Archive for August 9th, 2015

Kenneth Griffin And Citadel Are Back On Top08.09.15

When someone mentions a hedge fund most people know it has something to do with investing, but that’s about it. Inexperienced investors don’t realize that hedge funds are limited partnerships that use high-risk strategies liking using borrowed money to reap big returns. So Hedge funds use alternative methods of investing like using pooled funds in order to get an active returns for the partnership. Hedge funds may be aggressively managed, or they can be cautious and build capital slower than the aggressive approach. Aggressive Hedge funds usually go for high returns. A good example of using that strategy is Citadel’s Ken Griffin Leaves 2008 Tumble Far Behind.

When the financial crash hit in 2007, Griffin lost more than $8 billion because of the high-risk investments. It only took the company four years to bounce back according to an article about Griffin in the Wall Street Journal, Now, eight years later, the Citadel has assets of more than $26 billion. Things are looking so good that Griffin mentioned a public offering sometime next year. There are a lot of investors that would jump at the chance to earn the kinds of returns that Citadel and Griffin enjoy, but caution may get in their way.

So how does a hedge fund company go from zero to $26 billion in eight years? Some investors call it a bottom feeding strategy. Griffin buys assets that no one else wants. He did that in 1990 when he picked up assets from Enron Corp. and Amaranth LLC. Griffin has the ability to take the risks and reap the rewards or the failures. Fortunately, the rewards have been greater than the failures for Griffin over the last 27 years.

Griffin had investing in his blood when he was studying at Harvard. After an early graduation, he was known as a smart convertible bond trader. Then in 1990 he founded Citadel LLC, and it has been a rocky but successful ride to the top of the hedge fund market.

Griffin is so successful that Bill Clinton came to his 46th birthday party. Clinton didn’t say yes for nothing, however. It cost Citadel $250,000 for Clinton to come to the party and speak. Griffin and Clinton have a lot in common. They both like to make money.

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