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Citadel’s Griffin Brings Billions to Miami – Wealth Management

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Amanda L Gordon | Sep 21, 2022
(Bloomberg) — In a few years and change, if everything goes to plan, Miami will look far different than it does today.
There will still be nightclubs, Little Havana, perhaps even the crypto diehards. But alongside them: programmers and portfolio managers filling the streets of Brickell and driving breathtaking profits inside the state-of-the-art, built-from-scratch global headquarters of Citadel and Citadel Securities. Plus legions of lawyers, accountants and hedge-fund hopefuls following the money to an enduring Wall Street South that outlives the Covid-19 pandemic.
Related: Griffin’s Citadel Seen Behind Record $363 Million Miami Land Purchase
This is the vision of Ken Griffin, instantly Florida’s richest person after moving his family and financial empire to Miami from Chicago. Depending on whom you ask, his maneuvers conjure Niccolo Machiavelli or Ayn Rand, Robert Moses or David Rockefeller. With a $29.6 billion fortune, he’s a force in business, philanthropy and, especially of late, politics. 
Some Miamians are more enthusiastic than others. Proponents point to the multiplier effect on the local economy from thousands of well-paid workers, with everyone from Jeb Bush to Jorge Perez viewing Citadel as a catalyst that turns Miami into a new US capital of high finance and tech, with all the infrastructure and culture that comes with it. Skeptics question which communities will be displaced in the process — and whether Griffin has bigger plans in the works.
Related: Lisbon, Miami and Dubai Ranked Best Places to Work for High Earners
The Citadel founder is attempting a rare feat: to pick up and move at the prime of his career, at a time when his business is thriving, to a more malleable city where the wind is firmly at his back. Instead of a foil like billionaire Democrat J.B. Pritzker in the state capitol, he has a like-minded governor, Republican Ron DeSantis, who Griffin said he’d back for president in 2024, even if up against Donald Trump.
Griffin, 53, hasn’t put forth a formal agenda or made splashy donations. The site of Citadel’s headquarters-to-be — a gleaming waterfront tower, with a wish list that includes a helipad, a marina and windows that open to Biscayne Bay — is, for now, a vacant lot. He plans to get his family and colleagues settled and listen to South Florida’s needs before making his presence felt, both professionally and philanthropically, in the region where he was born and raised.
But make no mistake: He plans to have an impact.
“We’re not sort of in — we’re all in,” Griffin said in an interview in Miami.
At the same time, Griffin said he “will definitively be involved in the presidential race,” and won’t rule out a move to Washington. If called upon — particularly if the US is in a recession — he’s prepared to join the cabinet of DeSantis, whom he first met in Citadel’s Chicago office during his initial gubernatorial run. One option may be Treasury secretary, a position he said the Trump administration had asked him to discuss, but he declined.

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Ken Griffin

Ken Griffin
In such a scenario, Griffin could permanently step away from his business. Peng Zhao, Citadel Securities’ chief executive officer, and Pablo Salame, Citadel’s co-chief investment officer, could already run the firm without him anyway. But that’s all hypothetical — as is Citadel Securities’ initial public offering, which Griffin says isn’t likely this year or next.
Griffin has acknowledged this much: Unless Citadel does something wrong, its move will permanently reshape Miami. While his business only relocated recently, he’s spent a decade building a huge personal real-estate footprint in the area, affording him clout in both Miami and Palm Beach, Florida, where his firm is also opening an office. He views the two cities, now connected by the Brightline high-speed rail, as akin to Manhattan and Greenwich, Connecticut.
The comparison has only become more apt since the pandemic. New arrivals in the region include multibillion-dollar investors Dan Och, Dan Sundheim and Josh Harris, among others drawn by lower taxes and warmer weather. Griffin already considers some recent transplants part of his circle, including Paul Tudor Jones, who moved from Greenwich, and Bruce Rauner, the former Illinois governor. 
Even among these multimillionaires and billionaires, though, Griffin has outsized sway. His Citadel hedge fund oversees about $57 billion, catapulting the assets managed by Miami-based firms. That figure reached $688.3 billion by late August, up from $303.4 billion a year earlier, according to analytics company Convergence Inc.
“Someone like Ken will have no trouble navigating around Miami because he will have instant new best friends,” said Phillip Frost, whose name is on Miami’s science museum and, like Griffin, owns property on the city’s exclusive Star Island. “He will be sought out, no question about that. His job will be to fend them off.”
Not everyone will cozy up to Griffin. For one, there are Democrats who see DeSantis and Francis Suarez, Miami’s Republican mayor, gaining a key backer and ally. Those who are used to being bigwigs now must contend with someone in a different wealth stratosphere. 
He may also have to deflect criticism of bringing a sudden wave of high-earning financiers into Miami, where rents are surging more than any other large US metro area, squeezing middle- and low-income households. 
“It’s really hard if you grew up in Miami, lived in Miami, to have that kind of money to compete against money from New York or Chicago,” said Ana VeigaMilton, who runs the Jose Milton Foundation. “It will affect my neighbors, my friends.”
VeigaMilton, who has lived in Coral Gables since 1998, said the city’s big issue is a lack of available homes, with transplants paying whatever it takes to close a sale. 
“This is really an inorganic infusion of upper-middle-class and rich individuals that are suddenly coming in and widening the wealth gap even more,” said Alberto Ibarguen, head of the Knight Foundation, speaking broadly about the influx of the wealthy during the pandemic.
Ibarguen, whose foundation devotes much of its billions to the area, including engineering programs, sees Griffin as a potential partner to help develop tech talent locally and tackle income inequality in the majority Hispanic city. There’s an opportunity for him to be a leader to address community issues.
“Somebody who’s had that kind of success, has a process, a way of thinking, that can harness individual energy into a collective goal,” Ibarguen said.
Griffin, who doesn’t speak Spanish, said he has respect for the hard-working ethic of Hispanic culture. He said in his letter to employees that he was excited to expand “in a city so rich in diversity and abounding with energy.” 
That energy is coming from all over; from Miami Beach to Wynwood, Coral Gables and Pinecrest. There’s also Coconut Grove, where Griffin paid about $107 million for Adrienne Arsht’s waterfront estate, setting a county record for a single-family home.
But the spot poised for a Citadel makeover is the financial district, called Brickell after one of the city’s founding families, and located in the middle of the sprawling metropolis. 
Griffin said he’s spent a lot of time walking around Brickell, where he’s bought not just the blank site where he’s designing a tower, but two buildings that give him a large footprint one block inland. 
And he’s not shy about contrasting it with the city he left behind.
He recalls two stories about Chicago, which he sees devolving into anarchy: One of his senior colleagues was robbed after a person put “a gun to his head” as he was on a coffee run, and another was waiting for a car when confronted by “some random lunatic just trying to punch him in the head.” He called on New York Mayor Eric Adams to embrace a public safety strategy, or else risk going down the same path as Chicago.
Griffin’s personal properties across Miami also include Star Island, only accessible by a gated bridge, and in the affluent neighborhood of Coral Gables. Neither are in the city of Miami itself, which recorded 35 murders this year through mid-September, or about eight per 100,000 residents. That ratio is twice as high as New York’s, though just half of Chicago’s. When expanding to Miami-Dade County, the figure falls to about two per 100,000.
People who live and work in the area where Griffin will build a tower say they’ve noticed a larger unhoused population at night. Reported crimes over the past month include car thefts and assaults, according to the city’s website. The Brickell Homeowners Association has held meetings with police and staff of the Miami-Dade Homeless Trust to address neighbors’ concerns, while Dade Heritage Trust, across the street from the Citadel site, installed cameras to monitor its grounds.
Meantime, Brickell continues to evolve. Before the pandemic, Brickell City Centre, a retail and dining destination, jump-started the area’s reinvention, along with luxury condo Brickell Flatiron by Italian developer Ugo Colombo. Now cranes and construction workers abound, with several new high-rises in the works, attached to names such as Cipriani, Baccarat and Stephen Ross. The Underline, a half mile of bike path and green space under the Metrorail that aims to become a 10-mile park, is Miami’s answer to New York’s High Line.
As Griffin sees it, nothing will compare to Citadel’s complex once it’s built in five or six years. A video rendering envisions the new tower, which could exceed 1,000 feet (305 meters), as a standout piece of architecture along Miami’s skyline. Griffin, who estimates it will cost $1 billion, wants retailers and restaurants on the ground floor that draw foot traffic like City Centre. He plans to personally pitch office space to some of the most valuable US companies, like Apple Inc. Another idea is that it could one day be home to a computer science program in partnership with a nearby university. 
“I’m going to work to create a building that’s iconic in Miami,” Griffin said. “If it takes longer to fill the building, so be it. It’s more important to me to create the right environment to draw human capital that drives Citadel.”
As with any waterfront property in Florida, climate change and natural disasters loom large. Citadel’s future headquarters is located on a stretch that floods even in a relatively mild Category One hurricane. It will be proofed for resilience, Griffin said, but noted that cities in Europe are at a lower sea level than Miami.
“The counternarrative you hear about Miami most frequently is we’re going to be underwater,” Suarez said in an interview. He noted that the Federal Emergency Management Agency recently lowered the city’s flooding score (though much of Brickell, as well as the entirety of Star Island and Miami Beach, remains under threat).
Griffin acknowledges there will be some challenges with the migration. The ages of Citadel’s Miami staff will likely resemble a barbell for a while, with those in the middle less likely to relocate given spouses’ jobs and children rooted in schools. Much of the junior staff will come from the class of 2023 and are expected to go mostly to New York, Miami and London. Miami headcount could reach 1,500 people in 10 years, he said.
Those in the hedge fund world are curious how the Citadel ethos will fit in Miami. Anshu Motwani, 42, worked for Blackstone Inc. and Goldman Sachs Group Inc. before moving to Miami, joining Bayview Asset Management in Coral Gables, where she’s a senior executive. Had she stayed in New York, she said she couldn’t imagine ever having her current work-life balance. 
“It will be curious to see if the culture of Citadel adapts slightly to this environment,” she said. “That face time — being in the office 80 hours a week — that just doesn’t work in Miami.”
Some have speculated that Citadel could one day spawn hedge fund “cubs” that also set up shop in Miami, akin to those who worked for the late Julian Robertson at Tiger Management. That would go against the past three decades of precedent: While Citadel has produced a few high-profile launches, most investors who leave Citadel move to other firms, rather than starting their own hedge funds.
More likely is the continued influx of big law firms like Sidley Austin and Quinn Emanuel, which have planted a flag near the large financial institutions that have moved since the pandemic.
As for philanthropy: Griffin said education is his top priority, and he has staff already talking to private schools and advocates for public institutions about opportunities. Zhao, on the board of the Asian American Foundation, is excited about creating a strong community in Miami, where the Asian population is about 2%.
Even if newcomers give locally, though, they may bring their past ivory towers with them, leaving some wondering just how much they’ll integrate with the existing community.
“You’ve got people with such deep pockets, they’re going to be creating entire networks of their own,” said nonfiction author and journalist Nicholas Griffin, who moved to Miami 10 years ago with his wife, Adriana Cisneros, chief executive officer of the Cisneros Group.
For now, it doesn’t look like Griffin’s $130 million in parting gifts to Chicago will be matched in one fell swoop around Miami. Griffin has given $25 million across the city in the last few years — much of it before he announced his move. He has already backed broadband access, the Miami Resiliency Fund and the Underline project, with Citadel employees set to volunteer there next month.
Griffin says if Suarez contacts him with a good idea, he’d certainly consider backing it. He recalls when he complained about potholes on a Chicago bike trail, and just a few days later, Rahm Emanuel presented a plan and budget. Griffin wrote a check on the spot.
Franklin Sirmans, director of the Perez Art Museum Miami, said he’d like Griffin’s Basquiat, because it would resonate in the city with its Haitian population. Griffin, who has an extensive art collection, has taken it out of Chicago’s Art Institute, but it’s not clear yet where it’s going.
“I don’t think the character of Miami has ever been entirely locked,” Nicholas Griffin said. “It’s still such a young city — the future is up for grabs.”
–With assistance from Dave Merrill, Tom Maloney, Katherine Burton and Jennifer Epstein.
To contact the author of this story:
Amanda L Gordon in New York at [email protected]
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