and discussing his art purchases, charitable contributions and political interests in a New York Times interview. In May 2008, he criticised the risk management practices of Wall Street saying: “As an industry, we have a responsibility to manage risk in a way that is prudent... Walk across any of the trading floors -- they are full of 29-year-old-kids. The capital markets are controlled by a bunch of right-out-of business school young guys who haven't really seen that much. You have a real lack of wisdom”. "We, as an industry, dropped the ball. The industry needs to overhaul its thinking, accept greater regulation."
With an estimated $13 billion (down from an estimated $20 billion previously) in assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
, Citadel remains one of the world's largest hedge funds and its daily trading volume amounts to approximately 3% of average daily trading activity in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, and Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
.
Business career
While still at Harvard UniversityHarvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
, he started two funds from his dorm room, and he claims that in between classes he would make trades. He even installed a special satellite link to his dorm to acquire real-time market data. After graduating with a degree in economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, he won the attention of an investor named Frank C. Meyer, founder of Glenwood Capital https://www.citadelgroup.com/careers/about_citadel/our_history.htm. Meyer was amazed at Griffin's success and rate of return with his investments (which at the time were largely based on convertible bond
Convertible bond
In finance, a convertible note is a type of bond that the holder can convert into shares of common stock in the issuing company or cash of equal value, at an agreed-upon price. It is a hybrid security with debt- and equity-like features...
s), and provided a relatively small investment for Griffin to invest ($1 million) http://www.forbes.com/lists/2006/10/BHED.html. Griffin exceeded Meyer's expectations, and as word of his strong performance spread, investors were persuaded to back Griffin. In a video interview on Opalesque.TV Meyer describes the keys of seeding new managers, as he did with Griffin. He says that all managers have strengths and weaknesses. The key for seeders is to identify and evaluate how managers compensate for their weaknesses by respecting parts of the business that the they don't know well. That breadth is as critical to success as paying attention to areas that the manager does know.
Citadel was officially founded Nov. 1, 1990 with $4.2 million; the name "Citadel" was chosen to suggest strength in times of volatility http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk. With Citadel quickly growing, it began to perform well.
For those who invested, huge rewards followed which Griffin attributed to his exceptional investment skills. Specifically, annual performance has been in excess of 20 percent since 1998. http://www.portfolio.com/executives/features/2007/03/29/Opening-Up-the-Citadel?page=0 Griffin sought to utilise his own quantitative and numerical skills within Citadel. The firm has attracted mathematicians, physicists, engineers, investment analysts, advanced computer technology, and expects a high level of confidentiality.
After it became known in 2006 that Citadel would be the first hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
manager to issue publicly traded debt bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
, the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
speculated that Kenneth Griffin may now be "the most feared man on Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
" http://www.financialnews-us.com/?page=uspeoplemoves&contentid=1046717350.
Wealth
In 1986, Griffin became interested in investing after reading a Forbes Magazine article http://ddo.typepad.com/ddo/files/Citadel_2001.pdf. After nearly twenty years, Griffin has appeared numerous times in the magazine's Forbes 400; as of 2008, his wealth was estimated at $3.7 billion. By 2011, his wealth estimated by Forbes had fallen to $2.3 billion, making him the 512th richest person in the world.His first appearance on the Forbes 400
Forbes 400
The Forbes 400 or 400 Richest Americans is a list published by Forbes Magazine magazine of the wealthiest 400 Americans, ranked by net worth. The list is published annually in September, and 2010 marks the 29th issue. The 400 was started by Malcom Forbes in 1982 and treats those in the list like...
was in 2003, with an estimated net worth of $650 million. At 34, he was the second youngest on the list (Ziff Davis
Ziff Davis
Ziff Davis Inc. is an American publisher and Internet company. It was founded in 1927 in Chicago by William B. Ziff, Sr. and Bernard G. Davis. Throughout most of its history, it was a publisher of hobbyist magazines, often ones devoted to expensive, advertiser-rich hobbies such as cars,...
heir Daniel Ziff was the youngest). In September 2004, Fortune Magazine ranked Griffin, who was 35 that year, as the eighth richest American under forty in the category of self-made, US
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
based wealth http://www.thestreet.com/_yahoo/tech/georgemannes/10194349.html. Griffin was not yet a billionaire
Billionaire
A billionaire, in countries that use the short scale number naming system, is a person who has a net worth of at least one billion units of a given currency, usually the United States dollar, Euro, or Pound sterling. Forbes magazine updates a complete list of U.S. dollar billionaires around the...
; his net worth
Net worth
In business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time...
was estimated at $825 million http://www.forbes.com/lists/results.jhtml?passListId=54&passYear=2004&passListType=Person&searchParameter1=unset&searchParameter2=unset&resultsHowMany=25&resultsSortProperties=-numberfield3%2C-numberfield2&resultsSortCategoryName=Age&fromColumnClick=true&bktDisplayField=&bktDisplayFieldLength=&category1=category&category2=category&passKeyword=&resultsStart=376. In 2006 Griffin was the 5th youngest of only seven members of the Forbes 400
Forbes 400
The Forbes 400 or 400 Richest Americans is a list published by Forbes Magazine magazine of the wealthiest 400 Americans, ranked by net worth. The list is published annually in September, and 2010 marks the 29th issue. The 400 was started by Malcom Forbes in 1982 and treats those in the list like...
under the age of 40 http://www.forbes.com/lists/2006/54/biz_06rich400_The-400-Richest-Americans_Age.html.
His 2004 compensation was reportedly $240 million http://www.institutionalinvestor.com/pdf/pressRoom/presscoverage/independent_alpha_052805.pdf, slightly higher than his 2003 compensation ($230 million) http://www.newsmax.com/archives/ic/2004/7/20/173813.shtml. His 2005 compensation was ranked 13th at $210 million http://translate.google.com/translate?hl=en&sl=es&u=http://buyorsell.es/%3Fcat%3D11&sa=X&oi=translate&resnum=9&ct=result&prev=/search%3Fq%3Dcitadel%2Binvestment%2Bgroup%2Bkenneth%2Bgriffin%26start%3D190%26hl%3Den%26lr%3D%26sa%3DN among the top 25 highest paid hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
managers http://www.finfacts.com/irelandbusinessnews/publish/article_10005996.shtml. Reflecting the strong investment performance of his funds, Griffin is reported to have taken home $1.7bn in 2006 and $2.8bn in 2007, of which salary was estimated to reach $1.5 billion in 2007. In addition, he resides in a $6.9 million penthouse in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
compiled an "alternative rich list" that titled Griffin as the "most precocious" on the list http://www.ft.com/cms/s/92d94ba6-24e4-11d8-81c6-08209b00dd01,gaid=060922005460.html, and Fortune Magazine called Griffin "the youngest of the rich hedge fund managers" http://money.cnn.com/magazines/fortune/fortune_archive/2004/09/20/381152/index.htm.
As of 2007, Griffin was the 117th richest American with an estimated net worth of $3 billion. http://www.forbes.com/lists/2007/54/richlist07_Kenneth-Griffin_BHED.html
Controversy
Kenneth Griffin has engaged in an ongoing recruiting rivalry with hedge fund manager Daniel S. LoebDaniel S. Loeb
Daniel Seth Loeb is an American hedge fund manager and founder of Third Point LLC, a New York based hedge fund managing over $7.5 billion in assets. Loeb is well-known in the financial world for writing public letters, in which he expresses disapproval of the performance and conduct of other...
of Third Point.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss One such hire made by Griffin prompted Mr. Loeb to pen a widely circulated letter stating: "Let me be clear that under no circumstances are you to approach any Third Point employees or attempt to offer them jobs... My warning extends to any attempt you may make to hire employees of my friends in the event driven space: should you attempt to hire people from them I will consider it a similar act of war. My friends' enemies become my enemies." Despite Loeb’s aggressive letter, many other hedge fund managers supported Griffin and his recruitment strategy, often admitting he is able to offer more competitive benefits due to the success of Citadel. David Einhorn, manager of Greenlight, went so far as to extend best wishes to the employee who joined Citadel.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss
In 2005, at a presentation to Goldman Sachs http://web.archive.org/web/20070927215921/http://www.gs.com/our_firm/our_culture/corporate_citizenship/gmi/images/GMI_Panels/Griffin_paper.pdf, Griffin spoke favourably of credit derivatives. "The market for credit derivatives has effectively created a huge new pool of risk-taking capital for our debt markets. By unbundling and trading credit risk without having to transfer the underlying asset, this market has introduced an entirely new and vital way of spreading risk. Credit derivatives, to use one example,
let banks transfer risk from their portfolios, allowing them to create new loans. They also provide price transparency into instruments that might otherwise be hard to value. This represents an enormous improvement in our financial system – but one that could not have occurred without the innovation that competitive market dynamics trigger." Subsequent events have led some market observers to question the accuracy of this perspective. http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx
Three years later, Griffin testified to the House Committee on Oversight and Government Reform, stating that "[t]he rapid growth in the use of derivatives has created an opaque market whose outstanding notional value is measured in the hundreds of trillions of dollars. As a result, there is great concern about the systemic effects of the failure of anyone financial institution." http://oversight.house.gov/documents/20081113120556.pdf
In 2008, in common with many hedge funds, the performance of several of Citadel's key funds including its Kensington and Wellington funds was down 35% in the year to October.
Art collection
Apart from the business world, the hedge fund pioneer has devoted some of his time to collection and patronage of the arts http://www.cso.org/main.taf?erube_fh=csocom&csocom.submit.perfDetail=1&csocom.eventID=7228. He allegedly paid a record price ($60.5 million) for a painting by Paul CézannePaul Cézanne
Paul Cézanne was a French artist and Post-Impressionist painter whose work laid the foundations of the transition from the 19th century conception of artistic endeavour to a new and radically different world of art in the 20th century. Cézanne can be said to form the bridge between late 19th...
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk http://www.artnet.com/Magazine/news/artnetnews2/artnetnews5-19-05.asp, although another source reported that the painting was sold to a member of the Whitney family
Whitney family
The Whitney family is an American family notable for their social prominence, wealth, business enterprises and philanthropy, founded by John Whitney who came from London, England to Watertown, Massachusetts in 1635.-Rise to prominence:...
http://www.chiff.com/a/painting-top-ten.htm. In October 2006, Griffin purchased “False Start” by artist Jasper Johns
Jasper Johns
Jasper Johns, Jr. is an American contemporary artist who works primarily in painting and printmaking.-Life:Born in Augusta, Georgia, Jasper Johns spent his early life in Allendale, South Carolina with his paternal grandparents after his parents' marriage failed...
for $80 million from Dreamworks
DreamWorks
DreamWorks Pictures, also known as DreamWorks, LLC, DreamWorks SKG, DreamWorks II Distribution Co., LLC, DreamWorks Studios or DW Studios, LLC, is an American film studio which develops, produces, and distributes films, video games and television programming...
co-founder David Geffen
David Geffen
David Geffen is an American record executive, film producer, theatrical producer and philanthropist. Geffen is noted for creating Asylum Records in 1970, Geffen Records in 1980, and DGC Records in 1990...
http://www.nytimes.com/2006/10/12/arts/design/12geff.html?em&ex=1160798400&en=c01ce625884089d1&ei=5087%0A; in the same month he also donated $19 million to the Art Institute of Chicago http://www.belleville.com/mld/belleville/news/state/15742536.htm. A painting by Cézanne
Paul Cézanne
Paul Cézanne was a French artist and Post-Impressionist painter whose work laid the foundations of the transition from the 19th century conception of artistic endeavour to a new and radically different world of art in the 20th century. Cézanne can be said to form the bridge between late 19th...
and a bronze sculpture by Edgar Degas
Edgar Degas
Edgar Degas[p] , born Hilaire-Germain-Edgar De Gas, was a French artist famous for his work in painting, sculpture, printmaking and drawing. He is regarded as one of the founders of Impressionism although he rejected the term, and preferred to be called a realist...
, both owned by Griffin, are on display at the Institute
Art Institute of Chicago
The School of the Art Institute of Chicago is one of America's largest accredited independent schools of art and design, located in the Loop in Chicago, Illinois. It is associated with the museum of the same name, and "The Art Institute of Chicago" or "Chicago Art Institute" often refers to either...
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, Kenneth and Anne Griffin were included by Art News in the magazine's ranking of the ten most active art collectors in the world http://www.findarticles.com/p/articles/mi_qn4155/is_20040709/ai_n12551632.
Philanthropy
Griffin is a member of several philanthropic boards, including a number of ChicagoChicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
organizations http://burgenstock.sfoa.org/2004/GriffinKen.htm. As a director of the Chicago Public Education Fund, he has stated, "The long term success of our country depends on the success of our public schools" http://www.cpef.org/nm_video.htm#. In 2003, Griffin was the recipient of the ARK award for his philanthropy http://www.arkonline.org/resources/Press%20Release%20-%2014.05.2003.pdf. In October 2006, the Griffins and the Bill and Melinda Gates Foundation opened a new charter school in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
called Woodlawn High School http://chronicle.uchicago.edu/061005/woodlawn.shtml. Griffin's foundation, Citadel Group Foundation, has contributed to the Art Institute of Chicago, public education
Public education
State schools, also known in the United States and Canada as public schools,In much of the Commonwealth, including Australia, New Zealand, South Africa, and the United Kingdom, the terms 'public education', 'public school' and 'independent school' are used for private schools, that is, schools...
http://www.cpef.org/p-10-million-goal.htm, the Children's Memorial Hospital in Chicago http://www.childrensmemorial.org/friends/foundation/corpgivingcircleofcorporatechampions.asp and the Chicago Symphony Orchestra http://www.cso.org/main.taf?p=12,8,4. Griffin has also made contributions to the Robin Hood Foundation http://www.forbes.com/2003/09/18/cz_mm_0918robinhood400s.html and has served on the committee for the Wall Street Poker Night Tournament, a philanthropic event http://www.mathforamerica.org/downloads/MFA_042106.pdf.
In October 2009 Griffin and his wife founded the Kenneth and Anne Griffin Foundation, donating $10 million for the Griffin Early Childhood Center and $16 million to Children's Memorial Hospital, among other contributions.
The Griffin Early Childhood Center, located in Chicago Heights, is an experimental educational effort run by John List
John A. List
John August List is The Homer J. Livingston Professor in Economics at the University of Chicago. He received his B.A. from the University of Wisconsin–Stevens Point, and his Ph.D. from the University of Wyoming in 1996...
, a University of Chicago economics professor, designed to test whether investing in teachers, or alternatively, in parents, produces better student performance in school.
Other information
Griffin serves on the Advisory Board of Eurasia GroupEurasia Group
-Overview:Eurasia Group is best known as the world's largest political risk consultancy with offices in New York, Washington, London, and Tokyo and more than 125 full-time employees...
http://www.eurasiagroup.net/about/index_people.php, the political risk consultancy, and on the Committee on Capital Markets Regulation
Committee on Capital Markets Regulation
The Committee on Capital Markets Regulation is an independent and nonpartisan 501 research organization dedicated to improving the regulation of U.S. capital markets.-Background:...
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/09-12-2006/0004430851&EDATE=. He has also been a member of the G100, a group of 100 CEOs that meets twice a year http://g100.com/pdf/g100_brochure.pdf.
In July 2004, Griffin married Anne Dias-Griffin
Anne Dias-Griffin
Anne Dias-Griffin is a French hedge fund manager, she works at Aragon Global Management, a $100 million fund focusing on global equities that she founded. It is one of the largest hedge funds managed by a woman. -Early life:...
in Versailles
Versailles
Versailles , a city renowned for its château, the Palace of Versailles, was the de facto capital of the kingdom of France for over a century, from 1682 to 1789. It is now a wealthy suburb of Paris and remains an important administrative and judicial centre...
http://www.timesonline.co.uk/article/0,,2095-1612477,00.html (the New York Times, however, reported the wedding occurred in 2003 http://www.nytimes.com/2006/11/22/business/22hedge.html?ref=business). Dias is the founder of Aragon Global Management, another Chicago-based hedge fund firm http://www.chibus.com/user/index.cfm?event=displayRegistrationPrompt&thereferer=http%3A//www.chibus.com/media/storage/paper408/news/2005/10/27/GsbNews/Cwibs.Annual.Fall.Conference-1036676.shtml%3Fnorewrite200604031456%26sourcedomain%3Dwww.chibus.com. They have one son.
In June 2002, Griffin was included in CFO Magazine's Global 100, a list of the most influential people in the world of finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
http://www.cfo.com/article.cfm/3005024. In June 2005, Griffin commented that the economic and political climate in Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
was now favorable for investors http://web.archive.org/web/20060324040309/http://www.mosnews.com/money/2005/06/28/investors.shtml. Griffin has also expressed his belief in the potential of electronic stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
s over floor-based ones http://burgenstock.sfoa.org/2004/documents/review_2004.pdf. Griffin has also commented on the need for clear rules from the SEC
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States...
regarding market timing
Market timing
Market timing is the strategy of making buy or sell decisions of financial assets by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis...
and redemption fees http://blogalization.nu/marketmachines/writing/at-harvard-hard-words-on-new-rules/. Griffin’s views on regulation and risk played out in a 2008 New York Times article where he was quoted, “’The unwillingness of the Federal Reserve and the S.E.C. to require working capital limits,’ he said, only exacerbates the risk-taking environment because the banks are playing the equivalent of no-limit poker”.
See also
- Anne Dias-GriffinAnne Dias-GriffinAnne Dias-Griffin is a French hedge fund manager, she works at Aragon Global Management, a $100 million fund focusing on global equities that she founded. It is one of the largest hedge funds managed by a woman. -Early life:...
- Citadel LLC
- The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
Kenneth Griffin
- Small bio
- Extensive II News Article on Griffin
- "Citadel Boss Won't Be Hedging On Day Job"
- Griffin's bipartisan political contributions
- "Risk and the Future of Our Capital Markets," a presentation by Griffin
- Interview with Harvard Investment Magazine
- Harvard Law School Panel questions current state of regulation for capital markets
- Picture of Kenneth and Anne Griffin
- Large picture and quote of Griffin
- Extensive Bloomberg article on Griffin
- 2 Videos featuring Griffin
- Fortune Magazine article about Griffin
- Extensive Interview With Griffin (July 2007), Risk Magazine, Navroz Patel
Forbes rankings
- Kenneth Griffin's info on the 2007 Forbes 400 list
- Kenneth Griffin's info on the 2007 global Forbes list of billionaires
- Kenneth Griffin's info on the 2006 Forbes 400 list
- Kenneth Griffin's info on the 2006 global Forbes list of billionaires (first appearance)
- Kenneth Griffin's info on the 2005 Forbes 400 list
- Kenneth Griffin's info on the 2004 Forbes 400 list
- Kenneth Griffin's info on the 2003 Forbes 400 list (first appearance)
Citadel LLC
- "Citadel turns chaos into cash"
- Chicago Business profile
- Prediction of possible Citadel IPO
- Extensive Bloomberg article on Griffin and Citadel
- Citadel's website
- Citadel's investment in Google
- IT technology at Citadel
Further reading
Kenneth C. Griffin (born October 15, 1968 in Daytona Beach, FloridaFlorida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
) is an American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
manager. He is the founder
Founder
Founder may refer to:* the starter of a private or public company, see Entrepreneur* 'Founder', a hoof ailment. See Laminitis#Founder* Founder , management status for Internet Relay Chat...
and CEO of Citadel LLC, a Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
-based investment firm. Citadel's group of hedge funds rank amongst the largest and most successful hedge funds in the world, and Griffin has earned several billion dollars during his tenure at the company.
As of 2011, he has an estimated net worth of $2.3 billion.
For several years, Griffin avoided extensive press coverage in a manner similar to other hedge fund managers such as billionaire Steven A. Cohen
Steven A. Cohen
Steven "Steve" A. Cohen is an American hedge fund manager. He is the founder of SAC Capital Advisors, a Stamford, Connecticut-based hedge fund focusing primarily on equity market strategies....
. As Citadel grew, he agreed that the firm would benefit from broader exposure. In 2001, the first in-depth write-up featured Griffin on the front cover of Institutional Investor magazine, with the tag line "Just 32, he wants to run the world's biggest and best hedge fund. He's nearly there."
More recently, Griffin has adopted a significantly more prominent media profile, appearing as the subject of a Bloomberg magazine cover story, and discussing his art purchases, charitable contributions and political interests in a New York Times interview. In May 2008, he criticised the risk management practices of Wall Street saying: “As an industry, we have a responsibility to manage risk in a way that is prudent... Walk across any of the trading floors -- they are full of 29-year-old-kids. The capital markets are controlled by a bunch of right-out-of business school young guys who haven't really seen that much. You have a real lack of wisdom”. "We, as an industry, dropped the ball. The industry needs to overhaul its thinking, accept greater regulation."
With an estimated $13 billion (down from an estimated $20 billion previously) in assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
, Citadel remains one of the world's largest hedge funds and its daily trading volume amounts to approximately 3% of average daily trading activity in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, and Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
.
Business career
While still at Harvard UniversityHarvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
, he started two funds from his dorm room, and he claims that in between classes he would make trades. He even installed a special satellite link to his dorm to acquire real-time market data. After graduating with a degree in economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, he won the attention of an investor named Frank C. Meyer, founder of Glenwood Capital https://www.citadelgroup.com/careers/about_citadel/our_history.htm. Meyer was amazed at Griffin's success and rate of return with his investments (which at the time were largely based on convertible bond
Convertible bond
In finance, a convertible note is a type of bond that the holder can convert into shares of common stock in the issuing company or cash of equal value, at an agreed-upon price. It is a hybrid security with debt- and equity-like features...
s), and provided a relatively small investment for Griffin to invest ($1 million) http://www.forbes.com/lists/2006/10/BHED.html. Griffin exceeded Meyer's expectations, and as word of his strong performance spread, investors were persuaded to back Griffin. In a video interview on Opalesque.TV Meyer describes the keys of seeding new managers, as he did with Griffin. He says that all managers have strengths and weaknesses. The key for seeders is to identify and evaluate how managers compensate for their weaknesses by respecting parts of the business that the they don't know well. That breadth is as critical to success as paying attention to areas that the manager does know.
Citadel was officially founded Nov. 1, 1990 with $4.2 million; the name "Citadel" was chosen to suggest strength in times of volatility http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk. With Citadel quickly growing, it began to perform well.
For those who invested, huge rewards followed which Griffin attributed to his exceptional investment skills. Specifically, annual performance has been in excess of 20 percent since 1998. http://www.portfolio.com/executives/features/2007/03/29/Opening-Up-the-Citadel?page=0 Griffin sought to utilise his own quantitative and numerical skills within Citadel. The firm has attracted mathematicians, physicists, engineers, investment analysts, advanced computer technology, and expects a high level of confidentiality.
After it became known in 2006 that Citadel would be the first hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
manager to issue publicly traded debt bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
, the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
speculated that Kenneth Griffin may now be "the most feared man on Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
" http://www.financialnews-us.com/?page=uspeoplemoves&contentid=1046717350.
Wealth
In 1986, Griffin became interested in investing after reading a Forbes Magazine article http://ddo.typepad.com/ddo/files/Citadel_2001.pdf. After nearly twenty years, Griffin has appeared numerous times in the magazine's Forbes 400; as of 2008, his wealth was estimated at $3.7 billion. By 2011, his wealth estimated by Forbes had fallen to $2.3 billion, making him the 512th richest person in the world.His first appearance on the Forbes 400
Forbes 400
The Forbes 400 or 400 Richest Americans is a list published by Forbes Magazine magazine of the wealthiest 400 Americans, ranked by net worth. The list is published annually in September, and 2010 marks the 29th issue. The 400 was started by Malcom Forbes in 1982 and treats those in the list like...
was in 2003, with an estimated net worth of $650 million. At 34, he was the second youngest on the list (Ziff Davis
Ziff Davis
Ziff Davis Inc. is an American publisher and Internet company. It was founded in 1927 in Chicago by William B. Ziff, Sr. and Bernard G. Davis. Throughout most of its history, it was a publisher of hobbyist magazines, often ones devoted to expensive, advertiser-rich hobbies such as cars,...
heir Daniel Ziff was the youngest). In September 2004, Fortune Magazine ranked Griffin, who was 35 that year, as the eighth richest American under forty in the category of self-made, US
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
based wealth http://www.thestreet.com/_yahoo/tech/georgemannes/10194349.html. Griffin was not yet a billionaire
Billionaire
A billionaire, in countries that use the short scale number naming system, is a person who has a net worth of at least one billion units of a given currency, usually the United States dollar, Euro, or Pound sterling. Forbes magazine updates a complete list of U.S. dollar billionaires around the...
; his net worth
Net worth
In business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time...
was estimated at $825 million http://www.forbes.com/lists/results.jhtml?passListId=54&passYear=2004&passListType=Person&searchParameter1=unset&searchParameter2=unset&resultsHowMany=25&resultsSortProperties=-numberfield3%2C-numberfield2&resultsSortCategoryName=Age&fromColumnClick=true&bktDisplayField=&bktDisplayFieldLength=&category1=category&category2=category&passKeyword=&resultsStart=376. In 2006 Griffin was the 5th youngest of only seven members of the Forbes 400
Forbes 400
The Forbes 400 or 400 Richest Americans is a list published by Forbes Magazine magazine of the wealthiest 400 Americans, ranked by net worth. The list is published annually in September, and 2010 marks the 29th issue. The 400 was started by Malcom Forbes in 1982 and treats those in the list like...
under the age of 40 http://www.forbes.com/lists/2006/54/biz_06rich400_The-400-Richest-Americans_Age.html.
His 2004 compensation was reportedly $240 million http://www.institutionalinvestor.com/pdf/pressRoom/presscoverage/independent_alpha_052805.pdf, slightly higher than his 2003 compensation ($230 million) http://www.newsmax.com/archives/ic/2004/7/20/173813.shtml. His 2005 compensation was ranked 13th at $210 million http://translate.google.com/translate?hl=en&sl=es&u=http://buyorsell.es/%3Fcat%3D11&sa=X&oi=translate&resnum=9&ct=result&prev=/search%3Fq%3Dcitadel%2Binvestment%2Bgroup%2Bkenneth%2Bgriffin%26start%3D190%26hl%3Den%26lr%3D%26sa%3DN among the top 25 highest paid hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
managers http://www.finfacts.com/irelandbusinessnews/publish/article_10005996.shtml. Reflecting the strong investment performance of his funds, Griffin is reported to have taken home $1.7bn in 2006 and $2.8bn in 2007, of which salary was estimated to reach $1.5 billion in 2007. In addition, he resides in a $6.9 million penthouse in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
compiled an "alternative rich list" that titled Griffin as the "most precocious" on the list http://www.ft.com/cms/s/92d94ba6-24e4-11d8-81c6-08209b00dd01,gaid=060922005460.html, and Fortune Magazine called Griffin "the youngest of the rich hedge fund managers" http://money.cnn.com/magazines/fortune/fortune_archive/2004/09/20/381152/index.htm.
As of 2007, Griffin was the 117th richest American with an estimated net worth of $3 billion. http://www.forbes.com/lists/2007/54/richlist07_Kenneth-Griffin_BHED.html
Controversy
Kenneth Griffin has engaged in an ongoing recruiting rivalry with hedge fund manager Daniel S. LoebDaniel S. Loeb
Daniel Seth Loeb is an American hedge fund manager and founder of Third Point LLC, a New York based hedge fund managing over $7.5 billion in assets. Loeb is well-known in the financial world for writing public letters, in which he expresses disapproval of the performance and conduct of other...
of Third Point.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss One such hire made by Griffin prompted Mr. Loeb to pen a widely circulated letter stating: "Let me be clear that under no circumstances are you to approach any Third Point employees or attempt to offer them jobs... My warning extends to any attempt you may make to hire employees of my friends in the event driven space: should you attempt to hire people from them I will consider it a similar act of war. My friends' enemies become my enemies." Despite Loeb’s aggressive letter, many other hedge fund managers supported Griffin and his recruitment strategy, often admitting he is able to offer more competitive benefits due to the success of Citadel. David Einhorn, manager of Greenlight, went so far as to extend best wishes to the employee who joined Citadel.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss
In 2005, at a presentation to Goldman Sachs http://web.archive.org/web/20070927215921/http://www.gs.com/our_firm/our_culture/corporate_citizenship/gmi/images/GMI_Panels/Griffin_paper.pdf, Griffin spoke favourably of credit derivatives. "The market for credit derivatives has effectively created a huge new pool of risk-taking capital for our debt markets. By unbundling and trading credit risk without having to transfer the underlying asset, this market has introduced an entirely new and vital way of spreading risk. Credit derivatives, to use one example,
let banks transfer risk from their portfolios, allowing them to create new loans. They also provide price transparency into instruments that might otherwise be hard to value. This represents an enormous improvement in our financial system – but one that could not have occurred without the innovation that competitive market dynamics trigger." Subsequent events have led some market observers to question the accuracy of this perspective. http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx
Three years later, Griffin testified to the House Committee on Oversight and Government Reform, stating that "[t]he rapid growth in the use of derivatives has created an opaque market whose outstanding notional value is measured in the hundreds of trillions of dollars. As a result, there is great concern about the systemic effects of the failure of anyone financial institution." http://oversight.house.gov/documents/20081113120556.pdf
In 2008, in common with many hedge funds, the performance of several of Citadel's key funds including its Kensington and Wellington funds was down 35% in the year to October.
Art collection
Apart from the business world, the hedge fund pioneer has devoted some of his time to collection and patronage of the arts http://www.cso.org/main.taf?erube_fh=csocom&csocom.submit.perfDetail=1&csocom.eventID=7228. He allegedly paid a record price ($60.5 million) for a painting by Paul CézannePaul Cézanne
Paul Cézanne was a French artist and Post-Impressionist painter whose work laid the foundations of the transition from the 19th century conception of artistic endeavour to a new and radically different world of art in the 20th century. Cézanne can be said to form the bridge between late 19th...
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk http://www.artnet.com/Magazine/news/artnetnews2/artnetnews5-19-05.asp, although another source reported that the painting was sold to a member of the Whitney family
Whitney family
The Whitney family is an American family notable for their social prominence, wealth, business enterprises and philanthropy, founded by John Whitney who came from London, England to Watertown, Massachusetts in 1635.-Rise to prominence:...
http://www.chiff.com/a/painting-top-ten.htm. In October 2006, Griffin purchased “False Start” by artist Jasper Johns
Jasper Johns
Jasper Johns, Jr. is an American contemporary artist who works primarily in painting and printmaking.-Life:Born in Augusta, Georgia, Jasper Johns spent his early life in Allendale, South Carolina with his paternal grandparents after his parents' marriage failed...
for $80 million from Dreamworks
DreamWorks
DreamWorks Pictures, also known as DreamWorks, LLC, DreamWorks SKG, DreamWorks II Distribution Co., LLC, DreamWorks Studios or DW Studios, LLC, is an American film studio which develops, produces, and distributes films, video games and television programming...
co-founder David Geffen
David Geffen
David Geffen is an American record executive, film producer, theatrical producer and philanthropist. Geffen is noted for creating Asylum Records in 1970, Geffen Records in 1980, and DGC Records in 1990...
http://www.nytimes.com/2006/10/12/arts/design/12geff.html?em&ex=1160798400&en=c01ce625884089d1&ei=5087%0A; in the same month he also donated $19 million to the Art Institute of Chicago http://www.belleville.com/mld/belleville/news/state/15742536.htm. A painting by Cézanne
Paul Cézanne
Paul Cézanne was a French artist and Post-Impressionist painter whose work laid the foundations of the transition from the 19th century conception of artistic endeavour to a new and radically different world of art in the 20th century. Cézanne can be said to form the bridge between late 19th...
and a bronze sculpture by Edgar Degas
Edgar Degas
Edgar Degas[p] , born Hilaire-Germain-Edgar De Gas, was a French artist famous for his work in painting, sculpture, printmaking and drawing. He is regarded as one of the founders of Impressionism although he rejected the term, and preferred to be called a realist...
, both owned by Griffin, are on display at the Institute
Art Institute of Chicago
The School of the Art Institute of Chicago is one of America's largest accredited independent schools of art and design, located in the Loop in Chicago, Illinois. It is associated with the museum of the same name, and "The Art Institute of Chicago" or "Chicago Art Institute" often refers to either...
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, Kenneth and Anne Griffin were included by Art News in the magazine's ranking of the ten most active art collectors in the world http://www.findarticles.com/p/articles/mi_qn4155/is_20040709/ai_n12551632.
Philanthropy
Griffin is a member of several philanthropic boards, including a number of ChicagoChicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
organizations http://burgenstock.sfoa.org/2004/GriffinKen.htm. As a director of the Chicago Public Education Fund, he has stated, "The long term success of our country depends on the success of our public schools" http://www.cpef.org/nm_video.htm#. In 2003, Griffin was the recipient of the ARK award for his philanthropy http://www.arkonline.org/resources/Press%20Release%20-%2014.05.2003.pdf. In October 2006, the Griffins and the Bill and Melinda Gates Foundation opened a new charter school in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
called Woodlawn High School http://chronicle.uchicago.edu/061005/woodlawn.shtml. Griffin's foundation, Citadel Group Foundation, has contributed to the Art Institute of Chicago, public education
Public education
State schools, also known in the United States and Canada as public schools,In much of the Commonwealth, including Australia, New Zealand, South Africa, and the United Kingdom, the terms 'public education', 'public school' and 'independent school' are used for private schools, that is, schools...
http://www.cpef.org/p-10-million-goal.htm, the Children's Memorial Hospital in Chicago http://www.childrensmemorial.org/friends/foundation/corpgivingcircleofcorporatechampions.asp and the Chicago Symphony Orchestra http://www.cso.org/main.taf?p=12,8,4. Griffin has also made contributions to the Robin Hood Foundation http://www.forbes.com/2003/09/18/cz_mm_0918robinhood400s.html and has served on the committee for the Wall Street Poker Night Tournament, a philanthropic event http://www.mathforamerica.org/downloads/MFA_042106.pdf.
In October 2009 Griffin and his wife founded the Kenneth and Anne Griffin Foundation, donating $10 million for the Griffin Early Childhood Center and $16 million to Children's Memorial Hospital, among other contributions.
The Griffin Early Childhood Center, located in Chicago Heights, is an experimental educational effort run by John List
John A. List
John August List is The Homer J. Livingston Professor in Economics at the University of Chicago. He received his B.A. from the University of Wisconsin–Stevens Point, and his Ph.D. from the University of Wyoming in 1996...
, a University of Chicago economics professor, designed to test whether investing in teachers, or alternatively, in parents, produces better student performance in school.
Other information
Griffin serves on the Advisory Board of Eurasia GroupEurasia Group
-Overview:Eurasia Group is best known as the world's largest political risk consultancy with offices in New York, Washington, London, and Tokyo and more than 125 full-time employees...
http://www.eurasiagroup.net/about/index_people.php, the political risk consultancy, and on the Committee on Capital Markets Regulation
Committee on Capital Markets Regulation
The Committee on Capital Markets Regulation is an independent and nonpartisan 501 research organization dedicated to improving the regulation of U.S. capital markets.-Background:...
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/09-12-2006/0004430851&EDATE=. He has also been a member of the G100, a group of 100 CEOs that meets twice a year http://g100.com/pdf/g100_brochure.pdf.
In July 2004, Griffin married Anne Dias-Griffin
Anne Dias-Griffin
Anne Dias-Griffin is a French hedge fund manager, she works at Aragon Global Management, a $100 million fund focusing on global equities that she founded. It is one of the largest hedge funds managed by a woman. -Early life:...
in Versailles
Versailles
Versailles , a city renowned for its château, the Palace of Versailles, was the de facto capital of the kingdom of France for over a century, from 1682 to 1789. It is now a wealthy suburb of Paris and remains an important administrative and judicial centre...
http://www.timesonline.co.uk/article/0,,2095-1612477,00.html (the New York Times, however, reported the wedding occurred in 2003 http://www.nytimes.com/2006/11/22/business/22hedge.html?ref=business). Dias is the founder of Aragon Global Management, another Chicago-based hedge fund firm http://www.chibus.com/user/index.cfm?event=displayRegistrationPrompt&thereferer=http%3A//www.chibus.com/media/storage/paper408/news/2005/10/27/GsbNews/Cwibs.Annual.Fall.Conference-1036676.shtml%3Fnorewrite200604031456%26sourcedomain%3Dwww.chibus.com. They have one son.
In June 2002, Griffin was included in CFO Magazine's Global 100, a list of the most influential people in the world of finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
http://www.cfo.com/article.cfm/3005024. In June 2005, Griffin commented that the economic and political climate in Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
was now favorable for investors http://web.archive.org/web/20060324040309/http://www.mosnews.com/money/2005/06/28/investors.shtml. Griffin has also expressed his belief in the potential of electronic stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
s over floor-based ones http://burgenstock.sfoa.org/2004/documents/review_2004.pdf. Griffin has also commented on the need for clear rules from the SEC
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States...
regarding market timing
Market timing
Market timing is the strategy of making buy or sell decisions of financial assets by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis...
and redemption fees http://blogalization.nu/marketmachines/writing/at-harvard-hard-words-on-new-rules/. Griffin’s views on regulation and risk played out in a 2008 New York Times article where he was quoted, “’The unwillingness of the Federal Reserve and the S.E.C. to require working capital limits,’ he said, only exacerbates the risk-taking environment because the banks are playing the equivalent of no-limit poker”.
See also
- Anne Dias-GriffinAnne Dias-GriffinAnne Dias-Griffin is a French hedge fund manager, she works at Aragon Global Management, a $100 million fund focusing on global equities that she founded. It is one of the largest hedge funds managed by a woman. -Early life:...
- Citadel LLC
- The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
Kenneth Griffin
- Small bio
- Extensive II News Article on Griffin
- "Citadel Boss Won't Be Hedging On Day Job"
- Griffin's bipartisan political contributions
- "Risk and the Future of Our Capital Markets," a presentation by Griffin
- Interview with Harvard Investment Magazine
- Harvard Law School Panel questions current state of regulation for capital markets
- Picture of Kenneth and Anne Griffin
- Large picture and quote of Griffin
- Extensive Bloomberg article on Griffin
- 2 Videos featuring Griffin
- Fortune Magazine article about Griffin
- Extensive Interview With Griffin (July 2007), Risk Magazine, Navroz Patel
Forbes rankings
- Kenneth Griffin's info on the 2007 Forbes 400 list
- Kenneth Griffin's info on the 2007 global Forbes list of billionaires
- Kenneth Griffin's info on the 2006 Forbes 400 list
- Kenneth Griffin's info on the 2006 global Forbes list of billionaires (first appearance)
- Kenneth Griffin's info on the 2005 Forbes 400 list
- Kenneth Griffin's info on the 2004 Forbes 400 list
- Kenneth Griffin's info on the 2003 Forbes 400 list (first appearance)
Citadel LLC
- "Citadel turns chaos into cash"
- Chicago Business profile
- Prediction of possible Citadel IPO
- Extensive Bloomberg article on Griffin and Citadel
- Citadel's website
- Citadel's investment in Google
- IT technology at Citadel
Further reading
Kenneth C. Griffin (born October 15, 1968 in Daytona Beach, FloridaFlorida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
) is an American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
manager. He is the founder
Founder
Founder may refer to:* the starter of a private or public company, see Entrepreneur* 'Founder', a hoof ailment. See Laminitis#Founder* Founder , management status for Internet Relay Chat...
and CEO of Citadel LLC, a Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
-based investment firm. Citadel's group of hedge funds rank amongst the largest and most successful hedge funds in the world, and Griffin has earned several billion dollars during his tenure at the company.
As of 2011, he has an estimated net worth of $2.3 billion.
For several years, Griffin avoided extensive press coverage in a manner similar to other hedge fund managers such as billionaire Steven A. Cohen
Steven A. Cohen
Steven "Steve" A. Cohen is an American hedge fund manager. He is the founder of SAC Capital Advisors, a Stamford, Connecticut-based hedge fund focusing primarily on equity market strategies....
. As Citadel grew, he agreed that the firm would benefit from broader exposure. In 2001, the first in-depth write-up featured Griffin on the front cover of Institutional Investor magazine, with the tag line "Just 32, he wants to run the world's biggest and best hedge fund. He's nearly there."
More recently, Griffin has adopted a significantly more prominent media profile, appearing as the subject of a Bloomberg magazine cover story, and discussing his art purchases, charitable contributions and political interests in a New York Times interview. In May 2008, he criticised the risk management practices of Wall Street saying: “As an industry, we have a responsibility to manage risk in a way that is prudent... Walk across any of the trading floors -- they are full of 29-year-old-kids. The capital markets are controlled by a bunch of right-out-of business school young guys who haven't really seen that much. You have a real lack of wisdom”. "We, as an industry, dropped the ball. The industry needs to overhaul its thinking, accept greater regulation."
With an estimated $13 billion (down from an estimated $20 billion previously) in assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
, Citadel remains one of the world's largest hedge funds and its daily trading volume amounts to approximately 3% of average daily trading activity in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, and Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
.
Business career
While still at Harvard UniversityHarvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
, he started two funds from his dorm room, and he claims that in between classes he would make trades. He even installed a special satellite link to his dorm to acquire real-time market data. After graduating with a degree in economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, he won the attention of an investor named Frank C. Meyer, founder of Glenwood Capital https://www.citadelgroup.com/careers/about_citadel/our_history.htm. Meyer was amazed at Griffin's success and rate of return with his investments (which at the time were largely based on convertible bond
Convertible bond
In finance, a convertible note is a type of bond that the holder can convert into shares of common stock in the issuing company or cash of equal value, at an agreed-upon price. It is a hybrid security with debt- and equity-like features...
s), and provided a relatively small investment for Griffin to invest ($1 million) http://www.forbes.com/lists/2006/10/BHED.html. Griffin exceeded Meyer's expectations, and as word of his strong performance spread, investors were persuaded to back Griffin. In a video interview on Opalesque.TV Meyer describes the keys of seeding new managers, as he did with Griffin. He says that all managers have strengths and weaknesses. The key for seeders is to identify and evaluate how managers compensate for their weaknesses by respecting parts of the business that the they don't know well. That breadth is as critical to success as paying attention to areas that the manager does know.
Citadel was officially founded Nov. 1, 1990 with $4.2 million; the name "Citadel" was chosen to suggest strength in times of volatility http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk. With Citadel quickly growing, it began to perform well.
For those who invested, huge rewards followed which Griffin attributed to his exceptional investment skills. Specifically, annual performance has been in excess of 20 percent since 1998. http://www.portfolio.com/executives/features/2007/03/29/Opening-Up-the-Citadel?page=0 Griffin sought to utilise his own quantitative and numerical skills within Citadel. The firm has attracted mathematicians, physicists, engineers, investment analysts, advanced computer technology, and expects a high level of confidentiality.
After it became known in 2006 that Citadel would be the first hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
manager to issue publicly traded debt bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
, the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
speculated that Kenneth Griffin may now be "the most feared man on Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
" http://www.financialnews-us.com/?page=uspeoplemoves&contentid=1046717350.
Wealth
In 1986, Griffin became interested in investing after reading a Forbes Magazine article http://ddo.typepad.com/ddo/files/Citadel_2001.pdf. After nearly twenty years, Griffin has appeared numerous times in the magazine's Forbes 400; as of 2008, his wealth was estimated at $3.7 billion. By 2011, his wealth estimated by Forbes had fallen to $2.3 billion, making him the 512th richest person in the world.His first appearance on the Forbes 400
Forbes 400
The Forbes 400 or 400 Richest Americans is a list published by Forbes Magazine magazine of the wealthiest 400 Americans, ranked by net worth. The list is published annually in September, and 2010 marks the 29th issue. The 400 was started by Malcom Forbes in 1982 and treats those in the list like...
was in 2003, with an estimated net worth of $650 million. At 34, he was the second youngest on the list (Ziff Davis
Ziff Davis
Ziff Davis Inc. is an American publisher and Internet company. It was founded in 1927 in Chicago by William B. Ziff, Sr. and Bernard G. Davis. Throughout most of its history, it was a publisher of hobbyist magazines, often ones devoted to expensive, advertiser-rich hobbies such as cars,...
heir Daniel Ziff was the youngest). In September 2004, Fortune Magazine ranked Griffin, who was 35 that year, as the eighth richest American under forty in the category of self-made, US
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
based wealth http://www.thestreet.com/_yahoo/tech/georgemannes/10194349.html. Griffin was not yet a billionaire
Billionaire
A billionaire, in countries that use the short scale number naming system, is a person who has a net worth of at least one billion units of a given currency, usually the United States dollar, Euro, or Pound sterling. Forbes magazine updates a complete list of U.S. dollar billionaires around the...
; his net worth
Net worth
In business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time...
was estimated at $825 million http://www.forbes.com/lists/results.jhtml?passListId=54&passYear=2004&passListType=Person&searchParameter1=unset&searchParameter2=unset&resultsHowMany=25&resultsSortProperties=-numberfield3%2C-numberfield2&resultsSortCategoryName=Age&fromColumnClick=true&bktDisplayField=&bktDisplayFieldLength=&category1=category&category2=category&passKeyword=&resultsStart=376. In 2006 Griffin was the 5th youngest of only seven members of the Forbes 400
Forbes 400
The Forbes 400 or 400 Richest Americans is a list published by Forbes Magazine magazine of the wealthiest 400 Americans, ranked by net worth. The list is published annually in September, and 2010 marks the 29th issue. The 400 was started by Malcom Forbes in 1982 and treats those in the list like...
under the age of 40 http://www.forbes.com/lists/2006/54/biz_06rich400_The-400-Richest-Americans_Age.html.
His 2004 compensation was reportedly $240 million http://www.institutionalinvestor.com/pdf/pressRoom/presscoverage/independent_alpha_052805.pdf, slightly higher than his 2003 compensation ($230 million) http://www.newsmax.com/archives/ic/2004/7/20/173813.shtml. His 2005 compensation was ranked 13th at $210 million http://translate.google.com/translate?hl=en&sl=es&u=http://buyorsell.es/%3Fcat%3D11&sa=X&oi=translate&resnum=9&ct=result&prev=/search%3Fq%3Dcitadel%2Binvestment%2Bgroup%2Bkenneth%2Bgriffin%26start%3D190%26hl%3Den%26lr%3D%26sa%3DN among the top 25 highest paid hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
managers http://www.finfacts.com/irelandbusinessnews/publish/article_10005996.shtml. Reflecting the strong investment performance of his funds, Griffin is reported to have taken home $1.7bn in 2006 and $2.8bn in 2007, of which salary was estimated to reach $1.5 billion in 2007. In addition, he resides in a $6.9 million penthouse in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
compiled an "alternative rich list" that titled Griffin as the "most precocious" on the list http://www.ft.com/cms/s/92d94ba6-24e4-11d8-81c6-08209b00dd01,gaid=060922005460.html, and Fortune Magazine called Griffin "the youngest of the rich hedge fund managers" http://money.cnn.com/magazines/fortune/fortune_archive/2004/09/20/381152/index.htm.
As of 2007, Griffin was the 117th richest American with an estimated net worth of $3 billion. http://www.forbes.com/lists/2007/54/richlist07_Kenneth-Griffin_BHED.html
Controversy
Kenneth Griffin has engaged in an ongoing recruiting rivalry with hedge fund manager Daniel S. LoebDaniel S. Loeb
Daniel Seth Loeb is an American hedge fund manager and founder of Third Point LLC, a New York based hedge fund managing over $7.5 billion in assets. Loeb is well-known in the financial world for writing public letters, in which he expresses disapproval of the performance and conduct of other...
of Third Point.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss One such hire made by Griffin prompted Mr. Loeb to pen a widely circulated letter stating: "Let me be clear that under no circumstances are you to approach any Third Point employees or attempt to offer them jobs... My warning extends to any attempt you may make to hire employees of my friends in the event driven space: should you attempt to hire people from them I will consider it a similar act of war. My friends' enemies become my enemies." Despite Loeb’s aggressive letter, many other hedge fund managers supported Griffin and his recruitment strategy, often admitting he is able to offer more competitive benefits due to the success of Citadel. David Einhorn, manager of Greenlight, went so far as to extend best wishes to the employee who joined Citadel.http://www.nytimes.com/2005/09/22/business/22hedge.html?ex=1285041600&en=135697136ca62305&ei=5090&partner=rssuserland&emc=rss
In 2005, at a presentation to Goldman Sachs http://web.archive.org/web/20070927215921/http://www.gs.com/our_firm/our_culture/corporate_citizenship/gmi/images/GMI_Panels/Griffin_paper.pdf, Griffin spoke favourably of credit derivatives. "The market for credit derivatives has effectively created a huge new pool of risk-taking capital for our debt markets. By unbundling and trading credit risk without having to transfer the underlying asset, this market has introduced an entirely new and vital way of spreading risk. Credit derivatives, to use one example,
let banks transfer risk from their portfolios, allowing them to create new loans. They also provide price transparency into instruments that might otherwise be hard to value. This represents an enormous improvement in our financial system – but one that could not have occurred without the innovation that competitive market dynamics trigger." Subsequent events have led some market observers to question the accuracy of this perspective. http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx
Three years later, Griffin testified to the House Committee on Oversight and Government Reform, stating that "[t]he rapid growth in the use of derivatives has created an opaque market whose outstanding notional value is measured in the hundreds of trillions of dollars. As a result, there is great concern about the systemic effects of the failure of anyone financial institution." http://oversight.house.gov/documents/20081113120556.pdf
In 2008, in common with many hedge funds, the performance of several of Citadel's key funds including its Kensington and Wellington funds was down 35% in the year to October.
Art collection
Apart from the business world, the hedge fund pioneer has devoted some of his time to collection and patronage of the arts http://www.cso.org/main.taf?erube_fh=csocom&csocom.submit.perfDetail=1&csocom.eventID=7228. He allegedly paid a record price ($60.5 million) for a painting by Paul CézannePaul Cézanne
Paul Cézanne was a French artist and Post-Impressionist painter whose work laid the foundations of the transition from the 19th century conception of artistic endeavour to a new and radically different world of art in the 20th century. Cézanne can be said to form the bridge between late 19th...
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk http://www.artnet.com/Magazine/news/artnetnews2/artnetnews5-19-05.asp, although another source reported that the painting was sold to a member of the Whitney family
Whitney family
The Whitney family is an American family notable for their social prominence, wealth, business enterprises and philanthropy, founded by John Whitney who came from London, England to Watertown, Massachusetts in 1635.-Rise to prominence:...
http://www.chiff.com/a/painting-top-ten.htm. In October 2006, Griffin purchased “False Start” by artist Jasper Johns
Jasper Johns
Jasper Johns, Jr. is an American contemporary artist who works primarily in painting and printmaking.-Life:Born in Augusta, Georgia, Jasper Johns spent his early life in Allendale, South Carolina with his paternal grandparents after his parents' marriage failed...
for $80 million from Dreamworks
DreamWorks
DreamWorks Pictures, also known as DreamWorks, LLC, DreamWorks SKG, DreamWorks II Distribution Co., LLC, DreamWorks Studios or DW Studios, LLC, is an American film studio which develops, produces, and distributes films, video games and television programming...
co-founder David Geffen
David Geffen
David Geffen is an American record executive, film producer, theatrical producer and philanthropist. Geffen is noted for creating Asylum Records in 1970, Geffen Records in 1980, and DGC Records in 1990...
http://www.nytimes.com/2006/10/12/arts/design/12geff.html?em&ex=1160798400&en=c01ce625884089d1&ei=5087%0A; in the same month he also donated $19 million to the Art Institute of Chicago http://www.belleville.com/mld/belleville/news/state/15742536.htm. A painting by Cézanne
Paul Cézanne
Paul Cézanne was a French artist and Post-Impressionist painter whose work laid the foundations of the transition from the 19th century conception of artistic endeavour to a new and radically different world of art in the 20th century. Cézanne can be said to form the bridge between late 19th...
and a bronze sculpture by Edgar Degas
Edgar Degas
Edgar Degas[p] , born Hilaire-Germain-Edgar De Gas, was a French artist famous for his work in painting, sculpture, printmaking and drawing. He is regarded as one of the founders of Impressionism although he rejected the term, and preferred to be called a realist...
, both owned by Griffin, are on display at the Institute
Art Institute of Chicago
The School of the Art Institute of Chicago is one of America's largest accredited independent schools of art and design, located in the Loop in Chicago, Illinois. It is associated with the museum of the same name, and "The Art Institute of Chicago" or "Chicago Art Institute" often refers to either...
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=asibq1F2VEMk.
In 2004, Kenneth and Anne Griffin were included by Art News in the magazine's ranking of the ten most active art collectors in the world http://www.findarticles.com/p/articles/mi_qn4155/is_20040709/ai_n12551632.
Philanthropy
Griffin is a member of several philanthropic boards, including a number of ChicagoChicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
organizations http://burgenstock.sfoa.org/2004/GriffinKen.htm. As a director of the Chicago Public Education Fund, he has stated, "The long term success of our country depends on the success of our public schools" http://www.cpef.org/nm_video.htm#. In 2003, Griffin was the recipient of the ARK award for his philanthropy http://www.arkonline.org/resources/Press%20Release%20-%2014.05.2003.pdf. In October 2006, the Griffins and the Bill and Melinda Gates Foundation opened a new charter school in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
called Woodlawn High School http://chronicle.uchicago.edu/061005/woodlawn.shtml. Griffin's foundation, Citadel Group Foundation, has contributed to the Art Institute of Chicago, public education
Public education
State schools, also known in the United States and Canada as public schools,In much of the Commonwealth, including Australia, New Zealand, South Africa, and the United Kingdom, the terms 'public education', 'public school' and 'independent school' are used for private schools, that is, schools...
http://www.cpef.org/p-10-million-goal.htm, the Children's Memorial Hospital in Chicago http://www.childrensmemorial.org/friends/foundation/corpgivingcircleofcorporatechampions.asp and the Chicago Symphony Orchestra http://www.cso.org/main.taf?p=12,8,4. Griffin has also made contributions to the Robin Hood Foundation http://www.forbes.com/2003/09/18/cz_mm_0918robinhood400s.html and has served on the committee for the Wall Street Poker Night Tournament, a philanthropic event http://www.mathforamerica.org/downloads/MFA_042106.pdf.
In October 2009 Griffin and his wife founded the Kenneth and Anne Griffin Foundation, donating $10 million for the Griffin Early Childhood Center and $16 million to Children's Memorial Hospital, among other contributions.
The Griffin Early Childhood Center, located in Chicago Heights, is an experimental educational effort run by John List
John A. List
John August List is The Homer J. Livingston Professor in Economics at the University of Chicago. He received his B.A. from the University of Wisconsin–Stevens Point, and his Ph.D. from the University of Wyoming in 1996...
, a University of Chicago economics professor, designed to test whether investing in teachers, or alternatively, in parents, produces better student performance in school.
Other information
Griffin serves on the Advisory Board of Eurasia GroupEurasia Group
-Overview:Eurasia Group is best known as the world's largest political risk consultancy with offices in New York, Washington, London, and Tokyo and more than 125 full-time employees...
http://www.eurasiagroup.net/about/index_people.php, the political risk consultancy, and on the Committee on Capital Markets Regulation
Committee on Capital Markets Regulation
The Committee on Capital Markets Regulation is an independent and nonpartisan 501 research organization dedicated to improving the regulation of U.S. capital markets.-Background:...
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/09-12-2006/0004430851&EDATE=. He has also been a member of the G100, a group of 100 CEOs that meets twice a year http://g100.com/pdf/g100_brochure.pdf.
In July 2004, Griffin married Anne Dias-Griffin
Anne Dias-Griffin
Anne Dias-Griffin is a French hedge fund manager, she works at Aragon Global Management, a $100 million fund focusing on global equities that she founded. It is one of the largest hedge funds managed by a woman. -Early life:...
in Versailles
Versailles
Versailles , a city renowned for its château, the Palace of Versailles, was the de facto capital of the kingdom of France for over a century, from 1682 to 1789. It is now a wealthy suburb of Paris and remains an important administrative and judicial centre...
http://www.timesonline.co.uk/article/0,,2095-1612477,00.html (the New York Times, however, reported the wedding occurred in 2003 http://www.nytimes.com/2006/11/22/business/22hedge.html?ref=business). Dias is the founder of Aragon Global Management, another Chicago-based hedge fund firm http://www.chibus.com/user/index.cfm?event=displayRegistrationPrompt&thereferer=http%3A//www.chibus.com/media/storage/paper408/news/2005/10/27/GsbNews/Cwibs.Annual.Fall.Conference-1036676.shtml%3Fnorewrite200604031456%26sourcedomain%3Dwww.chibus.com. They have one son.
In June 2002, Griffin was included in CFO Magazine's Global 100, a list of the most influential people in the world of finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
http://www.cfo.com/article.cfm/3005024. In June 2005, Griffin commented that the economic and political climate in Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
was now favorable for investors http://web.archive.org/web/20060324040309/http://www.mosnews.com/money/2005/06/28/investors.shtml. Griffin has also expressed his belief in the potential of electronic stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
s over floor-based ones http://burgenstock.sfoa.org/2004/documents/review_2004.pdf. Griffin has also commented on the need for clear rules from the SEC
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States...
regarding market timing
Market timing
Market timing is the strategy of making buy or sell decisions of financial assets by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis...
and redemption fees http://blogalization.nu/marketmachines/writing/at-harvard-hard-words-on-new-rules/. Griffin’s views on regulation and risk played out in a 2008 New York Times article where he was quoted, “’The unwillingness of the Federal Reserve and the S.E.C. to require working capital limits,’ he said, only exacerbates the risk-taking environment because the banks are playing the equivalent of no-limit poker”.
See also
- Anne Dias-GriffinAnne Dias-GriffinAnne Dias-Griffin is a French hedge fund manager, she works at Aragon Global Management, a $100 million fund focusing on global equities that she founded. It is one of the largest hedge funds managed by a woman. -Early life:...
- Citadel LLC
- The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
Kenneth Griffin
- Small bio
- Extensive II News Article on Griffin
- "Citadel Boss Won't Be Hedging On Day Job"
- Griffin's bipartisan political contributions
- "Risk and the Future of Our Capital Markets," a presentation by Griffin
- Interview with Harvard Investment Magazine
- Harvard Law School Panel questions current state of regulation for capital markets
- Picture of Kenneth and Anne Griffin
- Large picture and quote of Griffin
- Extensive Bloomberg article on Griffin
- 2 Videos featuring Griffin
- Fortune Magazine article about Griffin
- Extensive Interview With Griffin (July 2007), Risk Magazine, Navroz Patel
Forbes rankings
- Kenneth Griffin's info on the 2007 Forbes 400 list
- Kenneth Griffin's info on the 2007 global Forbes list of billionaires
- Kenneth Griffin's info on the 2006 Forbes 400 list
- Kenneth Griffin's info on the 2006 global Forbes list of billionaires (first appearance)
- Kenneth Griffin's info on the 2005 Forbes 400 list
- Kenneth Griffin's info on the 2004 Forbes 400 list
- Kenneth Griffin's info on the 2003 Forbes 400 list (first appearance)
Citadel LLC
- "Citadel turns chaos into cash"
- Chicago Business profile
- Prediction of possible Citadel IPO
- Extensive Bloomberg article on Griffin and Citadel
- Citadel's website
- Citadel's investment in Google
- IT technology at Citadel
Further reading
