Opinion
Griffith: High-frequency trading is retail flow arbitrage, not genuine liquidity
“I'm not a fan of high-frequency trading, so I see it as an arbitrage on retail flows. I know people argue that they're providing liquidity. I don't believe it. It's a high-sharp ratio strategy. I don't like things where I think people are making money on almos…”
Assertion Not checkable as stated
Griffith: In 1995 Only Two to Four Corporate Hedge Funds Reached $1B
“And a big, big macro hedge fund at the time would have been three to five billion. And there were only two or three or four A billion dollar, what I call micro hedge funds, focusing on corporate actions, and Baker and I was one of them.”
Insight
Griffith: Public market investing requires operating with imperfect information and frequent mistakes
“As a private market investor, you get, at least in your starting gun, you have near perfect information, all the data about the business, you get inside, you can do your surveys of what other competitors are doing, and really make a very educated decision at t…”
Assertion Not checkable as stated
Griffith: Post-2008 US bull market conditioned mid-career investors to maximize long risk
“I mean, since 2008, other than the last 12 months, the US market was just up and to the right. There are a lot of people who are in the middle of their careers who've only seen getting long risk benefit, and those who took the most risk made the most, and it's…”
Prediction Not checkable as stated
Griffith: European markets may face much higher volatility over the next five years
“Now, the next five years in Europe may be much more volatile. If you don't have the toolkit, you're going to build the toolkit, but you're building it rather than employing it.”
Insight
Griffith: Macro drivers cannot be separated from corporate investing in Europe
“Europe, you have not been able to strip the macro from the micro because the macro has been driving the micro for much of the last two decades. In the U.S. It's been much less so.”
Insight
Griffith: European markets often misprice short-duration headline risks cheaply
“But what I've often seen is that there has been mispricing in Europe In what I perceive to be short duration risk, things that might happen in the next two or three months that could be very volatile, and you've been able to buy the equity market or currency o…”
Insight
Griffith: Event-driven investors are inherently short volatility
“When you're an event driven investor, you're short volatility. Volatile events makes events take longer. It reduces the probability of certain events happening.”
Insight
Griffith: Heavy hedge fund ownership creates unexpected correlation in downturns
“If it's too much hedge funds and hedge funds have a bad time, all these positions become correlated.”
Insight
Griffith: Growing AUM from $1B to $5B turns alpha into beta
“Sometimes the right size is small, and you have to be happy with that. You can't grow beyond where that alpha component is going to be reduced. There are plenty of people who are great at running a billion, but then they end up running five billion, and they s…”
Insight
Griffith: Direct litigation funding creates reputational risks for institutional allocators
“For some institutional investors, that's a complicated place to be because there is quote unquote reputational risk if you're funding litigation. You don't know where the spear is going to point. It might get pointed at one of your competitors. It might point …”
Insight
Griffith: Equity markets typically lead credit markets in signaling macro risk
“Sometimes you'll see risks in the credit market before you see them in the equity market. Sometimes it's the opposite. Typically the equity market is first and credit market is second, but it can vary.”
Insight
Griffith: Selling early-stage businesses within five years sacrifices value before liftoff
“The first five years, you're much more valuable to the business Then they are to you. If you have to sell it at that point, you're never going to get the value. It's just about to take off.”
Insight
Griffith: Buying and selling at a discount still delivers full NAV returns
“And yeah, if you buy at a discount and sell at a discount, you get the return of NAV along the way.”
Assertion Supported
Griffith: Tetragon's Portfolio Cannot Be Replicated via Direct Fund Investments
“There are things that we do with our capital on our balance sheet, which isn't replicable, whether it's investments that we just make in public markets or private markets and hold on our balance sheet, maybe We've invested some money with a strategy we think i…”
Insight
Griffith: Excessive loyalty to an individual becomes disloyalty to the team
“One of the things I've learned is if you're overly, in the professional context, if you're overly loyal to an individual and give them too many chances, eventually you're disloyal to the team. And ultimately your loyalty is to the firm and to your, to a fund o…”
Insight
Griffith: Military Intelligence Source-Tracing Is Invaluable in Financial Markets
“A lot of time was spent trying to make sure that the information you had was a unique source, and it wasn't just a confirmatory thing, that you're getting the same thing reported through different sources that ultimately lead to the same place, and you're real…”
Assertion Partly supported
Griffith: Citadel had under $1B and was smaller than Baker Nye in 1999
“When I went, they were just
Approaching a billion. So they were no bigger than Baker and I.
In fact, Baker and I was bigger at the time.”
Assertion Not checkable as stated
Griffith: Ken Griffin Required All Senior Citadel Partners to Base in Chicago
“Ken Griffin had decided that he didn't want people who were important in the business partners running bits of his business all over the world. He wanted everybody who was senior to be in Chicago.”
Assertion Partly supported
Griffith: Citadel Grew from Under $1B to $8B During His Tenure
“We'd gone from less than a billion to eight billion at this time. Sidville was now one of the biggest hedge funds in the world.”
Assertion Supported
Griffith: Tetragon manages $35B in client capital and $2.5B–$3B proprietary capital
“What Tetragon has under its asset management business, TFG asset management is what we call it, is we run about 35 billion of capital for our partner investors. We have two and a half, three billion of our own capital at the core”
Disclosure
Griffith: Tetragon seeds new strategy teams internally before raising LP capital
“Then we tend to hire people and build a team, often investing our own capital in the beginning, helping get them going. And then when we think that the team is there and the infrastructure is there and it's oven ready, we then take it to investors with our own…”
Assertion Supported
Griffith: Tetragon delivered roughly 12% net NAV compounding over 15 public years
“We have compounded the NAV of the firm in a very consistent way over the 15 years we've been public with very low volatility. Now, our goal was to do 10 to 15% net after our fees to investors. I think we've done about 12, and the volatility has been quite low”
Assertion Partly supported
Griffith: Tetragon has never issued shares or conducted an equity placing
“So the first thing is we've never issued shares, done a placing or anything like that.”
