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Citadel's Miami move: Ken Griffin explained the other reason it began

Hedge fund Citadel is going all out on Miami. Having relocated some Citadel Securities staff to the Four Seasons Palm Beach during the pandemic, it's since poached the executive chef of the hotel to be its "global head of culinary" and has commissioned architects Foster + Partners to build a new "iconic tower" office space on a 2.5 acre waterfront plot at Brickell Bay as it moves its head office to Miami from Chicago.

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Citadel founder Ken Griffin has spoken at length about his reasons for relocating the firm's head office. Miami is "rich in diversity and abounding with energy," Griffin informed his employees in 2022 when he announced the move. By comparison, Griffin criticized Chicago as having a problem with crime and said that many Chicago-based employees had already asked to transfer out of the city. 

Speaking last week at the Futures Industry Association's annual gathering, however, Griffin elaborated another reason why Miami was chosen in the first place. In the midst of the pandemic, Griffin said Citadel chose to open "a facility" in Palm Beach after its research suggested that, "viruses in general are less transmissible in a high-humidity, high-sunlight environment.

"Take out a map of the United States and you end up pretty quickly focused on South Florida as a destination for where you're going to move people to in a moment where you're trying to manage the health considerations of your team," Griffin added.  

Griffin and his family moved to Miami sometime in 2022. Various other employees have also relocated. Business Insider this week published glowing testimonies from a portfolio manager, a quant researcher and two other Citadel employees on why it's good to live "somewhere full of sunshine." Griffin himself is equally enamored: "I will tell you this, from the day after I moved here, I've never looked back," he declared at the Futures Industry Association shindig.

Speaking at the same event, Griffin said Citadel's Chicago office has already been hollowed out. "The vast majority of our colleagues from Chicago have chosen to either relocate their families to Miami or to New York," he explained. "People vote with their feet. It's just that simple. Chicago is going to need a lot more than a billion dollars spent on LaSalle Street to turn its problems around." 

For all Miami's benefits, though, there are signs that Citadel's portfolio managers, at least, are in other offices still. LinkedIn data, which may not be up-to-date, indicates that the fund has 200 portfolio managers (PMs) in New York, 40 in Chicago and three in Miami.

Citadel declined to comment for this article. The current dearth of Miami PMs might be attributed to the fact that the new tower office won't be finished for a long while, and that an interim office at 830 Brickell Yard won't be ready until the end of the year. Citadel is expecting 400-500 of its people to be located in Miami by December, including transfers from Chicago and new hires. Not all of those will be portfolio managers, though.

For the moment, most of the new portfolio managers Citadel hires don't seem to be in Miami and do seem to be in New York City, where the fund has recently added the likes Kevin Conroy from Orion and Max Richards from Morgan Stanley.

Chicago portfolio managers who are disinclined to move to Miami can always choose New York, too. Alternatively, rival local funds may want to hire them. Balyasny is based in Chicago and appears keen to add new talent after its performance lagged bigger multistrategy hedge funds like Citadel last year. 

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Photo by aurora.kreativ on Unsplash

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AUTHORSarah Butcher Global Editor

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