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 46)
Daytona Beach, Florida, U.S.
Residence Chicago, Illinois, U.S.
Alma mater Harvard University
Occupation Founder & CEO, Citadel
Salary $900 million (2013)
Net worth Increase $5.5 billion (Oct. 2014)[1]
Religion Presbyterian Christian[2]
Spouse(s) Anne Dias-Griffin (m. 2004)

Kenneth C. Griffin (born October 15, 1968, Daytona Beach, Florida) is an American hedge fund manager. Griffin is the founder and CEO of Citadel, a global investment firm.[3][4] Citadel's group of hedge funds rank among the largest and most successful hedge funds in the world.[3] Forbes identified Griffin as one of 2012’s highest earning hedge fund managers as well as one of the Forbes 400.[5]

Griffin had an estimated net worth of $5.5 billion in October 2014.[1] With an estimated $24 billion in investment capital as of September 2014, Citadel is one of the world's largest alternative investment management firms.[6][7][8] At the beginning of 2014, Griffin made a $150 million donation to the financial aid program at Harvard University, his alma mater. The donation was the largest single donation ever made to the institution at the time.[9][10]

Early life and education[edit]

Kenneth C. Griffin was born in 1968 in Daytona Beach, Florida and grew up in Boca Raton, Florida, where he attended Boca Raton Community High School.[11][12] Griffin first became interested in investing in 1986 after reading a Forbes Magazine article.[13][14] While still a freshman at Harvard University, he started trading from his dorm room. He installed a satellite link to his dorm to acquire real-time market data. Griffin’s first fund, launched in 1987, focused on convertible bond arbitrage and was capitalized with $265,000 from friends and family, including money from his grandmother.[11] The investment strategy helped preserve capital during the stock market crash of 1987 while also creating a number of dislocations in the marketplace for Griffin to take advantage of. Griffin's success enabled him to launch a second fund, and between the two funds he was managing just over $1 million.[11][12] Griffin graduated from Harvard in 1989 with a degree in economics.[3]

Career[edit]

After graduating from Harvard, Frank C. Meyer, an investor and founder of Glenwood Capital, provided Griffin with $1 million to invest.[15] Griffin exceeded Meyer's expectations and according to The New York Times Meyer made 70 percent on the investment.

Citadel[edit]

Citadel was founded by Griffin in 1990 with $4.2 million.[16] The company was initially named Wellington Financial Group until the firm officially changed the name to Citadel in 1994. The name Citadel was chosen to suggest strength in times of volatility.[17]

By 1998, Citadel had grown to a team of over 100 employees and $1 billion in investment capital.[17] In June 2002, Griffin was included in CFO Magazine's Global 100, a list of the most influential people in the world of finance.[18]

After nearly twenty years in the industry, Griffin has appeared numerous times in Forbes' Forbes 400 as CEO of Citadel. 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 following Ziff Davis heir Daniel Ziff.[19] 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, United States-based wealth.[20] In 2006, Griffin was the fifth youngest of the seven members under the age of 40 listed on the Forbes 400.[21] In 2006, Citadel became the first hedge fund manager to issue publicly traded debt bonds.[22] In 2007, Griffin was had an estimated net worth of $3 billion.[23] By 2014, Griffin’s net worth was estimated at $5.5 billion.[1]

Views on market structure[edit]

Griffin has voiced his stance on issues on financial regulations and market structure throughout his years as a business executive and has testified at government hearings with U.S. Senate committees.[24]

Griffin, along with NASDAQ Executive Vice President Thomas A. Whittman and Dave Lauer, president of KOR Group LLC, has voiced concerns about regulation failing out of pace with changes in market behavior. An example of this is how certain privileges allow dark pools to discriminate against customers over others.[25] In light of the 2007-08 financial crisis, Griffin stated that the market needs to be able to withstand malfunctions by establishing preventative measures and fail-safe plans.[26]

During a 2005 presentation at Goldman Sachs, Griffin spoke favorably of credit derivatives, citing price transparency for financial instruments and positive impacts on debt markets.[27]

Three years later, Griffin testified to the United States House Committee on Oversight and Government Reform, stating that "The 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."[28]

Griffin has also expressed his belief in the potential of electronic stock exchanges over floor-based ones.[29] Additionally, Griffin has commented on the need for clear rules from the SEC regarding market timing and redemption fees.[30] He explained his views on regulation and risk in a 2008 New York Times article where he was quoted as saying "The unwillingness of the Federal Reserve and the S.E.C. to require working capital limits only exacerbates the risk-taking environment because the banks are playing the equivalent of no-limit poker."[31]

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...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."[31] Griffin has also stated: "We, as an industry, dropped the ball. The industry needs to overhaul its thinking, accept greater regulation."[32]

In 2014, Griffin provided testimony at a U.S. Senate Committee[33] hearing on “The Role of Regulation in Shaping Equity Market Structure and Electronic Trading,” in which he reiterated the need to have industry regulations catch up with the changes in market structure to increase the fairness and resilience of American Equity markets.[24]

Other activities[edit]

Board memberships[edit]

Griffin serves on the Advisory Board of Eurasia Group,[34] a political risk consultancy, and the Committee on Capital Markets Regulation.[35] Griffin has also been a member of the G100, a network of 100 CEOs that meets twice a year to discuss global business and initiatives.[36][37][38]

In 2014, Griffin was elected to a five year term on the University of Chicago’s Board of Trustees.[3] He is also a member of the Board of Trustees for the Art Institute of Chicago and the Museum of Contemporary Art. Additionally, Griffin is a member of a number of organizations including the World Economic Forum, the Economic Club of Chicago, and the Civic Committee of the Commercial Club of Chicago.[39] Griffin also serves as the vice chairman of the Chicago Public Education Fund.[40]

Philanthropy[edit]

Griffin has donated hundreds of millions of dollars to causes since 1999, including tens of millions to institutions in Chicago.[41] Griffin is a member of several philanthropic boards, including a number of organizations in Chicago.[42] In October 2006, the Griffins and the Bill and Melinda Gates Foundation funded and supported the opening of a new charter school in Chicago called Woodlawn High School.[43]

Griffin and his wife founded the Kenneth and Anne Griffin Foundation in October 2009. The foundation's contributions include $10 million for the Chicago Heights Early Childhood Center and $16 million to Children's Memorial Hospital, and funding the University of Chicago’s Early Childhood Center, and others.[11][44] 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.[45]

Through the Citadel Group Foundation (CGF), Griffin has contributed to the Art Institute of Chicago,[11] public education,[44] the Children's Memorial Hospital in Chicago,[46] the Chicago Public Library and the Chicago Symphony and Orchestra.[44] Griffin has also made contributions to the Robin Hood Foundation[47] and has served on the committee for the Wall Street Poker Night Tournament, a philanthropic event.[2] Additionally, CGF has made donations totaling to over $400,000 to the Museum of Science and Industry, and over $480,000 in donations to the Absolute Return for Kids program, a London-based charity supporting child health, education and protection.[44]

In February 2014, Griffin gave $150 million to his alma mater, Harvard University for need-based undergraduate financial aid. At the time it was the largest single gift in Harvard's history.[48][49][50]

Art collection[edit]

Apart from the business world, Griffin has devoted some of his time to the collection and patronage of art. He allegedly paid a record price of $60 million for Paul Cézanne's painting Curtain, Jug and Fruit Bowl in 1999.[51] In October 2006, Griffin purchased False Start by artist Jasper Johns for $80 million from Dreamworks co-founder David Geffen.[52]

Politics[edit]

In 2012, Kenneth Griffin said in an interview with the Chicago Tribune that 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."[53] After the 2007-08 financial crisis, Griffin has made political contributions and donations to political candidates, parties, and organizations that supported his views of limited government such as American Crossroads, the Republican Governors Association, and Restore Our Future a Super PAC that supported Mitt Romney's presidential bid.[53][11]

Personal life[edit]

Griffin married Anne Dias-Griffin, the founder of Aragon Global Management, another Chicago-based hedge fund firm, in July 2004.[54] They have three children together.[54]

In July 2014, after a one year separation period, Kenneth Griffin, filed for divorce from his wife in Cook County Circuit Court stating “irreconcilable differences.”[55]

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 at the church. The modern building is called "The Gratz Center" in honor of Griffin’s grandparents.[2]

References[edit]

  1. ^ a b c "Ken Griffin". Forbes. Retrieved 25 January 2015. 
  2. ^ a b c Kent, Cheryl (19 December 2012). "Fourth Presbyterian Church's new Gratz Center a welcome and brave grace note". Chicago Tribune. 
  3. ^ a b c d Allen, Susie; Huang, Wen (15 July 2014). "Two new members elected to University of Chicago Board of Trustees". University of Chicago News. Retrieved 25 January 2015. 
  4. ^ "About Citadel's Leadership". Citadel. Retrieved 25 January 2015. 
  5. ^ Nathan Vardi (26 February 2013). "The 40 Highest-Earning Hedge Fund Managers And Traders". Forbes. Retrieved 25 January 2015. 
  6. ^ Marek, Lynne (January 3, 2013). "Citadel outpaces rivals with 26% gain in 2012". Crain's Chicago Business. Retrieved 2013-11-25. 
  7. ^ Bloomberg Markets & Bloomberg Rankings (3 January 2013). "The 100 Top-Performing Large Hedge Funds". Bloomberg. Retrieved 25 January 2015. 
  8. ^ John Lauerman (20 February 2014). "Citadel’s Griffin Gives Harvard $150 Million for Student Aid". Bloomberg. Retrieved 25 January 2015. 
  9. ^ Svea Herbst-Bayliss (19 February 2014). "Hedge fund manager Griffin gives $150 million to Harvard". Reuters. Retrieved 25 January 2015. 
  10. ^ Melissa Harris (19 February 2014). "Billionaire Chicagoan Ken Griffin donates $150 million to Harvard". Chicago Tribune. Retrieved 25 January 2015. 
  11. ^ a b c d e f Meyer, Graham (June 8, 2011). "The File on Citadel’s Ken Griffin". Chicago Magazine. Retrieved 30 November 2014. 
  12. ^ a b "Ken Griffin". Esquire. 9 October 2008. Retrieved 25 January 2015. 
  13. ^ Paul Milnes (21 April 2014). "Ken Griffin – Wall Street’s Boy Wonder". HedgeThink. Retrieved 25 January 2015. 
  14. ^ Sheelah Kolhatkar (16 April 2007). "Opening Up the Citadel". Upstart Business Journal. Retrieved 25 January 2015. 
  15. ^ "Kenneth Griffin, The World's Richest People". Forbes.com. 13 February 2006. Retrieved 13 August 2012. 
  16. ^ Michael Barris (23 May 2014). "US hedge fund raises money from wealthy Chinese to invest abroad". China Daily. Retrieved 25 January 2015. 
  17. ^ a b "Citadel Overview". Citadel. Retrieved 25 January 2015. 
  18. ^ Miles, Paul (April 21, 2014). "Ken Griffin – Wall Street’s Boy Wonder". Hedge Think. Retrieved 25 January 2015. 
  19. ^ "America's rich get richer". CNN. 19 September 2003. 
  20. ^ George Mannes (15 November 2004). "Citadel Storms Into Google". TheStreet. Retrieved 13 August 2012. 
  21. ^ "The 400 Richest Americans". Forbes.com. 21 September 2006. Retrieved 13 August 2012. 
  22. ^ Paul Fruchbom (2 April 2007). "Predicting the next big hedge fund IPO". Fortune. Retrieved 25 January 2015. 
  23. ^ "#117 Kenneth Griffin". Forbes.com. 20 September 2007. Retrieved 13 August 2012. 
  24. ^ a b "Testimony of Mr. Kenneth Griffin". United States Senate Committee on Banking, Housing, & Urban Affairs. 8 July 2014. Retrieved 25 January 2015. 
  25. ^ Michaels, Dave; Hopkins, Cheyenne (8 July 2014). "High-Speed Trading Risk Blamed on U.S. Market Regulations". Bloomberg. Retrieved 25 January 2015. 
  26. ^ William Alden (8 July 2014). "At Senate Hearing, Wall Street Executives Share Concerns About the Market". New York Times. Retrieved 18 December 2014. 
  27. ^ Kenneth C. Griffin (22 September 2005). "Risk and the Future of Our Capital Markets". Goldman Sachs. Archived from the original on 20 January 2007. Retrieved 25 January 2015. 
  28. ^ Jenny Strasburg (14 November 2008). "Capitol Hill Questions Hedge-Fund Managers". Wall Street Journal. Retrieved 25 January 2015. 
  29. ^ "Review of the 25th Burgenstock Meeting". Swiss Derivatives Review. Retrieved 30 November 2014. 
  30. ^ Colin Brayton (14 March 2005). "At Harvard, Hard Words on New Rules". The New Market Machines. Archived from the original on 25 May 2006. Retrieved 25 January 2015. 
  31. ^ a b Sorkin, Andrew (May 2008). "A Wish List for Fixing Wall Street". New York Times. 
  32. ^ Opalesque (13 May 2008). "Kenneth Griffin states industry needs to overhaul its thinking". 
  33. ^ "Wall St trade group proposes reforms to U.S. equity market". Reuters. 14 July 2014. Retrieved 25 January 2015. 
  34. ^ "Advisory Board". Eurasia Group. Retrieved 25 January 2015. 
  35. ^ "New Independent Non-Partisan Committee to Study Capital Markets Regulation and Make Recommendations to Key Policy Makers" (Press release). New York City: PR Newswire. 12 September 2006. Retrieved 25 January 2015. 
  36. ^ http://g100.com/pdf/g100_brochure.pdf
  37. ^ "About G100". G100. Retrieved 18 December 2014. 
  38. ^ "G100 Network Notebook". SSA. March 2012. Retrieved 25 January 2015. 
  39. ^ "Kenneth C. Griffin". The Chicago Public Education Fund. Retrieved 18 December 2014. 
  40. ^ John Lauerman (20 February 2014). "Citadel’s Griffin Gives Harvard $150 Million for Student Aid". Bloomberg. Retrieved 18 December 2014. 
  41. ^ "Who are Ken and Anne Dias Griffin?". Chicago Tribune. 7 November 2014. Retrieved 18 December 2014. 
  42. ^ "Kenneth C. Griffin". Retrieved 25 January 2015. 
  43. ^ William Harms. "Woodlawn, University partners in education through Charter School". The University of Chicago Chronicle. Retrieved 25 January 2015. 
  44. ^ a b c d Robert Reed (29 June 2007). "Hedge Fun". Chicago Magazine. Retrieved 18 December 2014. 
  45. ^ Staley, Oliver (23 February 2011). "Chicago Economists Crazy Idea for Education Wins Ken Griffins Backing". Bloomberg. 
  46. ^ Harris, Melissa; Japsen, Bruce (7 January 2010). "Kenneth and Anne Griffin give $16 million to Children's Memorial Hospital". Chicago Tribune. Retrieved 18 December 2014. 
  47. ^ Matthew Miller (18 September 2003). "From The Rich To The Poor". Forbes. Retrieved 25 January 2015. 
  48. ^ Staff (19 February 2014). "Kenneth Griffin makes largest gift in Harvard College history". Harvard Gazette. Retrieved 25 January 2015. 
  49. ^ Belkin, Douglas; Copeland, Rob (February 20, 2014). "Fund Chief Is Harvard's No. 1 Donor". The Wall Street Journal. pp. C1–C2. 
  50. ^ De La Merced, Michael J. (February 19, 2014). "Founder of Citadel Pledges $150 Million to Harvard, Its Largest Gift Ever". New York Times. Retrieved 30 November 2014. 
  51. ^ "Hedge Fund Dough Pushes Up Art Prices: WSJ". Artnet. 19 May 2005. Retrieved 25 January 2015. 
  52. ^ Vogel, Carol (12 October 2006). "Works by Johns and de Kooning Sell for $143.5 Million". The New York Times. 
  53. ^ a b Melissa Harris (11 March 2012). "Ken Griffin interview: Billionaire talks politics and money". Chicago Tribune. Retrieved 18 December 2014. 
  54. ^ a b De La Merced, Michael J.; Stevenson, Alexandra (24 July 2014). "A Divorce That Thrusts Ken Griffin and Anne Dias Griffin Into the Spotlight". 
  55. ^ Shia Kapos (24 July 2014). "Ken Griffin says prenup is 'valid, binding, enforceable'". Chicago Business. Retrieved 25 January 2015. 

Further reading[edit]

External links[edit]

Citadel LLC[edit]