Who is Ken Griffin? 5 things to know about the Citadel CEO who just made history.
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Ken Griffin is seen as one of the most successful hedge-fund managers in the United States, and he has the track record to prove it.
As Citadel’s founder and chief executive officer, Griffin, 54, has become one of the richest people in the world, with an estimated net worth of $29.4 billion, according to Bloomberg’s Billionaires Index. Here are five things to know about him:
Citadel made $16 billion last year
According to a report published on Monday by fund of funds LCH Investments, Citadel made $16 billion in profit, after fees, last year.
That would be the largest annual profit for a hedge fund in recorded history, outpacing the $15 billion profit by John Paulson’s fund in 2007, which is often labeled as “the greatest trade ever,” said Rick Sopher, chairman of LCH.
Citadel’s year is particularly impressive considering the overall drop in the market last year. Hedge-fund managers as a whole lost $208 billion in 2022, the report indicates.
Griffin is a megadonor to Florida Gov. Ron DeSantis
Griffin, who is originally from Daytona Beach, Fla., is a big fan of Florida Gov. Ron DeSantis. Griffin donated $5 million to DeSantis’s re-election campaign — which DeSantis won by a large margin — and said he would back the governor in a potential 2024 White House bid.
“I don’t know what he’s going to do. It’s a huge personal decision,” Griffin told Politico about the possibility of DeSantis running for president in 2024. “He has a tremendous record as governor of Florida, and our country would be well-served by him as president.”
Griffin has contributed to dozens of Republican candidates over the years. He donated between $250,000 and $5 million to political campaigns including Mitt Romney’s 2012 presidential campaign, Donald Trump’s and Marco Rubio’s 2016 presidential campaigns and the Senate campaigns of Maine’s Susan Collins, Alaska’s Lisa Murkowski and Missouri’s Josh Hawley, according to tracking site Open Secrets.
Griffin donated a total of $66 million to GOP candidates in the 2020 election cycle, according to Bloomberg.
Griffin also gave $1 million to the Obama Foundation in 2017, a year after Barack Obama left the White House, and $500,000 to Joe Biden’s inaugural committee, per Forbes.
Griffin spent millions trying to cut taxes on the wealthy — and won
In 2020, Griffin spent $54 million for ads and other efforts to thwart a ballot measure in Illinois that would have put him and other ultrawealthy residents of the state on the hook for more taxes. The big spend paid off: The measure failed. Its approval would have added Illinois to the list of 32 U.S. states that set a higher tax rate for the wealthy than for other citizens.
Nonprofit ProPublica used IRS data to determine if Griffin’s ballot effort was worth the $54 million he spent, at least to him. According to tax filings, Griffin’s annual income averaged $1.7 billion from 2013 to 2018 — the fourth-highest income in the country over that span. Using that average income as the marker, the proposed state tax increase, which would have raised the rate to 8% from 5% on the highest incomes, would have cost Griffin around $51 million every year in extra tax over what he currently pays, ProPublica says.
Griffin wasn’t done trying to influence Illinois politics. In 2022, he gave roughly $50 million to back a Republican candidate for Illinois governor who didn’t make it out of the primary.
Griffin vowed he was “all in” to unseat Illinois Democratic Gov. J.B. Pritzker when the hedge-fund giant placed his bet with Richard Irvin, mayor of the Chicago suburb of Aurora. State Sen. Darren Bailey, a Trump-backed candidate who beat Irvin, later lost in the general election to Pritzker.
Griffin, an avid cyclist and runner who gave $12 million to help fund a popular plan to separate Chicago’s lakefront bike and foot paths, may no longer spend much on Illinois politics. He has announced plans to move Citadel and a separate trading firm to Miami after 30 years in Chicago.
Griffin shorted the market on Black Monday as a teenager
1987’s Black Monday, a day that lives in infamy for many stock-market investors, was a big win for Griffin.
According to story from Institutional Investor, Griffin, then 19, had an investment fund worth $265,000 and had various short positions when the market crashed. Griffin’s fund also included some money from his grandmother, he said in an interview for the 2001 story.
On Oct. 19, 1987, the Dow Jones Industrial Average
DJIA,
dropped 508 points, a decline of almost 23%, while the S&P 500
SPX,
plunged more than 20%, one of the biggest selling frenzies ever for the stock market. An equivalent percentage drop at today’s levels would shave more than 7,000 points off the Dow.
Griffin did not disclose how much his fund made from short positions on Black Monday.
Citadel was involved in the 2021’s ‘meme-stock’ phenomenon
In 2021, retail traders began an unprecedented move toward stocks like GameStop Corp.
GME,
and AMC Entertainment Holdings Inc.
AMC,
in what some have called the Mother of All Short Squeezes.
Griffin announced that Citadel would invest $2 billion into the investment firm Melvin Capital, which at the time had suffered huge losses related to its short positions, including on GameStop.
Citadel made the investment in exchange for a share of Melvin Capital’s fees over the next three years, according to the Wall Street Journal. The investment enabled Melvin Capital to lower its leverage and avoid becoming a forced seller.
Despite the investment, Melvin Capital eventually announced its fund would be closing in May 2022.
An investigation by the Securities and Exchanges Commission into the GameStop controversy found no evidence of collusion between Citadel and executives at the popular trading platform Robinhood Markets Inc.
HOOD,
“The whole GameStop conspiracy theory, I mean that’s come and gone,” Griffin said at the New York Times Dealbook summit in November 2021. “It was fascinating to be in the center of that conspiracy.”
Read more about Citadel’s role in the meme-stock frenzy here.
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