- Billionaire Ken Griffin is celebrating the 30-year anniversary of the launch of Citadel, which he started with two others in 1990 with $5 million in capital.
- Griffin, a 22-year-old fresh grad out of Harvard when he started the firm, told employees in a memo Monday that the firm has changed the world of finance.
- It now manages $35 billion, and Griffin has started a separate market-making business, Citadel Securities.
- The firm’s flagship fund, Wellington, which is also 30 years old this month, is up 20.1% this year through the end of October, and has averaged an annual return of 18.9% since it launched.
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Billionaire Ken Griffin describes his younger self as being “woefully short on experience and expertise” when he started Citadel 30 years ago with roughly $5 million in capital.
But with the firm hitting its three-decade anniversary — surviving several market crashes, presidential elections, and now a pandemic — Griffin told employees in a memo sent yesterday that “there was one truth I held dear” back in 1990 that helped get the firm from where it was then to the $35 billion behemoth it is today.
“I knew from the beginning it would take a team of the best and brightest — truly extraordinary colleagues with exceptional intellect, passion and creativity — to succeed,” he wrote.
“What I didn’t appreciate was the incredible power of this belief — that over the years, the collective talents and ambitions of our team would change the world of finance.”
Citadel, which was partially seeded by Griffin’s mentor Frank Meyer, the founder of Glenwood Capital Investments, has already cemented its name alongside the most successful hedge funds of all time, like Julian Robertson’s Tiger Management and George Soros’ eponymous firm. LCH Investments has put Citadel as the third-most profitable hedge fund of all time behind Soros and Ray Dalio’s Bridgewater, and found that, as of the end of last year, Citadel has returned a net of $35.6 billion to investors over its history.
Citadel Securities, the separate market-making business, is one of the top players in its space as well, and was started in 2002.
This year, despite market volatility from the ongoing pandemic and the US presidential race, the firm’s 30-year-old flagship Wellington is up 20.1% through October after gaining 1.1% last month. As previously reported, several segments of the firm had their best-ever starts to the year, including the quantitative strategies unit. On average, the fund has made 18.9% each year since inception.
The firm’s biggest stumble came in 2008, when Citadel’s funds lost roughly half of their value. Griffin told the Wall Street Journal in 2015 that it took three years and 17 days to make back the losses.
Read the full memo Griffin sent employees here:
Dear Colleagues,
Thank you for helping to make Citadel’s 30th anniversary a reality.
I founded Citadel three decades ago with a little less than $5 million in investment capital from a handful of supportive investors. A 22 year-old entrepreneur running a startup hedge fund with just two other colleagues, I was woefully short on experience and expertise. But there was one truth I held dear. I knew from the beginning it would take a team of the best and brightest – truly extraordinary colleagues with exceptional intellect, passion and creativity – to succeed. What I didn’t appreciate was the incredible power of this belief – that over the years, the collective talents and ambitions of our team would change the world of finance.
Every day, I am grateful for the privilege of working with the greatest colleagues in finance. Thank you for expanding my vision for Citadel beyond anything I could have imagined. I am so proud of what we have accomplished together.
Our 30th anniversary is a significant milestone. But, as you know, we seldom dwell in the past. While it is important to celebrate our history and all those who have helped shape our success, our sights are set firmly on our future. Whether you have been on this journey for decades or you’ve just joined us, it is the chapters we have yet to write together that are most exciting.
Here’s to what’s next.
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