Inside Ken Griffin’s rise to one of Wall Street’s most powerful people, and why politics could be next

“JB? JB and I usually are not on talking phrases today,” mentioned Ken Griffin, the billionaire hedge-fund supervisor, referring to JB Pritzker, the Democratic governor of Illinois. 

 Griffin was carrying a light-blue costume shirt that wrinkled round his delicate stomach, swimsuit pants, and untied black Oxfords. It was round 5:30 p.m. on a scorching and humid Miami day final summer time. I had come to a rented WeWork house 23 flooring above the palm timber and million-dollar yachts to interview Griffin about his choice to relocate from Chicago.

We would spent two hours speaking earlier than I lastly requested the query on everybody’s minds: Was Griffin’s transfer politically motivated? 

Griffin had publicly feuded with Pritzker over Chicago’s crime, Illinois state taxes, and learn how to run the federal government of the nation’s sixth-most-populous state. However with a June announcement that he would transfer his enterprise to Miami, Griffin had rid himself of getting to make good with Pritzker. 

In Florida, Griffin has thrown in his lot with the state’s Republican governor, Ron DeSantis, who has taken President Trump’s Make America Nice Once more insurance policies, added extra self-discipline, and ridden it to the highest of the get together’s presumptive 2024 presidential-candidate ticket. Griffin is now poised to supply his help to the potential nominee if wanted.

Griffin, who’s 54, informed me he would function Treasury secretary, however provided that the nation is in financial hassle. “If the US was in a maelstrom,” he mentioned, “I would do it in a heartbeat.” Based mostly on feedback he made final 12 months, Griffin has even thought-about working for workplace. 

Politicians have to have the interpersonal expertise to work a room of potential voters. As I would referred to as round to present and former colleagues and others in his orbit upfront of the assembly, I would heard about Griffin’s win-at-all-costs demeanor, his steely-blue-eyed stare at those that problem him, and lack of social graces. However right here, simply down the hallway from a fridge crammed with chilly kombucha and a countertop scattered with baggage of path combine touting doubtful well being advantages, Griffin appeared relaxed together with his new environment. 

A mass migration to Florida by the finance and tech set was nicely underway earlier than Griffin made the transfer. The enterprise capitalist Keith Rabois moved from California’s Bay Space; and the distinguished hedge-fund managers Paul Singer and Steve Cohen opened places of work for executives fleeing New York. But Griffin is the most important whale to wager on the area’s rise. 

In 2020, Griffin purchased no less than three properties on the ultraexclusive Star Island, and lately unloaded one of many heaps to the previous Yankee Alex Rodriguez. A brand new house is listed on the Nationwide Register of Historic Locations. Griffin is planning a brand new $1 billion workplace tower for a web site close to Miami’s waterfront to accommodate his Citadel empire, one of many winningest hedge funds of all time, now managing greater than $50 billion, and a buying and selling agency that handles one out of each 4 US shares referred to as Citadel Securities. 

 In aligning with DeSantis, whom Griffin has backed since his 2018 run for governor, he is setting a collision course with President Trump, who has mentioned he is working for president once more. DeSantis has declined to say whether or not he is working or not and has largely ignored Trump, however that hasn’t stopped Griffin from taking his swings. In November, Griffin referred to as Trump a “three-time loser.” Griffin has mentioned he would again DeSantis if the governor runs, telling Politico that the nation can be “well-served.” 

Lower than two weeks earlier than we met, Griffin gave $5 million to the DeSantis-controlled Florida Republican Occasion, in keeping with OpenSecrets.org. 

 Rich donors just like the hedge-fund titans Robert Mercer and George Soros and the late on line casino magnate Sheldon Adelson have helped elect presidents prior to now, and political insiders are abuzz over how far Griffin is prepared to take his $32 billion fortune.

 Jeff Hauser, a lawyer who works to uncover political corruption because the founding father of the Revolving Door Venture, mentioned Griffin could develop into much more highly effective to Republican’s monetary fortunes than different donors, together with Peter Thiel. Thiel gave greater than $32 million to Republicans within the 2022 election cycle, in keeping with OpenSecrets.org. 

 “He’s positively some of the influential funders,” Hauser mentioned of Griffin, “and he has the likelihood to do extra, particularly if and when DeSantis runs for president.” 

Griffin’s latest transfer to the Sunshine State dates again to the early days of the pandemic. In March 2020,  his analysis recommended that the area’s scorching, humid local weather would efficiently struggle the unfold of the coronavirus. He rented out the whole 4 Seasons in Palm Seashore, establishing a brief buying and selling ground for 50 folks within the empty lodge. As Florida rolled again pandemic restrictions extra shortly than Chicago, much more Citadel staff migrated south. 

When the worst days of the pandemic have been over and plenty of went again to Chicago, they realized that they have been fed up with a Chicago crime wave that led Griffin, in 2021, to declare that town was like “Afghanistan on a great day.” In 2022, there have been 39% extra murders than there have been throughout the identical interval in 2019, the Chicago Police Division reported. 

 “The variety of my colleagues who confronted private moments of violent crime — whether or not they’d been stabbed, mugged at gunpoint, or had a bullet go via their automobile— made it untenable,” Griffin mentioned. 

Even potential recruits wished to keep away from Chicago, however Griffin, who believes firms perform higher when individuals are within the workplace, wasn’t prepared to tolerate a extra distant workforce. So Citadel’s high brass thought-about shifting to Boston, with its world-class universities and the Route 128 expertise hall, or Austin, Texas, earlier than touchdown on Miami. Griffin nonetheless sees potential to develop in Boston.

Pritzker, talking in a latest interview from Davos, Switzerland, acknowledged that he was “sorry” that Griffin had left Illinois.

Griffin has deep roots in Florida. He was born in Daytona Seashore and went to highschool in Boca Raton. His mom lives in Palm Seashore, the place he has been amassing a sprawling real-estate empire via a collection of LLCs during the last a number of years. His ex-wife’s mother and father additionally stay within the state. 

For a lot of his profession, Griffin targeted on philanthropic causes. He purchased fashionable artwork and lent it out, gave $16.5 million to deliver the biggest dinosaur ever found to Chicago’s Discipline Museum, and, as a critical conservationist, endowed an exhibit for the endangered Komodo dragon on the San Diego Zoo. Griffin’s philanthropic items have now surpassed $1.5 billion, a spokesman mentioned. 

Griffin grew bored with seeing his philanthropic efforts diminished by what he considers dangerous coverage selections. And in recent times, he found what many billionaires have found earlier than him: There are few locations with higher potential for affect in America than politics. Within the 2008 election cycle, Griffin gave $189,000 to federal campaigns, directing a bit greater than half to Republican or conservative causes, in keeping with OpenSecrets.org. Since then, he has ramped up his giving, rising the quantity by magnitudes, but in addition, over the previous 4 cycles, directing it completely to Republican or conservatives. In the course of the 2022 election cycle, Griffin donated greater than $71 million to outdoors political teams, with each cent of it going to conservatives. 

With cash comes affect, and Griffin has already demonstrated that he enjoys the joys of directing coverage. He informed me that he and his colleagues got here up with the concepts that laid the muse for Operation Warp Pace, the Trump administration’s profitable plan to hurry a COVID-19 vaccine to market. 

 “I am happy with my function in encouraging the administration to spend a number of billion {dollars} to purchase an choice that saved, on the finish of the day, a number of hundred thousand American lives,” Griffin mentioned.

One other time, Griffin received a name from a former worker who informed him Trump’s Meals and Drug Administration was blocking a trial for the antiviral drug remdesivir. So the hedge-fund supervisor “reached out to the White Home, to Senate management, and to the Home, and mainly lit everybody on hearth that the FDA has to get off their you-know-what, and take some considerate dangers right here,” Griffin mentioned. The remdesivir trial began a number of days later. 

Griffin as soon as had that type of affect on the state and metropolis stage. Griffin performed good with average Democrats just like the Chicago mayors Rahm Emanuel and Richard Daley. He spent $54 million to defeat Pritzker’s 2020 state tax proposal that may have raised Griffin’s taxes however lowered them for almost all of Illinois residents. (ProPublica later calculated that Griffin in all probability saved $51 million or extra in annual taxes by serving to to defeat the measure. A Citadel spokesperson informed the information outlet that Griffin has paid extra taxes in recent times than virtually any American.) 

However as a extra progressive pressure of Democratic politics took maintain in Chicago with Mayor Lori Lightfoot, and in Illinois with Pritzker, Griffin’s energy started to erode. He showered $50 million on Richard Irvin, the mayor of Aurora, in his run for Illinois governor final 12 months, solely to see Irvin defeated within the Republican main. 

In Florida, Griffin will be part of forces with an already formidable base of Republican donors. Finance heavyweights like Thomas Peterffy, the Fanjul sugar barons, and The Villages retirement group, residence to an unlimited community of predominantly Republican donors, already wield quite a lot of affect in conservative races, mentioned Sarah Bryner, the analysis director for OpenSecrets.

 “Florida is and can proceed to be a significant supply of donors for conservatives,” Bryner mentioned. “Placing himself within the heart of that can improve his political energy.”

 Whereas Griffin admits that there are folks within the Republican Occasion who want to see him get deeper into political giving — a welcome second act for a lot of billionaires — he is not prepared to surrender his first act simply but. In any case, Citadel is what has supplied him with such a formidable political warfare chest. Forbes calculates his wealth at $32 billion, up from $12 billion in 2020. 

It is like, did I simply peak? Ken Griffin, referring to his 2020 efficiency. (He crushed 2021 and 2022 as nicely.)

And Griffin is on a roll, notching a string of hedge-fund returns beginning in 2020 which have develop into the envy of the trade. Griffin now worries about changing into complacent.   

“It is like, did I simply peak?” Griffin mentioned, referring to his 2020 efficiency. “That is 30 years of my life. We simply had the perfect 12 months we have ever had. Is that this that second? After which in 2021, we crushed 2020. So is that this the height? Is that this the apex of 31-and-change years of my profession?” 

“Proper now,” he continued, “we’re on a price to crush final 12 months.” 

Griffin did actually crush 2022. The hedge fund made $28 billion in income on the again of a 38.1% price of return for its flagship fund, Wellington. Citadel Securities put up $7.5 billion in income. 

In Citadel’s early days, Griffin did a bit little bit of all the pieces, together with writing code for the backend accounting system. He traveled to colleges just like the College of Pennsylvania’s Wharton Faculty, the place he would interview college students just some years youthful than him. 

Griffin positioned his agency on the forefront of studying learn how to mannequin the monetary markets in an trade that was nonetheless coming to phrases with the ability of computer systems and predictive analytics. 

 “The strategy to investing we have been taking was a decade forward of its time,” mentioned James Yeh, one among Griffin’s earliest hires and a good friend. “We have been inventing issues.” And Griffin beloved the problem. “He was sharp,” mentioned Yeh. “He was bold.”

Griffin devoured administration books, employed consultants like Boston Consulting Group to compile intel on rivals, and introduced in ex-CIA brokers to coach staff on interrogating company CEOs. Griffin labored over making profitable trades repeatable. “All the things there has a course of,” David Bunning, one among Griffin’s first hires, mentioned. “We have been attempting to be the perfect at what we have been doing.”

When rivals stumbled or failed, Griffin moved shortly to determine what they did incorrect and construct these classes into his enterprise. In 1994, Federal Reserve interest-rate will increase caught Wall Avenue merchants off stability and led buyers to drag a 3rd of the fund’s cash. Griffin rewrote his investor contracts in order that he may maintain investor cash for longer. 4 years later, the hedge fund Lengthy-Time period Capital Administration collapsed, however survived for longer than anticipated. Griffin interviewed LTCM staff and discovered that the fund had prolonged its life by locking up long-term financing. He developed an inside operation that lessened his reliance on Wall Avenue loans. 

“His capability to study is difficult to overstate,” Bunning mentioned.

Citadel virtually collapsed ​​within the monetary disaster of 2008, shedding 55% of its worth, with most of these losses concentrated over 16 weeks. Griffin kicked in $500 million of his personal cash to pay efficiency bonuses and fought over the subsequent 1,112 days to get again above the fund’s high-water mark. 

What Ken enjoys greater than something is a debate, relatively than, let’s name it a dialog. Tom Miglis, a longtime colleague who now not works at Citadel.

Griffin strove to construct one thing that may have affect lengthy after him. When Pablo Salame, a senior Goldman Sachs dealer, met Griffin someday within the mid-2000s and informed him he was pondering of beginning a hedge fund together with his title on it, Griffin suggested towards it. “He mentioned, ‘You do not need to dangle your shingle together with your title on it,'” Salame recalled. “You need to construct one thing that lasts. You need to have the ability to create an establishment that survives your departure.'” (Salame is now the co-chief funding officer at Citadel.)

Griffin anticipated colleagues to work as exhausting as he did. Peng Zhao, the CEO of Citadel Securities, first met Griffin as a second-year quantitative researcher in 2007, when Griffin referred to as him on the weekend to assist mannequin mortgage markets. “I used to be a second-year QR, having a possibility to work with one of many superstars in finance,” Zhao mentioned. “How exhausting do you assume I labored? However Ken was proper there with me. That at all times left an impression on me, the drive and the desire to know, to succeed.”

Griffin’s character may make Citadel a troublesome place to work, in keeping with greater than a dozen present and former staff. One one who labored there greater than a decade in the past mentioned it felt to him as if the Citadel tradition prized money-making above all else, even when it meant fostering a chilly, cutthroat, aggressive tradition. 

“Some folks misunderstand Ken’s depth and keenness as being overly demanding,” defined Tom Miglis, a longtime colleague who now not works at Citadel. 

Present and former staff mentioned Griffin inspired them to strip human emotion out of the investment- and company-building course of. However Griffin’s very human depth would typically boil over. Generally he shamed colleagues, referred to as them names, or shouted at them throughout conferences, mentioned a number of former colleagues. Throughout one assembly someday after the monetary disaster, in keeping with a second ex-employee, Griffin informed somebody their concept was “silly,” after which mentioned, “Cease being a fucking fool.” The goal of his vitriol stood up and left the room.

 A Citadel spokesman declined to remark, however helped arrange an interview with Scott Rafferty, who spent 18 years at Citadel because the agency’s head of investor relations. “Not as soon as did I ever hear Ken name anybody a reputation, I did not hear him disgrace anybody or deal with them in an inappropriate method,” Rafferty mentioned. He added that Griffin would increase his voice in conferences, however in a method that he interpreted as encouragement relatively than criticism.

Griffin questioned executives in what a number of ex-employees described as core sampling, selecting one subject and probing with rising depth till he reached the restrict of their data. Typically, Griffin would prepare his icy blue eyes on them, unblinking, for 30 seconds or extra as Griffin thought-about what to say.

“What Ken enjoys greater than something is a debate, relatively than, let’s name it a dialog,” mentioned Miglis, who added that Griffin generates concepts shortly and expects his executives to reply in form. “He thinks of each enterprise dialog as the next, and it is a quote from Ken: ‘It is a instructing expertise. It is a studying expertise. Or it is each.'”

Executives discovered to spend hours getting ready for conferences with him. A couple of credit their preparation for making them a greater government. 

“Ken goes down, down, down till he will get to the actually core, most essential components,” mentioned Salame, including that some Goldman colleagues thought he was too detail-oriented, but it surely wasn’t sufficient for Griffin. “Now, as a matter in fact, once I’m one thing, I am going to cease and assume, ‘OK. What questions have not I requested myself?’ The second I began doing that, it made my interactions with Ken simpler.” 

Matt Andresen, an electronic-trading pioneer who helped Griffin construct a enterprise dealing with retail-investor orders that grew to become a part of Citadel Securities, remembered bursting into Griffin’s workplace at some point to inform him that one among his enterprise strains had simply taken the No. 1 spot. Griffin congratulated him. A day or two later, Griffin wished to know why Andresen wasn’t working to obliterate the subsequent closest competitor. 

“Some folks aren’t used to being pushed like that,” Andresen mentioned. “I appreciated being pushed.”

Griffin makes staff signal strict employment agreements, together with among the lengthiest noncompetes within the trade, and zealously enforces them. A couple of individual contacted by Insider declined to remark due to nondisclosure agreements that stay in power for years, and in a single case greater than a decade, after leaving Citadel.

At instances, particularly within the early days, Griffin had a status for churning via staff. In response, a Citadel spokesman famous that when the hedge fund was unproven and little identified,  “Ken had a small staff and needed to take bets on candidates who have been on the very begin of their careers.”

Griffin and his longtime lieutenants, Gerald Beeson, Citadel’s chief working officer, and Zhao, acknowledged that the companies they handle may be intense locations the place feelings sometimes run scorching. 

Griffin mentioned he has “excessive requirements.” “And I am not shy to inform you if you’re exceeding them, crushing them, or falling quick.”

Griffin discovered his drive at an early age. His father, Donald, was one among seven youngsters, and the primary to go to school. Donald received a job with Basic Electrical, finally rising to a place modeling the success price for the Apollo 11 moon mission.

Ken, the older sibling to a different brother and a sister, was born in Daytona Seashore and frolicked in Midland, Texas. By the point he was in highschool, Griffin’s household had settled within the Boca Raton gated group of Boca Tub and Tennis. As a child, Griffin wrote in regards to the inventory market, collected cash, and skim the encyclopedia for enjoyable.

Griffin began a small educational-software firm as a youngster and employed friends to stuff envelopes and put together mailings.

When Griffin’s mother and father gave Ken a selection of attending personal highschool or going to the native public faculty and getting a pc, he took the pc. He labored for IBM through the summer time, and have become president of the high-school math membership. One 12 months, in a pc competitors, Griffin’s staff completed third within the state finals. Even then, Griffin was aggressive. “Ken to today will swear they need to have received the championship,” mentioned Ernie McMullen, a childhood good friend.  

He additionally confirmed a enjoyable aspect. He would provoke the Boca Tub and Tennis safety guards, tossing smoke bombs and working away when the guards chased him, in keeping with a former classmate. He additionally threw legendary events, although mates knew to not step on the household’s fancy gold-colored carpet. Throughout senior 12 months, Griffin’s classmates gave him a selection of accepting the Most Prone to Succeed title or Occasion Reptile. Griffin, who completed among the many top-five college students in his class, selected the latter. 

He enrolled at Harvard School in 1986, finding out economics and authorities whereas he ran a small funding fund seeded with capital from a grandmother who had efficiently constructed an Illinois fuel-oil-distribution enterprise together with her husband and continued working it when he died. Griffin persuaded officers on the faculty to let him set up a satellite tv for pc dish on the roof of his dorm so he may get safety costs extra shortly. Griffin was betting towards the inventory market when it crashed on Black Monday in 1987. He made cash whereas many on Wall Avenue misplaced gobs of it. 

Griffin wrote his thesis on capital markets and graduated from Harvard with honors, in keeping with a spokesman. 

He quickly moved to Chicago, the place he spent a 12 months buying and selling for the hedge-fund pioneer Frank Meyer earlier than elevating funds for a small hedge fund of his personal. Wellington Monetary Group, the fund’s unique title, discovered early success and launched Griffin on his method. 

In 2007, Griffin spun out the market-making enterprise that Andresen had helped construct into what grew to become often called Citadel Securities. Its very creation was no small matter — none aside from Jeff Bezos had tried and did not construct a enterprise that dealt with retail-order circulate when he labored for hedge fund D.E. Shaw. When Sequoia Capital took the primary outdoors stake within the enterprise in early 2022, it was valued at $22 billion. 

Citadel Securities’ success has additionally sometimes attracted undesirable consideration. Some, together with Gary Gensler, the chairman of the Securities and Change Fee, are involved that the monetary markets are so reliant on a single agency for a lot each day buying and selling quantity. Others fear that it provides Griffin’s hedge fund an unfair benefit. 

 “It’s a must to get deep into the weeds to point out they’re co-beneficiaries of Ken and his imaginative and prescient and one another,” mentioned Paul Rowady, a longtime analyst of market construction and the director of analysis at Alphacution, a analysis conservancy specializing in expertise and the markets. “The thesis is {that a} father or mother has two youngsters, son A and son B, and the father or mother is claiming that these two youngsters don’t have any relationship to one another. That is bullshit.”

Issues got here to a head in 2021, when the retail brokerage Robinhood halted buyer orders in GameStop, the video-game retailer whose inventory had surged after particular person buyers banded collectively on Web boards like Reddit. Citadel Securities buys buyer orders from Robinhood, and conspiracy theorists instantly suspected Griffin’s affect. Web sites like www.kengriffinlies.com sprung up.

Redditors, thanks a lot for serving to create the perfect pipeline we have ever had. Ken Griffin, on how the GameStop frenzy helped increase Citadel’s profile with potential hires.

The SEC later discovered no reality to the conspiracy theories. But the GameStop affair, in an odd twist, really helped enhance Citadel’s clout with potential recruits, Griffin mentioned. 

 “For lots of people this was a wake-up name that this agency Citadel is definitely some of the essential gamers on the planet’s monetary markets,” he informed me. “Redditors, thanks a lot for serving to create the perfect pipeline we have ever had.”

Success hasn’t harm both. LCH Investments, a fund of hedge funds group, mentioned Citadel made $50 billion over its lifetime for buyers via 2021, second solely to the $52.2 billion made by the hedge fund Bridgewater, which began 15 years earlier. When LCH updates its rankings for 2022, it’s extensively anticipated to point out Citadel in first place. 

A few of Citadel’s latest success is owed to the agency’s commodities staff. Amid supply-chain constraints and a warfare in Ukraine which have made commodities markets risky — and worthwhile for the appropriate merchants — greater than 60% of Citadel’s funding positive factors within the second quarter of 2022 got here from commodities. 

That is helped Citadel outpace different hedge funds that pursue comparable methods. The flagship methods for Citadel rivals D.E. Shaw, Millennium, Point72, and Balyasny gained 24.7%, 12.4%, 10.3%, and 9.7% final 12 months, respectively, in need of the 38.1% put up by Citadel.

“Should you can show to him that you’ve got an incredible enterprise, distinctive insights, and a aggressive benefit,” mentioned Mark Stainton, a earlier head of the commodities enterprise who has since left Citadel on good phrases, Griffin “is prepared to present you a major quantity of capital.” 

Commodities is one space the place Griffin’s rising function as a coverage advisor has overlapped together with his enterprise pursuits. Citadel has been energetic in natural-gas markets, and in February 2022, Griffin and Niall Ferguson cowrote an op-ed in The Wall Avenue Journal calling for Europe to cut back its reliance on Russian pure fuel and for the US to extend its manufacturing. 

Regardless of his success, Griffin mentioned his wealth is simply an outward signal of American exceptionalism — the experiment of presidency and self-determination which have outlined this nation for the previous 245 years. Obsessed with schooling, crime and monetary self-discipline, Griffin worries now that one thing about what has made the nation so nice has been misplaced. 

 “We have overlooked the alternatives folks can take pleasure in in America in recent times,” Griffin mentioned. To assist counteract that, Griffin mentioned he plans to present away the overwhelming majority of his fortune throughout his lifetime. 

 “I’ll give my cash away in a method that I believe has an actual influence for our nation,” he mentioned. “I hope that the items I make will have an effect on America and the world for a few years to come back.”

In November 2021, in an try to attach with the nation’s glorified previous, Griffin purchased one of many 13 unique copies of the US Structure. He informed me that he first noticed the doc months earlier than it was auctioned by Sotheby’s and knew he needed to have it — a logo of the second in time when among the most interesting minds in America got here collectively to create a dwelling structure. 

Griffin finally paid $43 million for it, outbidding not solely the few folks on the planet with extra wealth than him, like Bezos or Elon Musk, however a set of cryptocurrency fans who had pooled their cash. 

Final December, Griffin threw a celebration for Citadel and Citadel Securities staff and their households on the Disney World resort in Orlando to rejoice their mixed success. Coldplay carried out. Roughly 10,000 folks, together with 2,500 youngsters, attended the three-day occasion in South Florida. Griffin footed the whole invoice. 

Add all of it up, and Griffin’s life within the Magic Metropolis appears to agree with him. He spent the night time earlier than our interview consuming Mexican meals and taking part in card video games together with his youngsters, an expertise that he wished me to imagine wasn’t all that totally different from that of different American households. I did get him to acknowledge one small distinction. 

“The home has an incredible view,” Griffin mentioned. “I am not going to be shy about that.” 

Bradley Saacks and Alex Morrell contributed reporting to this text.