Meet Kenneth Griffin, ‘the Elon Musk of money’
He is mostly known for running his $US40 billion Chicago-based hedge fund Citadel. But in reality, his lesser-known yet arguably more important computer-powered trading firm, Citadel Securities, is now the biggest key to his wealth – and mounting controversy.
Last week, Griffin sold a $US1.15 billion stake in Citadel Securities to venture capital firms Sequoia Capital and Paradigm, electrifying the finance industry.
The firm is the world’s biggest algorithmic “market-maker”, handling over a quarter of all US stocks bought and sold every day. Now it is eyeing cryptocurrencies, and a likely initial public offering.
The deal valued Citadel Securities at $US22 billion, adding $US5 billion to Griffin’s net worth and lifting him to 26 in the Forbes table of the richest Americans.
Many fellow financiers were agog at the deal.
“What made Michael Jordan Michael Jordan is not just that he jumps higher and runs faster, he’s sui generis. Ken is similar in his field,” says Lloyd Blankfein, the former chief executive of Goldman Sachs and a friend of Griffin.
“He’s a great trader, but he’s also a great businessperson, and those things don’t often go together. It’s like a runner who wins in both the 100-metre dash and a marathon.”
Nonetheless, Griffin has also become a magnet for ire.
For some he embodies the finance industry and its supposed ills. In Chicago, his political machinations raise hackles.
Conspiracy-minded retail investors on internet forums such as WallStreetBets portray him as the malevolent head of an evil financial empire, even though the US financial watchdog debunked their claims.
More respected than loved
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,” one former employee told the Financial Times last year.
“That can be an asset when things are going crazy, as I don’t think he feels stress the same way as everyone else. There’s just this desire to be the best at everything, and everyone is either helping him accomplish that, or not.”
In an FT interview last year, replete with the long pauses and fully formed clipped sentences he speaks in, Griffin shrugged off such complaints: “If you’re wired to enjoy being a good competitor, you love working here,” he said.
There were a few hints of Griffin’s towering drive in the Sun-Sentinel profile. The 17-year-old – captured in spectacles, a dishevelled stripy shirt and classic zip-up Adidas jacket – was already a prodigy at the time.
Active in the computer club, he was also president of the maths club and a budding entrepreneur. The middle-class teenager had set up a mail-order software firm selling educational programs to college professors out of his home, which allowed him to hide his youth from customers.
His first dalliance with finance came in 1980, when the 11-year-old Griffin wrote a school paper on how he planned to study the sharemarket. Yet, it was…