Ken Griffin, a financial marvel that has become an industrial giant

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Nearly four decades ago, the South Florida Sun-Sentinel profiled three despised members of the Boca Raton Community High School information club. While their classmates were throwing hoops, the “disc-powered trio” was preparing to compete in solving problems with other Palm Beach geeks later that month.

It is unclear what happened to Satisha Vadapalli and Wayne Wong, who tackled the challenges with pen and paper before handing over the killing solutions to a computer to their third member. But the latter will leave a big mark in the financial world.

Kenneth Cordele Griffin today he is one of the richest people in the world, with a fortune estimated by Forbes at $ 26.5 billion. He is best known for running his $ 40 billion Chicago-based hedge fund Citadel. But in reality, its a lesser known but probably more important computer-powered trading company Citadel Securities now the greatest key to his wealth is – and growing controversy.

This week Griffin sold a $ 1.15 billion stake at Citadel Securities for venture capital firms Sequoia Capital and Paradigm, electrifying the financial industry. The company is the world’s largest algorithmic “market-maker”, managing a quarter of all US stocks that are bought and sold every day. He is now looking at cryptocurrencies and probably an initial public offering.

The deal estimated Citadel Securities at $ 22 billion, adding $ 5 billion to Griffin’s net worth and raising it to $ 26 billion. Forbes table of the richest Americans. Many fellow financiers were upset about the deal.

“What made Michael Jordan make Michael Jordan not only jump higher and run faster, he is 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 trader, but he’s also a great businessman, and those things don’t go together often. It’s like a runner who wins both the 100-meter dash and the marathon. ”

Yet Griffin has also become a magnet for anger. For some, he embodies the financial industry and its alleged illnesses. In Chicago his political machinations raise hackles. Conspiracy-oriented retail investors on online forums such as WallStreetBets portray him as a malicious leader of an evil financial empire, even though he is an American financial guardian refuted their claims.

Inside, 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 FT employee told last year. “It can be an advantage when things go crazy, because I don’t think he feels stressed in the same way as everyone else. There is only that desire to be the best in everything and everyone is either helping him or not. ”

In FT interview last year, full of long pauses and fully formed cut sentences in which he speaks, Griffin dismissed such complaints: “If you’re willing to enjoy being a good competitor, you love working here,” he said.

There were a few hints of Griffin’s mighty ride in the Sun-Sentinel profile. The 17-year-old – caught in glasses, a ragged striped shirt and a classic Adidas jacket with a zipper – was already a miracle at the time.

Active in the IT club, he was also the president of the math club and a budding entrepreneur. A middle-class teenager, he founded a mail-order software company that sold educational programs to professors at colleges outside his home, which allowed him to hide his youth from customers.

His first association with finance came in 1980, when he was 11-year-old Griffin wrote school work on how he planned to study the stock market. Yet, as a Harvard student, he was the first to trade aggressively, famously persuading his dorm to let him install a satellite dish to be able to get updated stock prices.

The vessel was set just in time for the Black Monday 1987 crash, when Griffin was already managing $ 265,000. Fortunately, he bet on a stock drop and committed murder. Griffin’s returns have attracted the attention of hedge fund pioneers Frank Meyer, which funded the launch of the Citadel.

Until 2001, the Institutional Investor declared it “the boy wonders”Of their industry. “Griffin is for fundraising what buggy dotcom billionaires were briefly on the Internet: god boy, nerd has become a good, self-taught financial expert,” he writes. A few years later, everything almost collapsed.

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

instead of that, Griffin resurrected the Citadel as one of the world’s undisputed giants hedge funds, it has developed its high-end trading industry as Citadel Securities and built it into a powerful company for itself. In 2020, Citadel ranked fourth on the list of highest-earning funds of all time, with a cumulative return for investors of about $ 42 billion, while Citadel Securities made a profit from the retail boom.

There are few signs that Griffin is particularly concerned about the embarrassment of online forums. When thousands of cryptocurrency enthusiasts raised more than $ 40 million last year to buy a rare copy of the U.S. Constitution in its first edition, he surpass them out of whim, provoking rage. The winning bid of $ 43.2 million was less than three days of Citadel Securities trading income.

“2008. it almost toppled him, and he was rebuilt as a magician. It’s phenomenal, “said one hedge fund chief executive. “He’s like Elon Musk of money.”

robin.wigglesworth@ft.com

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