Commitment to investors is the thesis at Ken Griffin’s Citadel, but how the firm achieves returns—through technology—is unique for a hedge fund. Steering strategy and growing the firm’s vaunted development capacity, CIO Tom Miglis is trusted with leading the way. And when you combine daring with talent, you can redefine what is possible. By Tim Bourgaize Murray with photos by Paul Elledge
Tom Miglis doesn’t think he is extraordinary—in fact, he insists he isn’t. Miglis’ hobbies are exactly two: work and family. In a time when C-levels in finance are known for their eccentricities, Miglis’ lack of pretense is endearing. At a recent meeting in a Manhattan breakfast spot owned by celebrity chef Gordon Ramsay and reportedly visited by the Beckhams the day prior, the CIO at Citadel ordered something slightly unexpected.
“Do you have any Cheerios?” he asked the server.
That moment looks like many others Miglis spends by the floor-to-ceiling whiteboards that blanket Citadel’s head office in Chicago. His expectations as CIO can sometimes be stunningly simple—foundational even—yet often they aren’t on a traditional buy side’s menu of options. That is the point.
Running technology at Ken Griffin’s $13 billion hedge fund since 2001, Miglis works without fear of failure, engendering a mix of collaboration, engineering wherewithal, and grit at the nimble firm. With a series of successes during that time, Citadel has not only weathered a period when other funds have faltered, but has dramatically altered the possibilities of what technology can do.
Miglis counts his luck, breaking into finance in the early 1980s with Salomon Brothers, a shop known for its forward approach to capital markets technology and one that, after restructuring with the Citi merger, has produced a number of buy-side head technologists.
"At Citadel, we use technology to change the nature of our people’s jobs. For example, we recognize that our portfolio managers’ and traders’ most important role isn’t the actual execution; it’s gathering information, discovering opportunities others aren’t seeing. You use technology to flip the equation around, and for Ken, that is key.” —Tom Miglis, Citadel
A colleague at Salomon and longtime friend, Tom Sanzone, who is now a senior vice president with Booz Allen Hamilton, says Miglis’ steady hand sets him apart. “Tom knows how to deal with conflicts and build the relationships necessary to deliver those high-risk, high-reward challenges he takes on,” Sanzone says. “They are often multi-dimensional, with both building the platform and managing the powerful personalities involved.”
In an industry that is known for them, Griffin is among hedge funds’ more powerful personalities. Famously founded in a Harvard dormitory room in 1991, Griffin’s Citadel offers seven single and multi-strategy funds that, taken together, produce returns at an annualized performance of 20 percent. With a staff of 1,100, Citadel is large for a hedge fund. But when Griffin brought Miglis on, he had greater ambitions, and a set of much larger competitors, in mind.
“In the early days, Ken would ask how we would use technology at Salomon, because of its reputation as the leader in applying advanced technology to trading,” Miglis says. “At Citadel, we use technology to change the nature of our people’s jobs. For example, we recognize that our portfolio managers’ and traders’ most important role isn’t the actual execution; it’s gathering information, and discovering opportunities others aren’t seeing. You use technology to flip the equation around, and for Ken, that is key.”
Stephen Morse gives a presentation on how traders are using information created via Twitter to derive trading insights.Subscribe to Weekly Wrap emails