Reade Griffith reflects on Citadel's rapid asset growth during his roughly four-year tenure leading event-driven investing and the London office in the early 2000s.
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.”