Kenneth Griffin, the founder and CEO of Citadel, recently donated $150 million to the Harvard University financial aid program his Alma Mater. At that time it was the largest single donation the institution has never received. That was one of many donations Mr. Ken Griffin on turtletrader has made to various organizations totaling approximately $500 million.
Mr. Griffin was born in Daytona Beach, Florida in 1968. After high school Mr. Griffin enrolled Harvard University where he began investing during his freshman year. During his sophomore year he started his first hedge fund on citadel.com dealing with convertible bonds. Mr. Griffin capitalized this fund with money you raised from family and friends totaling more than $250,000. Mr. Griffin, seeking to attain real-time market data, installed a satellite feed to his dorm room. By the time he graduated Harvard in 1989 with a degree in economics, Mr. Griffin, having already launched a second fund was managing more than $1 million in total.
His Early Career
After his time at Harvard, Mr. Griffin first managed a $1 million investment for the founder of Glenwood Capital LLC Frank Meyer. Mr. Griffin reportedly made Mr. Meyer a 70 percent return on his investment exceeding Mr. Meyer’s expectations.
In 1990 Mr. Griffin founded what would later become Citadel with $4.6 million. Citadel grew to have $1 billion in investments and capital with more than 100 employees by 1998. Several well thought out decisions have allowed Citadel to make money when other funds were losing money or collapsing. In 1998 Citadel became a buyer of other hedge funds bond inventories as they struggled to stay solvent following the collapse of the fund Long-Term Capital Management.
2008 Financial Crisis
In 2008, during the heart of the financial crisis, the firm’s Wellington and Kingston Funds lost more than 50 percent of their value. Citadel in what Mr. Griffin described as one of the “most difficult decisions” he has made at Citadel. During that time all management expenses incurred by investors were covered by Mr. Griffin.
Citadel reported that complete recovery of both funds on January 17, 2012.
New Outlook on Risk Management
The strategy of investing used by Citadel since the financial crisis of 2008 is based around liquidity. Risk management is now one of Citadel’s top priorities and the firm focuses on three key areas: stress testing analysis, limiting exposure and maintaining liquidity.
In addition to the donation to Harvard University mentioned above Mr. Griffin is also donated to numerous causes mainly in the Chicago area. He helped fund and support Woodlawn High School, a charter school in Chicago. Mr. Griffin is also contributed to the following: Chicago Heights Early Childhood Center, Children’s Memorial Hospital and many other causes.