Ken Griffin, financial prodigy turned industry giant


Nearly four decades ago, the South Florida Sun-Sentinel profiling three precious members of the Boca Raton Community High School computer club. While their classmates played basketball, the “disc-driven trio” prepared for a problem-solving competition with other Palm Beach geeks later that month.

It’s unclear what happened to Satish Vadapalli and Wayne Wong, who solved the challenges with pen and paper before passing on the solutions for their third member to hit a computer. But the latter would leave a big mark on the financial world.

Kenneth Cordele Griffin He is today one of the richest people in the world, with a fortune estimated at 26.5 billion dollars according to Forbes. He is primarily known for managing his Chicago-based $40 billion Citadel hedge fund. But in reality, his lesser-known but arguably more important computer-driven business venture citadel values is now the biggest key to his wealth and growing controversy.

this week faucet sold a stake for $1.15 billion at Citadel Securities to venture capital firms Sequoia Capital and Paradigm, electrifying the financial industry. The firm is the world’s largest algorithmic “market maker,” handling more than a quarter of all US stocks bought and sold every day. He is now considering cryptocurrencies and a likely initial public offering.

The deal valued Citadel Securities at $22 billion, adding $5 billion to Griffin’s net worth and raising it to 26 in the Forbes Table of the richest Americans. Many financial colleagues were enthusiastic about the deal.

“What made Michael Jordan Michael Jordan isn’t just that he jumps higher and runs faster, it’s sui generis. Ken is similar in his field,” says Lloyd Blankfein, a former CEO of Goldman Sachs and a friend of Griffin’s. “He’s a great merchant, but he’s also a great businessman, and those things don’t usually go together. It’s like a runner who wins both the 100-meter dash and the marathon.”

However, Griffin has also become a magnet for anger. For some, it embodies the financial industry and its supposed evils. In Chicago his political machinations raise the creeps. Conspiracy-minded retail investors on internet forums like wall street betting portray him as the malevolent boss of an evil financial empire, despite the fact that the US financial watchdog. debunked his claims.

Internally, Griffin is more respected than loved, and the culture is said to be brutally intense, even for Wall Street.

“There’s not a lot of empathy,” a former employee told the FT last year. “That can be an advantage when things are getting crazy, as I don’t think I feel stress the same way as others. There is only this desire to be the best at everything, and everyone helps you achieve it or not.”

in FT interview last year, replete with long pauses and fully formed clipped sentences in which he speaks, Griffin shrugged off such complaints: “If you’re prepared to enjoy being a good competitor, you love working here,” he said.

There were some hints of Griffin’s commanding momentum in Sun-Sentinel’s profile. The 17-year-old, captured wearing glasses, a scruffy striped shirt and a classic zip-up Adidas jacket, was already a prodigy at the time.

Active in the computer club, he was also president of the math club and a budding entrepreneur. The middle-class teenager had established a mail-order software company that sold educational programs to college professors from his home, allowing him to hide his youth from customers.

His first flirtation with finances came in 1980, when 11-year-old Griffin wrote a school article about how he planned to study the stock market. However, it was as a Harvard undergraduate that he began to trade aggressively, convincing his dorm to give it up. install a satellite dish in order to obtain up-to-date prices of the shares.

The dish was installed just in time for the Black Monday crash of 1987, when Griffin was already managing $265,000. Fortunately, he was betting that the stock would fall and he made a living. Griffin’s returns caught the attention of hedge fund pioneer frank meyer, which financed the launch of Citadel.

For the year 2001, Institutional Investor declared him the “Wonder child” of your industry. “Griffin is to hedge funds what pimple-faced dot-com billionaires were briefly to the internet: the god boy, the nerd made good, the self-taught financial scholar,” he wrote. A few years later, everything almost collapsed.

Wellington annual net returns column chart (%).  showing that Citadel has recovered from a near death experience in 2008

Despite its reputation for avoiding mistakes, Citadel lost a staggering $8 billion in the financial crisis. He was eventually forced to freeze investor withdrawals, often a death sentence.

instead of, Griffin resurrected Citadel As one of the undisputed giants of the hedge fund world, it spun off its high-frequency trading arm as Citadel Securities and turned it into a formidable company in its own right. In 2020, Citadel ranked fourth on the list of the highest-grossing funds of all time, with cumulative returns to investors of around $42 billion, while Citadel Securities profits from booming retail.

There is little sign that Griffin is particularly concerned about the opprobrium of Internet forums. When thousands of crypto enthusiasts raised more than $40 million to buy a rare copy of the first edition of the US Constitution last year, he overcome them on a whim, causing outrage. The winning bid of $43.2 million represented less than three days of Citadel Securities’ trading income.

“2008 almost brought him down, and he’s rebuilt himself like a wizard. It’s phenomenal,” said one hedge fund executive. “He’s like the Elon Musk of money.”

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