Kenneth C. Griffin: A Story of Passion and Conviction in Financial World
American hedge fund manager, businessman, and investor Kenneth Cordele Griffin founded the international hedge fund Citadel LLC and serves as its founder, CEO, and co-chief investment officer. He is 80% the owner of it. One of the biggest market makers in the United States, Citadel Securities, is also owned by him.
Griffin had a net worth of $27.2 billion in 2022 and was ranked 53rd on the Forbes 400 list of the richest people in the United States. Griffin was named to Forbes’ 2023 list of America’s Most Generous Givers, which stated that he has donated $1.56 billion to various charitable causes, primarily education, economic mobility, and medical research.
Griffin has given tens of millions of dollars to political candidates and causes, mostly those associated with the Republican Party. He has also contributed to a variety of charitable causes, particularly those related to education and the arts. He owns personal properties worth more than $1 billion and an art collection of $800 million.
Griffin, a construction materials executive’s son, was born in 1968 in Daytona Beach, Florida. Griffin’s father had a variety of occupations, including managing projects for General Electric. Genevieve Huebsch Gratz, Griffin’s grandmother, received three farms, an oil company, and a seed company as inheritances.
Griffin was born in Wisconsin, lived in Texas for a while, and was raised in Boca Raton, Florida. He attended Boca Raton Middle School before transferring to Boca Raton Community High School, where he served as the math club president. Griffin operated EDCOM, a low-cost mail-order provider of educational software, out of his bedroom while still in high school. Griffin predicted that he would become a businessman or lawyer and that the demand for computer programmers would decline dramatically over the following ten years in a 1986 piece in the Sun-Sentinel.
Beginning in the fall of 1986, Griffin enrolled at Harvard College. One of his first investments that year was the purchase of put options on Home Shopping Network, which brought in a $5,000 profit. Additionally, he made investments in convertible bond arbitrage opportunities. Griffin persuaded school officials to give him permission to build a satellite dish on the roof of the Cabot House dormitory in order to collect stock quotes, despite the fact that conducting business from campus was prohibited.
Also, Griffin requested that Terrence J. O’Connor, manager of convertible bonds at Merrill Lynch in Boston, open a trading account for him using $100,000 that Griffin had received from his grandmother, his dentist, and other sources. A few days after turning 19 in 1987, his first fund was established with $265,000. The fund began in time for Black Monday(1987) when short positions could be profitable. Griffin obtained a bachelor’s degree in economics in 1989.
Griffin relocated to Chicago after earning his degree in 1989 to work with Frank Meyer, the founder of Glenwood Capital Investments. Griffin received $1 million from Meyer’s Glenwood investment for trading, and after a year, Griffin earned 70%.
Griffin started Citadel LLC a year later, in 1990, with $4.6 million in assets under control thanks to contributions from Meyer. His investment portfolio made 43% in 1991 and 40% in 1992. Griffin founded Citadel Securities, a market maker in the early 2000s.
Griffin was the principal investor in Aragon Global Management, a hedge fund operated by his then-wife Anne Dias-Griffin, from the time of their marriage in 2003 until late 2009. Julian Robertson also contributed money to the charity as a seed. Ken’s stake in the fund was down 20%.
Citadel paid a pittance in 2006 to purchase the positions held by Amaranth Advisors. Griffin faced backlash for preventing his investors from retrieving money for ten months during the 2007–2008 financial crisis. When things were worst, the business was losing “hundreds of millions of dollars each week.” The largest funds at Citadel ended 2008 down 55% due to the 7:1 leverage. However, they made a comeback in 2009, returning 62%.
Griffin’s net worth reportedly topped $20 billion in November 2020 as a result of a spike in Citadel’s value, in which Griffin owned a $11.2 billion stake. Due to higher volatility, volume, and retail trader participation, market maker Citadel Securities saw its earnings rise to $2.36 billion in the first half of 2020 from $982 million for the same period in 2019.
Griffin came under fire in January 2021 for Citadel’s involvement in the GameStop short squeeze. Melvin Capital, which had lost more than 30% due to its short positions, mainly on GameStop, was informed on January 25 that Griffin’s Citadel would invest $2 billion in the company. The price of GME stock dropped precipitously shortly after Robinhood, an electronic trading platform that many traders used to purchase GameStop stock and options, abruptly announced that it would stop all purchases of GameStop securities except to cover short positions and would only permit these securities to be sold if already held (but not sold short).
Many commentators criticised the potential for a conflict of interest when the same entity both plays the role of market-maker and also participates in the market that it makes because Robinhood receives a significant portion of its revenue from a payment for order flow relationship with Citadel Securities LLC, which is 85% owned by Griffin. Griffin has been at the centre of much discussion on this controversy.
Griffin is a member in the Fourth Presbyterian Church in Chicago where he also got married. Griffin provided $11.5 million of the $38.2 million required to erect a new chapel at the church in 2011. In honor of Griffin’s grandparents, the contemporary structure is referred to as “The Gratz Center.”
His high school sweetheart Katherine Weingartt was Griffin’s first wife but in 1996 the couple got divorce. After a mutual acquaintance paired them up on a blind date in March 2002, Griffin met his second wife Anne Dias-Griffin. She is a French-born Harvard Business School graduate who formerly worked for Goldman Sachs, Soros Fund Management, and Viking Global Investors before founding the $55 million company Aragon Global Management in Chicago.
The couple was blessed with three kids after getting married in July 2003. Griffin filed for divorce from his second wife in Cook County, Illinois, citing “irreconcilable differences,” in July 2014. Only hours before a public trial over the prenuptial agreement was scheduled to start, the couple reached an out-of-court divorce arrangement in October 2015.
As part of their divorce settlement Griffin bought his wife’s interest in their Chicago penthouse for $11.75 million. He continues to share custody of his kids with his former spouse. Griffin is the owner of two private aircraft: a 2001 Bombardier Global Express valued at $9.5 million and a 2012 Bombardier Global 6000 valued at $50 million.
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