Eric Siu and Neil Patel discuss how Ken Griffin built Citadel into a $62.3 billion hedge fund, including aggressive talent recruitment from Enron that led to major commodities gains. They cover why speed and in-person meetings matter for deals, and how Griffin's personality shaped the firm's culture.
You know Citadel? Yeah. Citadel is huge, right? They do all kinds of investing, right? From what I know, the story with Ken Griffin is this. So this one guy, he worked at Enron, this guy, John Arnold. So he said, look, there's a fun Citadel story that demonstrates this approach, which, which Ken Griffin shared during his talk at some— when Enron filed for bankruptcy. So he said, when Enron filed for bankruptcy, Ken Griffin, I chartered a Gulfstream jet, put 16 people on it to Houston, and all we did was interview people at Enron for several days to understand what worked, what didn't work, how they made how they ran the business, what the competitive advantages were. I hired the entire leadership of the quant research effort at Enron. UBS bought the business except for the research team. We've made $30 billion in commodities since then. UBS shut the business down. In this case, Ken saw that the quant research strategies and talent at Enron had staying power and the others likely did not. UBS probably didn't do this work and it cost them. So this guy responds. This guy was one of the traders. He's like, can confirm. He's like, I was the head trader at Enron when it filed for bankruptcy. I received many calls from firms that were recruiting. I was busy trying to close out the trading book and wanted to make some— take some time to decide my futures. But Citadel was by far the most aggressive. Other companies set up interviews with Enron senior people. Citadel interviewed seemingly everyone in the trading operations, all function at all level. Let me speed this up a little bit. Citadel's team called him twice. He declined to meet. He's like, it was apparent that their intent was— the intent was to reverse engineer the business. Basically what happened was Ken was the third call. He said, hey, would you be down to talk talk to Ken. And then he was on the airport heading to Aspen. Ken was like, hey, I'm gonna fly to Aspen, you want to meet tomorrow? And that's, that's what it took. Ken flew to Aspen to meet me the next day. They had a great meeting. They offered him the job as the head gas trader. He said, I wanted to fully run an operation and thought there would be more upside if I had my own fund. So I declined. But they still kept in touch to this day. And they, they built what this— they gained what, $30 billion in commodities? Did he—
he didn't take the job?
He ended up starting his own fund. He did really well.
Oh, cool.
Yeah. Ken started with a niche, convert arb, and built one of the most successful financial firms that he's ever tried. So my point of saying all this, this story here is that sometimes when you're serious about something, you don't do what other people are doing where they're waiting weeks. You just call.
Yes.
And you get on the plane and you try to get the deal done that day. Yes.
Yeah, I agree with this. I don't understand why people just take forever. Sometimes when we're doing M&A, we go through bankers because bankers represent some of the sellers. And there's a lot of these bankers that reach out to us. So one of these bankers that we're dealing with in Latin America is like, oh, I got a lot of these deals, you should check it out. I'm like, okay, sounds good. Takes them weeks, then months to start getting back to us. And we started getting some of the numbers. I was like, dude, this business just seems really terrible. Client concentration. I'm like, you're talking about, you know, 1 or 2 of their customers make up pretty much all of their revenue. I'm like, what kind of business is this? I'm like, it took them this long to tell us this information? So there was another business that we already signed an NDA for, I literally just pick up the phone myself and I'm like, hey, I messaged them on LinkedIn. I'm like, hey, this is my phone number. WhatsApp me. I want to talk about buying your company. And that was it. They WhatsApp me, talk to them. I got all the numbers in a week and a half and it would've taken their banker probably a few months to get it. And I got it in the format that I wanted it. And I'm like, cool. I'm just tired of all the bureaucracy and people trying to slow things down. If you want something done, just go and get it done. And this is why People like Ken from Citadel or Elon own jets. Some people own jets so they can post pictures online and be like, look at this cool plane that I have and all these vacations I can take. A lot of these business guys have jets, like even Warren Buffett, because when there's a problem, they can just hop on whenever they want, fly there, fix things, and then come back and go after the next thing to tackle.
All right, so I wanted to take a moment to tell you about my podcast co-host Neil's agency called NP Digital. And they work with a whole host of global companies or global organizations. Also, Neil has SEO tools such as Ubersuggest and AnswerThePublic. All you have to do is go to npdigital.com to learn more, and we'll see you on the other side. Nothing beats in person. Like, as much as I like— as much as most people like hiding in their home, um, most introverts— I'm an introvert. Neil's an extrovert, actually.
I think I'm an introvert.
No, no, no. You're on the thing, you're maximized on extrovert.
Really?
Yeah, I'm introvert, but people think I'm— People think I'm extroverted.
I'm not. Dude, I think we're the opposite. You go to functions and stuff.
I just want to stay home all the time. No, okay, but when you're there, you're actually very outgoing. Like, I prefer to just hide.
When I'm at events, I just talk to you or someone I know and no one else.
No, you do. Trust me. Okay, when we go out to eat and stuff, you're very outgoing with like the waiter and like everybody, right? In general, you're asking. Yeah, I'm not like that. So yeah, so I'm, I'm an extrovert introvert. You're just an extrovert. Yeah, plus the way you handle the phone and you call people immediately. Yeah, I tried to do that before. I'm just like, yeah, I'm just like, I like texting them. So my form is just texting them and then once they're active, then I call them. You just don't give a crap. You just call them.
Yeah, I don't care what they're doing. Pick up the phone. We're solving this right now. Yeah.
So that's what it is, guys. If you guys have any other questions, let us know. And that being said, go to marketingschool.io/agency if you want to grow your agency faster, and we'll see you tomorrow.
