Citadel’s Ken Griffin open to selling a minority stake in his hedge fund

Citadel’s Ken Griffin said that he would be “open to the possibility” of selling a minority stake in his successful hedge fund and that the multistrategy hedge fund segment is in a period of “consolidation.”

Griffin, who is the founder, CEO and co-CIO of Citadel, said he would be open to selling a minority stake at some point in the future.

Griffin is also the founder of market maker Citadel Securities. Citadel Securities sold a minority stake to Sequoia Capital in 2022. He said Sequoia brought insights on how to manage a rapidly growing business.

“We would look for a partner that feels like Sequoia,” he said about the possibility of ever selling a minority stake on the hedge fund side.

When asked about the potential tie-up between multistrategy hedge fund Millennium and asset manager BlackRock, Griffin said it would make for an interesting tie-up and that he respects the founder of both firms.

Griffin said the multistrategy hedge fund segment has seen rapid growth and that newer entrants and second- and third-tier multistrategy funds are facing a “thinning out.”

“We are in a consolidation phase of multistrategy hedge funds and it’s part of the business cycle,” he said.

On the private credit and private equity industries, Griffin said those firms have been the “beneficiaries of the opaqueness that goes with not being marked to market.”

He thinks the Securities and Exchange Commission is trying to push for more insight on valuations in the segment. But he believes there will be a regulatory rollback on policies that were pursued by the SEC under chairman Gary Gensler.

When asked about the recent election and the biggest concerns he has, Griffin pointed to inflation and immigration as two of the most critical problems for the U.S.

Griffin said America’s fiscal house needs to be put in order.

“American productivity is below where it needs to be for us to… deliver on the promises” made to forthcoming retirees, he said to a packed room of several hundred people.

Griffin doesn’t think there is the fiscal room to cut taxes today, and that real question is “where do need to raise taxes.”

On immigration, Griffin said that there needs to be a way to give people a long-term path to remain in America and that policymakers need to think about people who have come to America to work. “They should have a path to stay,” he said.

“If we deported everyone tomorrow inflation would be much higher,” he said, adding he didn’t know how the lunch he was speaking at would work if that was the case.

Griffin mentioned that roughly half of Citadel’s leadership team is made up of immigrants.

Asked about his own political donations to Republican candidates, Griffin said he donates because “I want to see someone like David McCormick in the Senate.”

McCormick was the former CEO of Bridgewater Associates, the world’s largest hedge fund, and served in the U.S. armed forces earlier in his career.

Asked if he has political ambitions himself, Griffin said he does, but pointed to supporting candidates as his current role. He did not state whether he would ever run for a political office.

Citadel has approximately $65 billion in assets under management as of Nov. 1. Griffin founded the firm in 1990 and it is ranked as the most profitable hedge fund manager by LCH Investments NV estimates.