Kenneth C. Griffin

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For the organist, see Kenneth W. Griffin.
Kenneth C. Griffin
Born Kenneth Cordele Griffin
(1968-10-15) October 15, 1968 (age 45)
Daytona Beach, Florida, U.S.
Residence Chicago, Illinois, U.S.
Alma mater Harvard University
Occupation Founder & CEO, Citadel LLC
Hedge fund manager
Salary $700 million (2011)
Net worth Increase $3 billion(Mar. 2012)[1]
Religion Presbyterian Christian[2]
Spouse(s) Anne Dias-Griffin (m. 2004)

Kenneth Cordele Griffin (born October 15, 1968, Daytona Beach, Florida) is an American hedge fund manager. He is the founder and CEO of Citadel LLC, a Chicago-based investment firm.[3] 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 2012, he has an estimated net worth of $3 billion.[1]

For several years, Griffin avoided extensive press coverage in a manner similar to other hedge fund managers such as billionaire Steven A. Cohen.[4] As Citadel grew, he agreed that the firm would benefit from broader exposure and started opening up in 2001. More recently, Griffin has adopted a significantly more prominent media profile. He has appeared as the subject of a Bloomberg magazine cover story.[citation needed] He has also discussed his art purchases, charitable contributions, and political interests in a New York Times interview.[citation needed]. In 2012 he opened up about his political views in an interview with the Chicago Tribune.[5] With an estimated $14 billion (down from an estimated $20 billion previously) in assets under management, Citadel remains one of the world's largest hedge funds.[6]

Early career[edit]

Kenneth Cordele Griffin was born in 1968 in Daytona Beach, Florida and grew up in Boca Raton, Florida, where he attended Boca Raton Community High School. While still at Harvard University, 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. He got his first fund with $265,000, including money from his grandmother. This allowed him to profit off shorting the 1987 stock market crash.[7]

After graduating with a degree in economics in 1989, he won the attention of an investor named Frank C. Meyer, founder of Glenwood Capital. Meyer was amazed at Griffin's success and rate of return with his investments (which at the time were largely based on convertible bonds), and provided a relatively small investment for Griffin to invest ($1 million).[8] Griffin exceeded Meyer's expectations and according to The New York Times Meyer made 70%. 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.

CEO of Citadel[edit]

Citadel was officially founded November 1, 1990 with $4.2 million; the name "Citadel" was chosen to suggest strength in times of volatility.[9] With Citadel quickly growing, it began to perform well.

In 2008, the performance of several of Citadel's key funds including its Kensington and Wellington funds was down 35% in the year to October. The average hedge fund was down approximately 18% in 2008.[10]

Wealth accumulated[edit]

In 1986, Griffin became interested in investing after reading a Forbes Magazine article.[11] 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.[1]

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).[12][13] 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[14] In 2006, Griffin was the 5th youngest of only seven members of the Forbes 400 under the age of 40.[15]

His 2004 compensation was reportedly $240 million,[16] slightly higher than his 2003 compensation ($230 million).[17] His 2005 compensation was ranked 13th at $210 million[18] among the top 25 highest paid hedge fund managers.[19] 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.[20] In 2007, Griffin was had an estimated net worth of $3 billion.[21] In 2012, Griffin buys what is, at the time, the most expensive condo in Chicago, for 15 million dollars, on the 66th floor of the Park Tower.[22]

Reputation[edit]

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."[23] In June 2002, Griffin was included in CFO Magazine's Global 100, a list of the most influential people in the world of finance.[24]

In 2004, the Financial Times compiled an "alternative rich list" that titled Griffin as the "most precocious" on the list,[25] and Fortune Magazine called Griffin "the youngest of the rich hedge fund managers".[26] 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".[27]

Rivalry with Loeb[edit]

Griffin has engaged in an ongoing recruiting rivalry with hedge fund manager Daniel S. Loeb of Third Point.[28] 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."[28]

Politics[edit]

Overall views[edit]

In 2012, he said he was a Reagan Republican. He also said that "This belief that a larger government is what creates prosperity, that a larger government is what creates good: is wrong." He criticized the Democrats in Springfield (capital of Illinois) saying "Let's face it Governor Quinn, Mike Madigan (House Speaker), Cullerton (Senate Majority Leader), they're the majority. And they've been in the majority for a very long time. They've made promises to the citizens of this state, and, in particular, the state government employees, that have been reckless and irresponsible. And the issue is going to be how we best honor the promises that we've made to these employees and yet not bankrupt the state...It is very unfortunate that few politicians have been willing to deal with these issues truthfully, pragmatically and honorably over the last 15 years as this problem has come to the forefront." He has criticized the Obama administration for the Solyndra loans saying "government being involved in picking winners and losers invariably leads to a loss of economic freedom and encourages corruption."[29]

Donations[edit]

Individuals[edit]

1996
2002
2006
2009
2010
2012

Organizations[edit]

In 2010, he donated $500,000 to American Crossroads, $500,000 to Stand for Children Illinois (pro-education reform), $445,000 to Republicans in the Illinois State Legislature, $140,000 to Two Party System (support for centrists/independents running for state offices)

In 2012, Griffin, and his wife Anne, has given $150,000 to Restore Our Future (Romney Super PAC), $560,000 to the Republican Governors Association, $300,000 to American Crossroads, and $1.5 million to Americans for Prosperity.[33] Overall, Griffin has donated more than $2 million to date to the Super PACs American Crossroads and Restore Our Future.[34]

Views on financial regulations[edit]

In 2005, at a presentation to Goldman Sachs,[35] Griffin spoke favorably 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.[36]

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."[37]

In June 2005, Griffin commented that the economic and political climate in Russia was now favorable for investors.[38]

Griffin has also expressed his belief in the potential of electronic stock exchanges over floor-based ones.[39] Griffin has also commented on the need for clear rules from the SEC regarding market timing and redemption fees.[40] 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”.[41]

In May 2008, he criticized 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”.[41] "We, as an industry, dropped the ball. The industry needs to overhaul its thinking, accept greater regulation."[42]

2012 statement on political influence[edit]

When asked if he thought wealthy people had too much influence on politics he explained "I think they actually have an insufficient influence. Those who have enjoyed the benefits of our system more than ever now owe a duty to protect the system that has created the greatest nation on this planet."[43]

Other activities[edit]

Art collection[edit]

Apart from the business world, the hedge fund pioneer has devoted some of his time to collection and patronage of the arts.[44] He allegedly paid a record price ($60.5 million) for a painting by Paul Cézanne,[9][45] although another source reported that the painting was sold to a member of the Whitney family.[46]

In October 2006, Griffin purchased False Start by artist Jasper Johns for $80 million from Dreamworks co-founder David Geffen;[47] in the same month he also donated $19 million to the Art Institute of Chicago.[48] A painting by Cézanne and a bronze sculpture by Edgar Degas, both owned by Griffin, are on display at the Institute[9] 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.[49]

Philanthropy[edit]

Griffin is a member of several philanthropic boards, including a number of Chicago organizations.[50] 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".[51] In 2003, Griffin was the recipient of the ARK award for his philanthropy.[52] In October 2006, the Griffins and the Bill and Melinda Gates Foundation opened a new charter school in Chicago called Woodlawn High School.[53] Griffin's foundation, Citadel Group Foundation, has contributed to the Art Institute of Chicago,[54] public education,[55] the Children's Memorial Hospital in Chicago[56] and the Chicago Symphony Orchestra.[57] Griffin has also made contributions to the Robin Hood Foundation[58] and has served on the committee for the Wall Street Poker Night Tournament, a philanthropic event [2].

In October 2009 Griffin and his wife founded the Kenneth and Anne Griffin Foundation, donating $10 million for the Chicago Heights Early Childhood Center and $16 million to Children's Memorial Hospital, among other contributions.[59] The Chicago Heights 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.[60]

In February 2014 Griffin gave $150 million to his alma mater, Harvard University for undergraduate, need-based financial aid. This was the largest gift in Harvard's history to date.[61][62]

Board memberships[edit]

Griffin serves on the Advisory Board of Eurasia Group,[63] the political risk consultancy, and on the Committee on Capital Markets Regulation.[64] Since 2009 he has served on the board of E-Trade, with a seat on their Risk Oversight Committee.[65] He has also been a member of the G100, a group of 100 CEOs that meets twice a year.[66]

Personal life[edit]

In July 2004, Griffin married Anne Dias-Griffin in Versailles[67] (the New York Times, however, reported the wedding occurred in 2003[68]). Dias is the founder of Aragon Global Management, another Chicago-based hedge fund firm.[69] They have three children.

On July 23, 2014, after a one year separation period, Kenneth Griffin, filed for divorce from his wife, Anne Dias-Griffin in Cook County Circuit Court. The filing stated that “irreconcilable differences have caused the irretrievable breakdown of their marriage. Any attempt at reconciliation would be impracticable and not in the best interests of the family.”[70] A statement from Ms. Griffin's attorney, Robert Stephan Cohen, indicated the divorce could be contentious: “Ken Griffin unilaterally filed a divorce petition today with no notice to either me or my client, knowing full well that she had just left for summer vacation with their three young children and would therefore be unable to respond. Anne's highest priority remains her family, especially the well-being of her children. She is hopeful that this personal matter can be resolved privately and in the best interests of her children. We have no further comment at this time.”[71]

Kenneth C. Griffin and his wife, Ann, are members of the Fourth Presbyterian Church of Chicago. Together they donated $11 million of the $38.2 million needed to build a new chapel. The modern building is called "The Gratz Center" after the grandparents of Kenneth C. Griffin.[2]

See also[edit]

References[edit]

  1. ^ a b c Ken Griffin profile, Forbes.com. Accessed April 2011.
  2. ^ a b Kent, Cheryl (2012-12-19). "Fourth Presbyterian Church's new Gratz Center a welcome and brave grace note". Chicago Tribune. 
  3. ^ Citadel LLC
  4. ^ "Democratizing Hedge Funds"
  5. ^ Harris, Melissa (March 10, 2012). "Ken Griffin talks politics with the Tribune". Chicago Tribune. Retrieved 2013-11-25. 
  6. ^ Marek, Lynne (January 3, 2013). "Citadel outpaces rivals with 26% gain in 2012". Crain's Chicago Business. Retrieved 2013-11-25. 
  7. ^ http://www.chicagomag.com/Chicago-Magazine/June-2011/The-File-on-Citadels-Ken-Griffin/
  8. ^ "Kenneth Griffin, The World's Richest People". Forbes.com. 2006-02-13. Retrieved 2012-08-13. 
  9. ^ a b c "Bloomberg - Business, Financial & Economic News, Stock Quotes". Quote.bloomberg.com. Retrieved 2012-08-13. [dead link]
  10. ^ Barr, Alistair (2008-10-24). "Citadel's Griffin says firm will change amid turmoil". MarketWatch. Retrieved 2011-07-07. 
  11. ^ [1][dead link]
  12. ^ http://www.forbes.com/lists/results.jhtml?passListId=54&passYear=2003&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.  Missing or empty |title= (help)[dead link]
  13. ^ "America's rich get richer". CNN. 2003-09-19. 
  14. ^ George Mannes (2004-11-15). "Citadel Storms Into Google". TheStreet. Retrieved 2012-08-13. 
  15. ^ "The 400 Richest Americans". Forbes.com. 2006-09-21. Retrieved 2012-08-13. 
  16. ^ http://www.institutionalinvestor.com/pdf/pressRoom/presscoverage/independent_alpha_052805.pdf
  17. ^ "Inside Cover Story". NewsMax.com. 2004-07-20. Retrieved 2012-08-13. 
  18. ^ "Google Translate". Translate.google.com. Retrieved 2012-08-13. 
  19. ^ "Top hedge fund manager had take-home pay of $1.5 billion in 2005 on 5% fee and 44% of gains". Finfacts.com. Retrieved 2012-08-13. 
  20. ^ "Private Investment Funds". Alpha magazine. 2007. 
  21. ^ "#117 Kenneth Griffin". Forbes.com. 2007-09-20. Retrieved 2012-08-13. 
  22. ^ "Ken Griffin buyer of Chicago's most expensive condo". Chicago Tribune. 2012-11-29. 
  23. ^ Maday, Tom (September 2001) "Meet Ken Griffin" Institutional Investor
  24. ^ Lori Calabro and Alix Stuart (2002-06-20). "The Global 100: Risk Managers". CFO.com. Retrieved 2012-08-13. 
  25. ^ Published: July 12, 2004 17:17 (2004-07-12). "World business, finance, and political news from the Financial Times - FT.com UK". Ft.com. Retrieved 2012-08-13. 
  26. ^ "Rich kids The Google guys soar toward the top and a few humbled highfliers make comebacks. The biggest news: The appearance of some surprising mogulettes. (Welcome aboard, Mary-Kate and Ashley!) - September 20, 2004". Money.cnn.com. 2004-09-20. Retrieved 2012-08-13. 
  27. ^ "Financial News – Investment Banking, Securities and Asset Management". Financialnews-us.com. Retrieved 2012-08-13. 
  28. ^ a b Atlas, Riva D. (2005-09-22). "A Noted Poison Pen Starts a Hedge Fund Hiring Showdown". The New York Times. 
  29. ^ "Ken Griffin interview: Billionaire talks politics and money". Chicago Tribune. 2012-03-11. 
  30. ^ Huffington Post http://fundrace.huffingtonpost.com/neighbors.php?type=name&lname=Griffin&fname=Kenneth |url= missing title (help). 
  31. ^ Forbes http://www.forbes.com/profile/ken-griffin/ |url= missing title (help). 
  32. ^ http://www.opensecrets.org/usearch/index.php?q=Kenneth+Griffin&searchButt_clean.x=32&searchButt_clean.y=29&cx=010677907462955562473%3Anlldkv0jvam&cof=FORID%3A11
  33. ^ Meyer, Graham. "The File on Citadel’s Ken Griffin - Chicago magazine - June 2011 - Chicago". Chicagomag.com. Retrieved 2012-08-13. 
  34. ^ http://www.buyingyourfuture.org/
  35. ^ http://web.archive.org/web/20070927215921/http://www.gs.com/our_firm/our_culture/corporate_citizenship/gmi/images/GMI_Panels/Griffin_paper.pdf
  36. ^ http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx
  37. ^ http://oversight.house.gov/documents/20081113120556.pdf
  38. ^ http://web.archive.org/web/20060324040309/http://www.mosnews.com/money/2005/06/28/investors.shtml
  39. ^ http://burgenstock.sfoa.org/2004/documents/review_2004.pdf
  40. ^ http://blogalization.nu/marketmachines/writing/at-harvard-hard-words-on-new-rules/
  41. ^ a b Sorkin, Andrew (May 2008). "A Wish List for Fixing Wall Street". New York Times. 
  42. ^ Opalesque (13 May 2008). "Kenneth Griffin states industry needs to overhaul its thinking". 
  43. ^ Horowitz, Alana (2012-03-11). "Billionaire Romney Backer: Super Rich Have 'An Insufficient Influence' On Politics". Huffington Post. 
  44. ^ http://www.cso.org/main.taf?erube_fh=csocom&csocom.submit.perfDetail=1&csocom.eventID=7228
  45. ^ http://www.artnet.com/Magazine/news/artnetnews2/artnetnews5-19-05.asp
  46. ^ http://www.chiff.com/a/painting-top-ten.htm
  47. ^ Vogel, Carol (2006-10-12). "Works by Johns and de Kooning Sell for $143.5 Million". The New York Times. 
  48. ^ http://www.belleville.com/mld/belleville/news/state/15742536.htm
  49. ^ http://www.findarticles.com/p/articles/mi_qn4155/is_20040709/ai_n12551632.  Missing or empty |title= (help)
  50. ^ http://burgenstock.sfoa.org/2004/GriffinKen.htm
  51. ^ http://www.cpef.org/nm_video.htm#
  52. ^ http://www.arkonline.org/resources/Press%20Release%20-%2014.05.2003.pdf
  53. ^ http://chronicle.uchicago.edu/061005/woodlawn.shtml
  54. ^ Meyer, Graham (June 2011). "The File on Citadel's Ken Griffin". 
  55. ^ http://www.cpef.org/p-10-million-goal.htm
  56. ^ http://www.childrensmemorial.org/friends/foundation/corpgivingcircleofcorporatechampions.asp
  57. ^ http://www.cso.org/
  58. ^ http://archive.is/20130123190830/http://www.forbes.com/2003/09/18/cz_mm_0918robinhood400s.html
  59. ^ Meyer, Graham (June 2011). "The File on Citadels Ken Griffin". Chicago Magazine. 
  60. ^ Staley, Oliver (23 February 2011). "Chicago Economists Crazy Idea for Education Wins Ken Griffins Backing". Bloomberg. 
  61. ^ http://news.harvard.edu/gazette/story/2014/02/kenneth-griffin-makes-largest-gift-in-harvard-college-history/
  62. ^ Belkin, Douglas; Copeland, Rob (February 20, 2014). "Fund Chief Is Harvard's No. 1 Donor". The Wall Street Journal. pp. C1–C2. 
  63. ^ http://www.eurasiagroup.net/about/index_people.php
  64. ^ http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/09-12-2006/0004430851&EDATE=
  65. ^ https://investor.etrade.com/committees.cfm
  66. ^ http://g100.com/pdf/g100_brochure.pdf
  67. ^ The Times (London) http://www.timesonline.co.uk/article/0,,2095-1612477,00.html |url= missing title (help). 
  68. ^ Anderson, Jenny (2006-11-22). "Executive at Stock Unit Said to Leave Hedge Fund". The New York Times. 
  69. ^ 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
  70. ^ http://www.chicagobusiness.com/article/20140724/BLOGS03/140729871/ken-griffin-says-prenup-is-valid-binding-enforceable
  71. ^ http://www.chicagobusiness.com/article/20140723/BLOGS03/140729899/billionaire-ken-griffin-files-for-divorce

Further reading[edit]

External links[edit]

Kenneth Griffin[edit]

Forbes rankings[edit]

Citadel LLC[edit]