Chicago hedge-fundbillionaireKen Griffin, who owns the largest piece of residential property in Palm Beach, got a big laughat a luncheonThursdaywhen asked abouthis plans forhismostly vacant ocean-to-lake estate.
“I’ma big fanof wildlife preserves,” Griffin quippedatthe eventattendedby about 200 members and guests ofthe Palm Beach Civic Associationat the Four Seasons Resort.
Griffin, who already has a vacation home ona smallportionofhis estate, said nothingmore aboutwhat he might build ontheproperty, which spansmore than25acres. He beganassembling itin late 2012and has spent at least $450 million on the land, which lies ahalf-mile south of President Donald Trump’s Mar-a-Lago Club.
Griffin—founderandCEOofthe hedge fundCitadelLLC— may not have talked much about his Palm Beach landholdings, but he did speak about a range of other topicsrelated to hisinvestments businessandthechallenges facing the United States’ workforceas it competes in aglobal economy.
UnlessmoreAmerican students areaggressivelyencouragedto pursue careers in technology and science“over the next 100 years,”he warned,theUnited Statessimplywill not beable to competewithChina and other nations.
“We have to be extraordinarily concerned about our competitors,” he said, mentioning that theannualcollege-graduation rate per-capita in Chinafarexceedsthatofthe United States.
“There is unquestionably a false sense of security in Washington,D.C.,” where, he said, officials tend to believe “we are almost predestined to be the dominantcountry in the world” interms ofeconomic power.
“And that’s just not true,” he said in an on-stage interview with Civic Association Chairman and CEO Bob Wright.
Education,he said, is the critical factor in the United States being “the world’s leader and innovator in technology, in life sciences.”
Griffin, 52,has an estimated net worth of$21 billion, according to Forbes.com.Hewas born in Florida andhas strong ties to Palm Beach County, having graduated from Boca Raton High School.“This is home to me,” he said.
Hebegan trading stocks while a student at Harvardin the late 1980s andfounded Citadel in 1990. The company todaymanages$43billionin assets, according toits website.
Griffinhad been scheduled to speak atacivic association event on March 17 last year, just six days after the World Health Organization declared COVID-19 a global pandemic.His talk was abruptly canceled.
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But on Thursday before a receptive audience, it seemedhis appearance had beenworth the wait.The location of the luncheon at the Four Seasons on South Ocean Boulevard also seemedappropriate.
During the first weeks of the coronavirus pandemic last year — as hotels across Florida temporarilyshutteredtheir doors to guests —Griffinand his teamscrambled to lease theentireFour Seasonspropertyas a site for a remote trading floor for Citadel Securities, a stock-trading companyseparate from his hedge fund. Citadel Securities, which isdescribed as a“global market maker,” trades on behalf of institutional and retail investors in more than 35 countries.
“We’re responsible for making about a fourth of America’s (stock) trades every day,” Griffin said.
Responding to the pandemic: Ken Griffin opens Palm Beach trading floor at Four Seasons
Finding a temporary location for the trading floor was influenced by twomain factors, he explained. In the early days of the pandemic,he said,“there was a theory that the virus was less transmittablein high-humidity climates.You’d be hard pressed to find a place with more humidity than in South Florida.
“And the second reason was our realization that it was unlikely that the United States was willing to take the steps required to stop this virus in its tracks.”
That meant finding a safe place to conduct business — and fast, he said. He credited a team of about 200 employees for setting up the temporary trading floor, which included the installation ofseveral thousandcomputer servers.
His employees are empowered to make decisions quickly, Griffinsaid,and“are reallyfocused on getting the job done.”
At the Four Seasons,Citadel Securities employeesand their familieswere quarantined at the resort for about a year“in this bubble,” Griffin said,as they carried out trading operations.The resort was closed to outside guests during that time.
“The Four Seasons Palm Beach became theSouth Floridastock exchange,” Griffinsaid.
'I picked a career where almost half the time I'm wrong'
Griffinoffered a variety of other insights during his conversation with Wright, which stretched nearly an hour.
Griffincredited much of his success to the explosion ofadvancement intechnology in the 1990s and early 2000sthat revolutionized “how securities were priced and traded.”
Even in his successful business, he said, “mybestfloor managers are right(only)about 50% of the time.”But the goal is always to have financial gains outweigh losses.“I picked a career wherealmosthalf the time I’m wrong,” he said. “You’d never go to a brain surgeon who got the job wrong half the time.”
Florida has an opportunity to capitalize on attractingtalentedworkersto the state from areas with public-safety issues, Griffin said.“Now, to be clear,I’drathersee Chicago’s public safetypublic safety(efforts)work andI’drather seeNew York,withtheirnew mayor,make the streets feel safe again.But right here, right now,is a chance forFloridato really reposition itself.”
Griffin mentioned his philanthropy, which ismostlyfocused on educational initiatives but also includesdonations to cultural organizations. His2018 gift of $20 millionhelpedfund the expansionof The Norton Museumof Artin West Palm Beach, where the new wing is named for him.
“I believethatour great cities are anchored by our cultural institutions,” he said. “I believe the arts enrich us all and help bring acommunitytogether.”
The economy during the pandemic has beenimpactedbya number offactors, he said, includingincreasedgovernment spendingand public debt, along with extraordinarilyhigh corporate profits “because ofenormous amounts of (consumer) consumption.”Andmanyconsumers whodidn’tspend money during thehealth crisison some items — including entertainmentand vacations—have insteadchanneledthat cash into speculative assets such as cryptocurrency and the stock market, he added.
Meanwhile,“this massive spending splurge” andpressure on the supply chain has sparked rising inflation, he said.And if inflation does not dissipate quickly, he said, the Federal Reserve Bank’smonetarypolicyto control itwillget furtherand further“behind the curve,” hesaid.“It will continue to fuel the stock market but will make the day ofreckoningall the more painful,” he added.
Griffininvestedin stocks for the first time in college whena Palm Beach resident provided him some cash after hearing him discuss an innovative stock-trading strategy.
“I’ve actually forever indebted to Palm Beach, because that’s how I started my career,” Griffin said.
Darrell Hofheinz is aUSA TODAY Network of Florida journalist who writes about Palm Beach real estate in his weekly “Beyond the Hedges” column. He welcomes tipsabout real estate news on the island. Email dhofheinz@pbdailynews.com, call (561) 820-3831 or tweet @PBDN_Hofheinz.Help support our journalism. Subscribe today.
