February 1, 2023

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Hedge fund manager Ken Griffin is building a multi-billion-dollar corporate and private empire in South Florida — and it's having commercial, political and philanthropic implications in the region and beyond.

Mike Vogel | 1/9/2023

Griffin’s Empire

Outside of Florida, Ken Griffin paid $122 million for a mansion in London, $59 million for a condo in Chicago and $238 million for a penthouse in New York.

In Florida, beginning in 2012, he eventually made a series of Palm Beach purchases that total $450 million and 20 acres.

IN PALM BEACH

  • He’s created an ocean-to-intracoastal estate, the island’s largest, where he’s building his mother a 17,277-sq.-ft. main house and a guest house, plus gardens, on Billionaire’s Row.
  • His Citadel hedge fund also leases space in the former Neiman Marcus building on Worth Avenue for employees who live on the island.

ON BRICKELL IN MIAMI

  • Griffin paid $363 million in April for 2.5 acres of Biscayne Bay waterfront, where he plans a $1-billion office headquarters tower, helipad, marina and restaurants. He says he will personally recruit tenants for the space his firm doesn’t occupy.
  • He also purchased for $286.5 million a nearby building at 1221 Brickell Ave.
  • He’s leased 95,000 square feet at an office tower nearing completion, 830 Brickell.
  • Citadel also has leased at the Southeast Financial Center.

On the residential side:

  • Griffin set a record for a Miami-Dade single-family home when he paid $106.9 million for philanthropist Adrienne Arsht’s two bayfront houses on 4.2 acres sitting 15 feet above sea level on a bluff on Brickell in Coconut Grove. Combined, the houses have eight bedrooms and another four in apartments over garages. The oldest of the two homes dates to 1913.
  • Griffin, according to reports, has spent about $169 million on properties on Star Island.

Influx from Wall Street

Citadel and Citadel Securities’ relocation to South Florida serves as an exclamation point to what’s been growing for years in the region, in hedge funds, private equity and other high finance, from Miami to Palm Beach, say Greenberg Traurig shareholders Jaret Davis in Miami and Bruce March in Fort Lauderdale, who work with hedge funds and private equity and finance firms. “What Ken has done is validate what has gone on more quietly,” March says.

Counting Citadel, South Florida is the headquarters for six of the largest hedge fund managers globally. At least another 10 have a South Florida office.

While Griffin was building his empire in Chicago, South Florida’s financial world was broadening. Major private equity firms, homegrown or transplanted, grew here along with international banking and investing. Florida even had a hedge-fund industry of its own, albeit tiny compared to the firms centered around Greenwich, Conn., New York and other financial capitals.

In 2005, Florida Trend reported approximately 150 hedge funds here in some form. By today’s standards, they were modest. Boston Red Sox owner John Henry’s Boca Raton management company was one of the largest Florida-based firms, ranking 87th nationally with $3 billion in assets. The take-home for managers, relatively speaking, was modest, too. Henry ranked 20th on Institutional Investor’s 2002 list of the highest-earning hedge fund managers with $40 million. (In comparison, Griffin’s 2021 earnings were $2.5 billion, good enough for third among hedge fund managers nationally.)

Kelly Smallridge, CEO of the Business Development Board of Palm Beach County, aimed for a bigger industry presence. In 2013, nine years before Mayor Francis Suarez’s famed “How can I help?” response to a California venture capitalist’s tweet suggesting that Silicon Valley move to Miami, Smallridge mailed letters to 30 Manhattan hedge funds suggesting they locate in Palm Beach County. The New York Post and CNBC picked up the story. Smallridge received a deluge of interest. Soon, a single office building in West Palm Beach had four hedge fund offices.

Big names in finance relocated here. Billionaire and activist hedge fund manager Edward Lampert — once Connecticut’s richest person and owner of Sears — moved to Miami. Appaloosa Management hedge fund founder David Tepper, New Jersey’s richest person, followed in 2015. Four years later, Carl Icahn announced his firm would move to Miami.

The influx continued. Elliott Management relocated to West Palm Beach from New York. In 2021, Goldman Sachs opened a satellite office in West Palm Beach. Thoma Bravo announced a new Miami office.

COVID-19 proved a migration accelerant as Northerners came to Florida to ride out the pandemic — a “forced experiment of living in South Florida,” says Andrew Trench, executive director at real estate firm Cushman & Wakefield. Trench says the temporary transplants discovered Florida’s quality of life, relished the time outdoors with family and the short — relative to New York — commutes, tax savings and lower rents.

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