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켄 그리핀과 시타델(헤지펀드·시타델 증권)의 성장사를 소개하는 영상. 차익거래 기반 초기 성공, 2008년 위기 대응, 시타델 증권의 시장조성 사업 확장(미국 주식거래의 약 1/4 처리), 2025년 기준 헤지펀드 운용자산 720억달러·누적 순이익 900억달러 이상 등을 다룬다. 게임스톱 숏스퀴즈 관련 음모론은 근거가 없다고 평가한다. 개인 투자 권유나 가격 예측은 없음.
다듬은 글
Morning folks and welcome to today's episode called Ken Griffin, Wall Street's ultimate competitor. And forgive me if I sound a bit blocked up. I've had a cold all week. Now Griffin has been on my list from day one. I mean, he's the 32nd richest person in the world with a net worth of 60 billion. But I wasn't in any real rush to cover him until about two weeks ago when I finally got round to watching Dumb Money, the movie about the GameStop short squeeze.
And it's a pretty good movie and it's pretty accurate. I mean, it's still Hollywood and all that, but well worth watching. But anyway, in the movie, the two or three times when Griffin's name is mentioned, it's followed by the word prick. So that kind of got me interested like is he really that bad or is it simply jealousy as a result of his success?
Because even compared to the other masters of the universe on Wall Street, Griffin is seriously successful. His hedge fund is the most successful hedge fund ever in history. But even more than that, he has this second separate business, a securities business, and it trades more than $170 trillion worth of securities a year, making it one of the biggest trading businesses in the world.
How did he get to where he is? This is a fascinating story. Enjoy. Ken Griffin was born in Daytona Beach, Florida, 1968. His father worked at General Electric. His mother was a housewife. And by the time Griffin is a teenager, he's big into computers, taking them apart. He learns how to program. After finishing high school, goes to Harvard to study economics and government.
And he said that it was around this time that his main ambition was to get into private equity. And I'm guessing he was heavily influenced by probably my favorite book ever, Barbarians at the Gaze, because that was released around this time. because Griffin said that his hero back then was Henry Kravis of KKR and he's one of the central characters in the book.
Now, myself and Keith, we did an episode on barbarians at the Gates about two years ago, so that's well worth a listen. Anyway, while he's at Harvard, Griffin starts trading and spends a huge amount of time learning how markets work. And he comes across something called convertible arbitrage. Uh and the basic idea is that a company might issue a bond that can eventually be converted into shares.
And because of that option, the price of the bond and the price of the stock are tied together. But back then, markets weren't as fast. And sometimes the bond price, it lagged behind the stock price. So if the stock price jumped, the bond was supposed to go up too, but sometimes it was a bit slow to catch up.
So Griffin would buy the underpriced bond and simultaneously bet against or short the stock. So shortened the stock protected him if the market crashed, making the trade virtually risk-free. And as soon as the bond price caught up to where it was supposed to be, he closed the trade and pocketed the difference.
And so now he writes a computer program to find these opportunities and to calculate how to hedge and manage the trades. So all he needs now, of course, is money. So, he visits a broker friend working in a bank and he starts explaining his model. And by pure chance, a [snorts] wealthy retired Wall Street investor overheard Griffin's pitch and said he'd invest $50,000.
Then on the back of this, and obviously feeling pretty confident, Griffin goes to his family and other contacts and raises $265,000. And to ensure that he can get live market prices quickly, Griffin persuades Harvard to let him keep this satellite dish that he put up on the roof of his dorm. By the time he graduated from Harvard in 1989, he's managing more than a million dollars.
Now, he closed that fund because straight out of college, he got a job at Glenwood Capital. That's a hedge fund in Chicago. And in his first year, he produced a return of 70%. Frank Mayer, he was one of the founders of Glenwood Capital. and he said the following of Griffin. Ken is the most focused human being I've ever met.
He calculates probability distributions while other people are clearing their throats. And Mayor is so impressed with Griffin that just after a year of Griffin having joined Lynwood. He leaves and Mayor helps him raise $4.6 million to start his own hedge fund. Now, initially it wasn't called Citadel.
That happened a few years later, but I'm going to stick with Citadel. It just makes it easier for all of us. Mayor also gave Griffin one really important piece of advice. Instead of charging investors the usual fixed management fee of 1 or 2%, he tells Griffin to charge them the actual cost of running the fund.
So as a result, the management fee that uh Citizel charges its investors can fluctuate and sometimes it can be as high as 6%. As a result, Citizel can spend much more heavily on things like computers, programmers, data, faster systems because those costs are passed on to the investors. And as we'll see, that continued high investment in technology is crucial to Citadel's success.
Now, as you'd expect for someone as intensely focused as Griffin, he pretty much lives and breathes the business, arriving before 6 every morning, working 18our days, generating 40% returns in his first few years. So, money starts flooding in. By 1994, the hedge fund is managing $200 million with over 60 employees.
And Griffin is also very involved in every part of the business, including the hiring process. Over the years, Griffin estimates that he's interviewed 10,000 people. And this is because he's very particular about the type of people he wants. And in those early years, he favors young, hungry, raw talent.
And he he's not just looking for traders. He's looking for problem solvers, theoretical physicists, mathematicians, programmers, engineers. as he said, people who can look at markets as a problem to be solved rather than just something to have an opinion on. Because you see, this is the thing about Griffin.
He's not an innovator. He's a problem solver and an unbelievably focused replicator. As is highlight in this excellent profile piece from the New Yorker magazine where they wrote the following. Citadel takes ideas that are just beginning to circulate and improves them with math or technology or data that others haven't thought to use.
As Griffin once acknowledged, if there are a thousand things that make Citadel special, there will be very few that are actually truly unique and bespoke to Citadel. So, if any of his competitors are doing something new or different that's making money, Griffin wants to understand it, build the systems around it, and then do it better.
And Griffin himself, as I said, he immerses himself in the entire process. He's all over the technology that they use. He understands it inside out. And this is a quote from him. I am willing to get my hands dirty with all kinds of details that in some sense would often be viewed as not belonging on the radar of a CEO.
By 1998, Citadel was managing about a billion dollars. And earlier that year, Griffin, he tightened Citadel's rules around withdrawals. So his investors couldn't suddenly demand all their money back. And this turned out to be very precient because later that year, LTCM, it blows up. So LTCM was one of the biggest hedge funds in the world back then.
Like it had two founders who were Nobel Prizewinning economists. But the hedge fund had borrowed too much money. So when Russia defaulted on its debt, LTCM collapsed and this had a huge knock-on impact. other hedge funds and banks on Wall Street started dumping things like corporate bonds, convertible bonds, other credit investments because lenders are demanding more cash from them and investors are trying to get their money out.
And because everybody is selling at the same time, some of these assets are suddenly available at knockdown prices. And because Griffin had tightened Citadel's rules around withdrawals earlier that year, he's not under pressure. He can buy. And that's exactly what he does. He starts buying these distressed bonds and other credit investments and then waits for the panic to pass and the prices to recover.
And this becomes a bit of a Griffin playbook. He is the ultimate vulture in many ways. Wait for somebody else to get into serious trouble, then step in as the buyer of last resort and pick up valuable assets for a fraction of what they were worth before the panic. We'll see in the GameStop short squeeze, which we'll get on to later.
Now up until now, Sisil is your basic, albeit, you know, very high-erforming and opportunistic hedge fund. But Griffin decides he wants to get much closer to the actual buying and selling of shares. And so in 2002, he launches Citadel Securities. It's what's called a market maker. And in very simple terms, a market maker, it buys from people who wants to sell and sells to people who want to buy.
So, it might offer to buy a share for $10 and sell it for $101 or $105. And those tiny differences between the $10 and the $101 or 5centent, that's its profit. And if you're doing that millions of times a day, it becomes obviously a very, very big business. And Griffin spends tens of millions on servers, communication lines, trading software to build up this side of the business.
And by the end of 2004, Citadel Securities is handling roughly 12% of all US options volumes and about 3% of listed US equity trading. A and you see the reason why this business takes off so quickly and then keeps growing. It's it's all down to the way in which Griffin focuses on what's working in the marketplace, replicates it, measures it, changes it, keeps improving it until Citadel becomes the best.
As the CEO of Citadel said, we don't enter a business just to make a little money. We enter a business to be number one every single time. And and their models are obviously the best. Like one rival executive said the following. The truth is they have some of the best pricing in the business. How they do it, I don't know.
Another rival said, "We trade with them a lot and begrudgingly respects them." By 2007, between the hedge fund and Citadel Securities, everything is going really well for Griffin. But then the subprime mortgage crisis starts and Griffin initially, he basically goes back to the LTCM playbook. Other people in trouble, they need cash.
Citizel has cash. So Griffin swoops in. He buys distressed credit assets from a collapsing hedge fund at a steep discount. A few months later, Erade gets into serious trouble because of its exposure to subprime mortgages. Citadel puts in around 2.5 billion, picking up the mortgage assets for around 27 cent on the dollar.
I mean, it looked like good business. But then on September 15th, 2008, we all know, yes, Lehman Brothers collapsed. Credit markets froze. Banks start demanding more collateral. Assets that Citadel thoughts they could easily sell become almost impossible to move. And Citadel is highly leveraged, which basically means it has borrowed a lot of money to make its trades much bigger.
So while Citadel does have plenty of cash, compared with the size of those trades, you know, that pile of cash doesn't actually go very far. And because the value of those trades fall, the banks lending citadel money starts demanding more and more cash as collateral. If you need more cash, you have to start selling assets.
But Lehman has just collapsed. The financial system is in freef fall and everybody else is trying to sell as well. So Citadel is having to sell some investments at huge discounts resulting in massive losses. And Wall Street is now full of rumors that Citadel can't meet its margin calls and is about to go under.
CNBC actually parks a truck outside Citadel's Chicago headquarters waiting for the collapse. Now Griffin tries to assure investors. He tells them, "We've made it through 18 years. We'll make it through the next 6 to 8 weeks." But some investors want to withdraw money from the fund. And Griffin knows that if this happens, he'll be forced to sell even more assets at even bigger losses.
So, he activates a clause in the fund rules that allows Citadel to temporarily stop withdrawals. Investors, of course, are furious, understandably, because, you know, their money is now locked in. But this decision together with Griffin and other top Citadel executives putting in 500 million of their own money, it buys them some time.
And ultimately it helps to keep the fund alive although around $8 billion dollar of value is wiped out of its main funds. But that's the hedge fund side of the business. Citadel Securities the market making business actually had its best year up to that point making more than $1 billion in 2008. And the reason is pretty simple.
markets were going crazy and because of all the uncertainty, the gap between the buying price and the selling price of shares got wider. So, Citadel Securities was making more on each trade. And that's a really interesting thing about that business that he has. Like when markets are calm, it makes tiny amounts on huge number of trades.
But when markets become really volatile, volumes are still high and the gaps between the buy price and the sell price can get wider. I mean, that is such a good business to be in. Now, it took until 2012 for Citadel's hedge fund business to fully recover. Given Griffin's own workaholic nature, you know, combined with his intense focus on ensuring the Citadel stays on top of everything, the data, the trends, the models, the technology.
It comes as no surprise really to hear that Citadel has developed a reputation as one of the toughest places on Wall Street to work with a huge turnover of staff. Here's a quote from one former employee. It's a real sweat shop. You have to be willing to give your life up to work there. And in short, if you're not performing, there isn't a huge amount of patience.
You know, you're gone. But that I mean, that shouldn't come as any surprise. Wall Street is massively competitive and Citadel is in the Premier League as such. I mean, we saw the exact same thing when I did the episode on Steve Con's hedge fund. Only the best employees are kept. And look, it's undoubtedly a real pressure cooker of an environment to work in.
But it's also, I would guess, one hell of a learning curve. And I love this line for one former employee. It was a gift to be there and a gift to leave. Now, Griffin does go to extremes when it comes to employee NDAs and non-compete agreements. For example, he's lobbied for laws that allow companies to enforce non-competes lasting up to four years.
That's a bit extreme. And there is a bit of irony in this because while Griffin does everything he can to stop his own people leaving for competitors, he's also built a reputation for poaching the best people from his competitors and it drives them nuts. You got a great example of this in 2005 because Citadel poster trader from Greenlight Capsule.
That's the hedge fund run by David Einhorn and Dan Loe who runs Third Point, another hedge fund and is a friend of Einhorns. He sends Griffin an email that includes the following. This is Grace. I find the disconnect between your self-proclaimed good to grace Jim Collinsesque organization and the reality of the ghoul hag you created quite laughable.
You are surrounded by sickopants, but even you must know that the people who work for you despise and resent you. Now, Griffin didn't respond to this email. And you got to look at the context of this. These emails were very much Loe's thing back in the 2000s. He was well known on Wall Street for sending very aggressive emails.
And then, and this is the part that I don't like, copying Wall Street heavyweights and financial journalists on the email like that just seems so performative. You know, Lobe is trying to show everyone that he's the alpha. But of course, by doing it, it only makes him look petty and insecure. Anyway, if you do manage to stay working with Citadel, if you perform, the money is very, very good.
A junior employee in their first year can earn anything from $300,000 up to $600,000. While top performing portfolio managers in a really good year have earned bonuses of $50 to $100 million. And Griffin also spends huge amounts on staff events. Probably the best example was in 2022 when Citadel celebrated its 30th anniversary.
Griffin flew 4,000 employees and their families, bringing the total to 10,000 people to Orlando, paid for flights, hotels, the food, the tickets, and basically took over parts of Disney World and Universal Studios. But getting back to where we left off, it was 2012. The hedge fund had rebounded after the financial crisis.
Citadel Securities was thriving. And throughout the 2010s, both businesses continued to grow. And probably the biggest distraction for Griffin personally was his very public divorce from his second wife and Daser Das. She's the mother of his three children. So it became one of the most highprofile and and sensationalized legal battles in 2014 2015.
The couple had signed a prenup when they married in 2003. But Das argued that she had been pressured into signing it on the night before their wedding and hadn't been given enough time to consider it properly. Griffin lawyers though disputed that and they produced evidence showing that the prenup wasn't sprung on his wife the night before the wedding, but that in fact it had been actively negotiated for weeks before the wedding with multiple drafts exchanged and reviewed by his wife's lawyers.
I mean, Jesus, how romantic. Anyway, it became a very public and pretty messy dispute before Griffin and Das eventually settled in 2015 just as the case was about to go to trial. So, we jump forward a few years to 2020. COVID hits, everyone is stuck at home with nothing to do. So, retail trading or trading by ordinary people goes crazy and Citadel Securities has its biggest year ever, almost doubling revenues to $6.7 billion.
And Griffin is determined to keep the operation running. So, as soon as the lockdowns begin, he leases the entire Four Seasons Hotel in Palm Beach, Florida. Over five days, technicians dig fiber optic lines through the sand and turn the hotel's conference rooms into proper trading floors. Around 50 of Citadel's top traders and engineers and their families move into the hotel and once they're in, the place is effectively sealed.
Now, because trading goes through the roof during co, we see the emerging popularity of apps like Robin Hood. And this brings us to the story that puts Griffin in the crosshairs of a lot of Robin Hood users. I am of course talking about the GameStop short squeeze. I'm not going to get into the whole story behind it, but for a bit of context, in January 2021, thousands of ordinary investors piled into GameStop, the video game retailer that a number of hedge funds have been shorting or betting against.
And one of the funds in serious trouble is Melvin Capital run by Gabe Plotkin because he shorted it big time. As we know, Griffin loves to prey on distressed funds. So Citadel agrees to invest 2 billion into Melvin. Now Citadel has done this kind of thing before. But there is one slight complication.
Griffin's other business, Citadel Securities, is also the biggest firm handling Robin Hood's customer trades. And 3 days after Griffin's $2 billion investment in Melvin, Robin Hood suddenly restricts customers from buying GameStop and several other shares. [snorts] So, people conclude that Griffin must have told Robin Hood to do it, to put in the restrictions to safeguard the $2 billion investment he made into Melvin.
Now, the problem is that neither the logic nor the evidence supports the conspiracy theory. For example, on January 27th, the day before Robin Hood's restrictions, Citadel Securities handled nearly $4.2 billion worth of GameStop trades. So, it was making enormous amounts of money from all of this trading.
So, if Citadel had pushed Robin Hood to stop the buying, it would have been deliberately damaging one of its most profitable businesses at exactly the moment when trading volumes were going through the roof. And the other important point is that Citadel, the hedge fund, it wasn't really in any danger of losing the $2 billion investment.
Melvin still had billions of dollars of other assets. And even though Melvin did ultimately collapse, Citadel got its $2 billion investment back out of Melvin in stages. And then there were the official investigations. The SEC looked into what happened. Congress subpoenaed emails and internal communications.
And investors also brought a civil case alleging that Citadel and Robin Hood had conspired to shut down the trading, but none of them found any evidence to support the conspiracy theory. The civil case was dismissed and that dismissal was upheld on appeal because there was no evidence. I mean, the truth is far more boring.
Trading in GameStop had gone crazy. And because trades still took two days to fully settle, Robin Hood had to put up cash to its clearing house to cover the risk in between. And the more frantic the trading became, the more cash Robin Hood had to put up. And by the morning of January 28th, that figure had risen to around $3 billion and Robin Hood simply didn't have it.
So it stopped customers buying some of the most heavily traded shares, which of course included GameStop. And by doing that, it reduced the amount of cash it had to put up. Anyway, the GameStop controversy, it didn't make a dent on Griffin's businesses. As of 2025, the hedge fund has $72 billion under management.
And since it was founded, it has generated more than $90 billion in net profits for investors, making it the most profitable hedge fund of all time. Citadel Securities, meanwhile, has become one of the most important trading firms in the world, trading more than $170 trillion worth of securities in 2025 alone.
And it now handles around a quarter of all share trading in the US and is the number one market maker in the country. And to put that into perspective, like Citadel Securities handles more daily stock volume than entire national exchanges, including the London Stock Exchange and the Tokyo Stock Exchange.
And that's why Griffin is now the 32nd wealthiest person in the world with a $60 billion fortune. And like nearly every hedge fund billionaire, Griffin spends his money on property and art. But even by the standards of the superw wealthy, Griffin's spending like it is eyewatering. His art collection is worth around $2 billion.
On one occasion, he spent $500 million on just two paintings. In 2019, Griffin bought a fourfloor penthouse overlooking Central Park for $238 million. At the time, the most expensive home ever sold in the US. And then over the last 10 years, he spent more than $450 million buying up neighboring oceanfront properties in Palm Beach in Florida and knocking them down, giving him around 27 acres with nearly a quarter mile of continuous oceanfront.
And on that land, he's planning to build a 50,000 square foot mansion with separate guest houses. By the time it's finished, the total cost will be around $1 billion, making it one of the most expensive private homes ever built. And look, I mean, he can do what he likes with his money. It's his money.
He's earned it. But personally, and this is just me, I find that kind of spending, that kind of opulence, I just find it a bit distasteful. Now, unlike a lot of other prominent billionaires in the US though, while Griffin is a Republican, he's not exactly a Trump fan and he's pretty vocal about it. He did vote for Trump in 2024, but he said it was not with a smile on my face.
He said that the Trump administration has done a lot that we love and a lot that we hate. He's condemned most of Trump's major economic initiatives like tariffs, meddling with the Federal Reserve. A and although Griffin does support tighter controls on immigration at the border with Mexico, he's also said the following.
Trump's willingness to attack people on the basis of where they came from or the color of their skin is completely inappropriate. And now the reason I think why Griffin has been so vocal in criticizing a lot of Trump's initiatives is that he seems to be setting out his stall to run for public office, maybe even the presidency.
And here's a quote from him. I would never say no to the possibility of being involved in our government. But I don't think 2028 is that moment in my life. But he's still only 57 years old. Come the 2032 election, he'll be 63. So, watch this space. And I'll finish up by circling back to the reason I wanted to dig into Griffin in the first place.
The perception given by some of his competitors on Wall Street that he's not a nice guy or that he's not a good guy. And having gone through the research, I was expecting to find something that would make me think, yeah, this guy is such a prick. But I didn't. I mean, yeah, he's a tough taskmaster. He's totally focused on winning, but there's no skeletons that I could find.
No stories that made me go, you know, oh, he's a nasty piece of work. Maybe I just didn't find the right stories. But I think a lot of the animosity from his competitors comes down to the fact that Griffin is just an incredibly difficult person to compete against. He doesn't play by their rules and he beats them.
You know, when another hedge fund gets into trouble, he doesn't come along offering sympathy. He buys their assets for a fraction of what they were worth. He's a total vulture. He's incredibly aggressive when it comes to poaching the best traders at rival firms while at the same time enforcing these stringent non-compete agreements to stop his own employees from going to competitors.
And because Citizel has such a high turnover of staff, there are an awful lot of former employees, you know, scattered around Wall Street who don't have good things to say about him. And then you combine all of the above with his huge success because not only has Griffin built the most profitable hedge fund in history, but on top of that, he built Citadel Securities, one of the biggest trading firms in the world.
So yeah, I think among the huge egos on Wall Street, there's a lot of jealousy and resentment towards Griffin. But whatever you think about Griffin, I think he makes for a fascinating story. and I may well be doing a second part on him. Who knows? And that brings us to listeners emails. And this one comes from Jason, who would love me to do the story of Walt Disney.
I've actually done the research for this. So, I will definitely be doing an episode on it. Thanks so much for listening, Jason, and for the suggestion. And remember, if you have any comments, any corrections, or any story you'd like me to cover, email me at [email protected]. All the best, folks.
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