* cumulative totals for multiple years
Griffin collects impressionist and postimpressionist art with the same passion he brings to running a hedge fund. He and Anne were first named to ARTnews’s (unranked) list of the world’s top 200 collectors in 2004 and have appeared every year since, including in the (also unranked) top-ten list in 2007. While the Griffins’ love for art is widely known, the art world’s secrecy keeps specific acquisitions and their prices from publication. For the most part, only auction prices appear in the public record, and big-ticket buyers often buy auction items anonymously. Here are some pieces known to be in the Griffins’ collection:
False Start (above)
Jasper Johns, 1959
Bought in 2006 for $80 million, the most expensive sale ever for a work by a living artist
Curtain, Jug, and Fruit Bowl
Paul Cézanne, 1893–94
Bought in 2004 for an undisclosed amount; the painting sold at auction in 1999 for $60.5 million
Paul Cézanne, 1895
Claude Monet, 1905
pastel, Edgar Degas, circa 1878
Little Dancer, Aged Fourteen
(right) bronze sculpture, Edgar Degas, circa 1879–81
Photography: (top) © Jasper Johns/licensed by VAGA, New York, NY; (bottom) courtesy of the Philadelphia Museum of Art (which also owns a copy of the sculpture)
Art Institute of Chicago
Museum of Contemporary Art Chicago
Chicago Public Education Fund, a charity that raises venture capital for public education programs
G100, an invitation-only organization of CEOs of “the world’s largest and most significant companies”
World Economic Forum
Committee on Capital Markets Regulation, a nonprofit research organization “dedicated to improving the regulation of U.S. capital markets”
Economic Club of Chicago
advisory board, Eurasia Group, a research and consulting firm that advises businesses and government on working in politically uncertain areas of the world
board of directors, Chicago Public Library Foundation
Chicago Symphony Orchestra
board of directors, Children’s Memorial Medical Center and Children’s Memorial Foundation; Children’s Memorial Investment Committee
Museum of Modern Art, New York
Whitney Museum of American Art, New York
advisory board, WomenOnCall.org, a network that connects women with volunteer opportunities at nonprofits
board of directors, Friends of Island Academy, an organization working to reduce recidivism among criminals released from custody in New York City
Griffin’s Chicago residences have been in buildings known for luxury. After selling his place in Lake Point Tower, he now owns the penthouse in the Park Hyatt and a condominium in the same building that houses the Four Seasons Hotel. In the past two years, he has bought four out-of-state properties: a floor of a building overlooking New York’s Central Park; a mansion in Aspen; and a vacation home—as well as a separate parcel of land—on Hawaii’s Big Island. The combined cost of these four properties is comparable to the budget of the government of the South Pacific island nation of Vanuatu.
132 East Delaware Place
The Residences at 900 (North Michigan)
Unit bought 11/16/95 for $1.015 million
Assessed value: $1.3 million
Property tax: $19,971 paid in 2010
800 North Michigan Avenue, penthouse unit
Bought 8/2/00 for $6.9 million
Assessed value: $7.3 million
Property tax: $113,833 paid in 2010
820 Fifth Avenue
New York City
Unit bought 12/16/09 for $40 million
Bought 7/8/09 for $13.25 million
Assessed value: $10.5 million
Bought 3/4/10 for $13 million
Second Hawaiian property
Bought 6/29/09 for $11.375 million: two parcels of land totaling about 4.2 acres in the same resort complex as the Waiulu Street house
Photograph: (800 North Michigan) Todd Urban; Illustration: Lorenzo Petrantoni
PERFORMANCE OF CITADEL
Kensington Global Strategies Fund is one of Citadel’s two largest funds (the other is Wellington). The following annual return numbers were generated from data collected from public sources by the investor Graham Giller and from published sources.
Griffin’s philanthropy has centered on the arts, children, and education. Some of his charitable contributions are distributed by the Citadel Group Foundation (CGF), a private foundation. Griffin serves as CGF’s president and biggest donor—in 2007, for example, he gave 98.5 percent of the funds the foundation received. He and Anne also started the Kenneth and Anne Griffin Foundation in October 2009. Here is a partial list of their contributions (because public access to charities’ tax documents lags behind their activity by more than a year, donations from the foundations in 2009 and 2010 may be missing from this list):
$19 MILLION to the Art Institute in 2006 for the Modern Wing; the main hallway and atrium off the Millennium Park entrance are now the Kenneth and Anne Griffin Court
$996,440 in total from CGF to the Chicago Symphony Orchestra (2002, 2003, 2005, 2007, 2008, 2009)
$675,000 in January 2007 to a program at the Chicago Public Education Fund designed to prepare teachers and principals for public schools
$500,000 and the loan of the Jasper Johns painting False Start to a 2007–08 Art Institute exhibit called Jasper Johns: Gray
$240,000 in total from CGF to the Latin School of Chicago (2005, 2007)
$10 MILLION from the couple’s foundation in October 2009 for the Griffin Early Childhood Center in Chicago Heights, an experimental school headed by the University of Chicago economist John List that opened in September 2010; some children attend free preschool while the parents of other students attend courses at the Parent Academy
$480,171 in total from CGF to Absolute Return for Kids, a London-based charity promoting child health, education, and protection (2002, 2004, 2005)
$675,000 in total from CGF to Paul Tudor Jones’s Robin Hood Foundation (2001, 2002, 2004, 2005, 2006)
$566,200 in total from CGF to the Chicago Public Library Foundation (1999–2010)
$16 MILLION from the couple’s foundation to Children’s Memorial Hospital in January 2010 for an emergency care center in the new building under construction in Streeterville
$2.25 MILLION in 2005 to Woodlawn Secondary School, a charter school operated by the University of Chicago
Between $500,000 and $1 MILLION to Chicago 2016, the nonprofit that ran Chicago’s bid for the 2016 Summer Olympics
$403,200 in total from CGF to the Museum of Science and Industry (2006–09)
Griffin first appeared in Forbes magazine’s list of the 400 richest Americans in 2003. He has made the list every year since.
The magazine AR analyzes the personal earnings of hedge fund heads annually. (This list first ran in the magazine Alpha, which merged with Absolute Return to become AR.) Griffin has frequently appeared near the top of the list of biggest earners—and once at the top of the list of the biggest losers, for Citadel’s disastrous 2008.
Citadel’s offices are at 131 South Dearborn Street in a 37-story building called the Citadel Center. The company employs 1,200 people, including many math and physics Ph.D.’s and several meteorologists.
Because it uses computerized trading algorithms, Citadel executes a large number of trades—approximately 8 percent of all trades on U.S. stock markets, as well as 30 percent of all U.S. trades of options, The New York Times reported in 2008. Hedge funds typically collect a flat 2 percent of what investors place with the fund and keep 20 percent of the gains. Citadel charges a higher management fee—in the past, as high as 8 percent—based on its higher operating costs.
Reports suggest that Griffin is not a natural manager. He’s known to frequently read books about management, hewing to the style of Jack Welch (the former General Electric CEO): having lunch with small groups of employees, for instance, and taking suggestions.
Photograph: Todd Urban
CITADEL EXECUTIVE TEAM
GERALD BEESON The chief operating officer, Beeson joined the firm as an accounting intern in 1993, according to a BusinessWeek online profile. The son of a Chicago cop, Beeson is a trustee at DePaul University.
ADAM COOPER The chief legal officer, Cooper sits on the boards of Northwestern University’s law school and the Children’s Memorial Foundation. He holds degrees from the University of Michigan and Northwestern Law.
ALEX LURYE Lurye heads global portfolio construction and risk, gauging the firm’s risk tolerance. He earned a bachelor’s degree from Polytechnic Institute in Brooklyn and an MBA from New York University.
JAINE MEHRING A graduate of Yale with an MBA from Cornell, Mehring runs human capital management and development. She previously worked as an analyst of food markets for Salomon Smith Barney.
TOM MIGLIS Miglis is the chief information officer. He oversees the creation of the trading technology that forms the essence of Citadel’s business. He holds a bachelor’s degree from Baruch College, a branch of the City University of New York.
Illustration: Lorenzo Petrantoni
FORMER CITADEL EMPLOYEES
Hedge funds, especially the math-focused quant funds such as Citadel, have a reputation for hiring the best and brightest. Citadel employees have frequently followed their boss’s entrepreneurial spirit and struck out on their own, founding new financial firms, including Polygon Investment Partners, Headlands Technologies, Senrigan Master Fund, RoundKeep Capital Advisors, Whiteside Energy, Steeplechase Group, and Abax Global Capital. Griffin told the Chicago Tribune in 2006, “I hope in 15 or 20 years we’ll have the same reputation that General Electric had: People have great careers at Citadel, and if they leave, they have great careers elsewhere.” Not every Citadel vet has had smooth sailing, however:
ALEC LITOWITZ An employee until 2003, Litowitz created the Evanston-based hedge fund Magnetar in 2005. The website ProPublica reported that Magnetar provided key funding for collateralized debt obligations (CDOs) backed by mortgages before the financial crisis while also betting that CDOs would fail. When mortgage-backed securities began tanking in 2007, Magnetar’s fund with the greatest exposure to CDO trades went up 76 percent, according to ProPublica. In November 2010, ProPublica reported that the Securities and Exchange Commission is investigating Magnetar’s CDO transactions.
MIKHAIL MALYSHEV Malyshev, known as Misha, left Citadel in February 2009 along with Jace Kohlmeier to form Teza Technologies. Citadel sued Malyshev and Kohlmeier in July 2009, claiming they violated their contractual noncompete clause. After discovering that Malyshev had used scrubbing software to erase files on his home computer even though he had been told not to, Judge Mary Rochford penalized him $1.1 million, payable to two Chicago charities. Rochford was unconvinced by Malyshev’s argument that he was only deleting pornography.
JULIO DePIETRO After 11 years working on convertible bonds, DePietro left Citadel in 2003 to become a filmmaker. He wrote and directed the 2009 feature The Good Guy, starring Anna Chlumsky, Alexis Bledel, and Andrew McCarthy. An excerpt from Roger Ebert’s review encapsulates the movie’s tepid reception: “Will you like ‘The Good Guy’? I think you might.”
The New York Times reported in October that Griffin was one of the attendees of a secretive conference in Aspen, Colorado, put on by Koch Industries, an energy and manufacturing company run by the libertarian billionaires Charles and David Koch. Politico says the purpose of the conference was to raise money for “the institutions that form the intellectual foundation—and, increasingly, the leading political edge—of the conservative movement.”
In November 2009, The Wall Street Journal reported that Griffin occasionally sends his driver to bring back milk shakes from LeDuc’s Frozen Custard in Wales, Wisconsin.
Portfolio reported in 2007 that during their courtship, Anne told Ken that she outgrew the impressionist movement as a teenager. Then she visited Ken’s apartment and saw his impressionist collection. The surprise became a running joke.
An article in the South Florida Sun-Sentinel in 1986 described the 17-year-old Griffin’s software distribution company, EDCOM, which sold discounted educational software to college professors. Griffin avoided revealing his age when buying and selling. “Do you think anyone would trust their product line to a 17-year-old kid?” he told the paper.
Photograph: Jim Shackton