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Reade Griffith

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72

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2022-10-17

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2022-10-17

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1. “So, I think one of the things is culture. You have to think about what kind of culture you want for your firm, whether you get it perfectly right or not. Hopefully you evolve it correctly over time. But I think that's an important first principle because there's certain type of people you're looking to partner with and certain type of people you're looking to hire. And obviously a lot of people and seeing a couple of other cultures in the investment committee both say that El Baker and I before that and other firms where I had friends and I talked to them about what they'd done.”

   2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

2. “Was new was the investor side. I had to go out and meet people and raise capital and hire people that could help me do that. And there were some other strategies that we might want to introduce in the firm so I would need to go out and find other partners potentially to start the business. But I felt like I had the skills. I had just been lucky enough to have had all those experiences early in my career The timing felt good, markets felt stable enough as well. You need to have a little runway of a stable world to get a business off the ground as well. And it felt like you never know on timing. A macro bet can hit you at any time. But it felt like it was an okay time as well to get out and raise some money and to try to start something new.”

   2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

3. “Certainly in the London market, I now had some profile because I was from a regulatory perspective CEO of London for Citadel and running the event driven business. We had success that was well known in the market. I didn't have a lot of exposure to investors. I had some exposure, a small amount of exposure. Most of the handling of investors was done in Chicago by Ken and other partners that were there, but sometimes people had come to London or wanted to meet me as well. And so I'd had some exposure. But it just felt like I'd been at a firm that had been incredibly successful. We grown to 8 billion. I'd started a couple of things for them. If I could start these things for Citadel, I could start them again successfully for myself or someone else. I'd run team. I was running a large global team of analysts to run the event driven business. So the investing side was there. The organization and leadership bit was there. Certainly, the OMI element.”

   2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

4. “It's a good question and I'm a very methodical person and process thinking person. I'm not impetuous, I would say. So for me, it was a calculation as it would be for anybody. I was at this point I've been involved in investing for only seven years, but I've had a great experience. I had been at a firm that had been involved in the business for 30 years. I had learned from people who had been there. I'd helped build very exciting new business in London for Citadel and open up their approvals, hire all the people, run the office, build the businesses, even at that time. I'd also help Citadel open up their office in Tokyo and help hire the people. And I'd spend some time out there in the first few months when we got that office up and running and came back to London. So I had started and helped build some new businesses for a firm, a great firm like Citadel.”

   2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

5. “With my wife. And so you have to make a decision. And my decision was, as much as I love the firm and love the opportunity, actually what I really wanted to do was to be an entrepreneur. And so it was at that stage that I decided to leave the firm and to find partners and build a business based out of London, which is what we did.”

   2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

6. “There was a time when Ken Griffin had decided that he didn't want people who were important in the business partners running bits of his business all over the world. He wanted everybody who was senior to be in Chicago. I think I was the fourth partner of the firm. So I had now been in London for about four years. I was running the Event Driven Business Globally. Alec Lidowitz was now off building a long short business and they wanted me to come back to Chicago and get involved in energy trading as well. And anyway, there was a whole desire. And that was a decision point for me. I'd had a great experience. We'd gone from less than a billion to 8 billion at this time. Sidville was now one of the biggest hedge funds in the world. I was running London, running event driven, and they wanted me to come back to Chicago. I found somebody to be my replacement to administer the office in London and was preparing to go back. But it was a big decision, right? Do I want to go back to Chicago? It's at least a three to five year decision. I like being in London. I was about to have my first child.”

   2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

7. “Hire a bunch of people, bring them to Chicago because I'd gone to law school, then you can run the legal and regulatory process as well and set up all the regulatory approvals. And that was a complicated pathway at the time. And so I said, fine, I'll do all that and we'll get an office set up in London. I'll go run it for you and we'll bring all the businesses over. And, you know, we'll start with 15 people rather than three people and we'll build it to 50 people rather than five people. And that's what attracted me to Citadel at the time. When I went, they were just approaching a billion. So they were no bigger than Baker 9. In fact, Baker 9 was bigger at the time. Everybody was younger and earlier in their career. The energy and the desire was different and been in their career for 30 years. They had been in their career for five years, right? And so it was just a different place and it felt much more like where I should be going next. And so I joined them.”

   2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

8. “Citadel's view was much more ambitious. They wanted to bring all their businesses there. They wanted to hire a much bigger team, but they didn't have anybody within the firm at the time who wanted to go to London who was significant. And Alex Lidowitz, who had set up the merger and event business at Citadel, introduced me to the other partners of Citadel. And we agreed that I should join, come to Chicago, go to London.”

   2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

9. “The time there was a new currency coming, the euro, and you're going to get rid of French francs, John Marx, Italian Lira, and you're going to go to one currency that was going to break down barriers in Europe and suddenly make Europe much more liquid and much more investable. And that felt like a disruption, a catalyst, and potentially a reason to go to London. And there weren't that many hedge funds in London at the time. Hedge funds were largely a US industry, and it seemed like a great opportunity. And so I spent time talking to the principals at Baker and I about this, and they were supportive. They're like, look, you can go, you can hire a receptionist, you can maybe hire you on our annual analyst and we can make a presence. Now these guys have been running for 30 years. Again, very successful firm. I'd learned a lot being there. But their ambition was to go and do it, but to do it in more of a controlled smaller way. And that was sort of the way they were running their business. At the time,”

   2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

10. “I then ended up with a friend through a friend who had gone to a startup hedge fund in Chicago called Citadel, and he had been at JP Morgan, and he was brought in to set up an event-driven merger arbitrage kind of investment strategy for them. And he was very focused on things in the U.S. I was doing things in the U.S., but I was also doing things in Europe and trying to do things in Asia, which at the time was really just Australia because that's where you had a lot of liquidity, predictable legal system, language skills that I had none, but at least English work in Australia. And so I was doing a lot of things globally where he was doing things in the U.S. And we started talking all the time about investments in trades. And after three or four years, we're pushing on 1998, 1999. I was fascinated with what was happening in Europe.”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

11. “Everything about everything that had happened in Wall Street for the last 28 years. What an amazing place to start your career, learning from them. They were doing event-driven investing and merger investing. They were doing a little bit of convertible arbitrage, a little bit of distress, but just a fascinating place to start. So I worked there, a small team, can't remember ever leaving the office really those first few years, just trying to absorb what you could absorb.”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

12. “Dick Dynam read it or heard about it when he was at Goldman and immediately was like, I need to go do this and very quickly set up. So when I got there in 1995, it had already been running for 28 years. So here's a hedge fund that was a billion dollars doing what I would call micro investing, focusing on corporations and corporate actions and individual stocks rather than macro investing at the time there were people like Steinhardt that were involved Caxton, Soros, these were the big names in the macro investing and a big, big macro hedge fund at the time would have been three to five billion and there were only two or three or four billion dollar what I call micro hedge funds focusing on corporate actions and Baker and I was one of them. So it was one of the biggest at the time had been going for 28 years. They'd already made a fortune they'd already been very successful for investors and they knew”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

13. “Dick Dye took a liking to me and offered me a job once I graduated. And what was fascinating about that first experience was the firm called Baker Nye at the time. It was started by a gentleman named George Baker whose family was very wealthy. They had donated the money to Harvard Business Schools where the Baker Library, the Baker Scholarships, and all these things come from. And that money had met talent. Dick Nye had run the Arbitrage Jessica Goldwyn. He was clearly somebody well ahead of his time. He had set up this hedge fund in 1967. Clearly, they were in the first five hedge funds ever launched. The first hedge fund was launched by Alfred Jones, the father of hedge fund investing. He was a professor at Columbia and then eventually went to Fortune and was writing and eventually found a strategy he liked instead of the first hedge fund. But when he had written that article, I think in fortunate time called Fashions and Forecasting,”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

14. “So I was lucky enough to get a job back for people really knew what hedge funds were. So this was back in 1994, 1995. I liked my summer experience at Goldman. It was a great firm, but I didn't want to work at a bank. I wanted to work at something smaller and more entrepreneurial. And I managed to find this firm started by a gentleman named Dick Nye and Richard Nye had run the arbitrage desk at Goldman, so was well known to people at Goldman Sachs still was actively involved with trading with them. At the time that were good-sized players in what was then a small industry, Angela Gordon, Wiser Pratt. And I send letters, sit in people's offices sometimes, get thrown out of people's offices for not having an interview and being too persistent. That's all part of it.”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

15. “To paint a picture, put a mosaic together. And a lot of time was spent trying to make sure that the information you had was a unique source and it wasn't just a confirmatory thing that you're getting the same thing reported through different sources that ultimately lead to the same place and you're really only hearing the same thing over and over again. That was a key thing to learn is to be able to trace things back to kind of as much as possible first principles to understand is this really giving me something new? Is this confirmatory or is this just an echo of something I've already heard? And so that process, that training incredibly valuable for the financial markets, incredibly valuable for making decisions. And I loved it. And it was put into practice over a five-year period and had a big impact on me.”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

16. “Got into the Marine Corps, I managed to find a path to getting into intelligence right away. What was fascinating about the training was you learned how to take information from all sorts of different sources, some of its human intelligence, some of it would be satellite intelligence, some of it would be photographic, variety of different sources and methods that are used by the”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

17. “That this is what I wanted to do, and for the first time in my life, it sort of aligned. I was like, wow, I'm 30 years old. I have no idea what I want to do. Now I know what I want to do. It was kind of actually an exciting moment.”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

18. “What people's views were, collecting sentiment, and a variety of things in order to make the investment decision. At this time, I'd been out of the Marine Corps. I was probably 30 years old, 31 years old. And for the first time in my life, I had seen aspects of pretty much everything I had done up to that point. I'd been in the Marine Corps, I had done intelligence work. I had been to law school and was doing a lot of business school classes. I had studied economics and statistics when I was an undergraduate. And suddenly like all of these things came together in one thing with the promise that you can make money for yourself, for investors with much less correlation to whether markets go up and markets go down. It intrigued me. It was fascinating. And I knew instantly, and I tried to spend as much of my summer working with them as possible.”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

19. “and run by Eric Mindage and his team eventually a lot of them left to set up their own hedge fund and some of them went together some of them went off and did their own things but it was fascinating because I could see that there were legal and regulatory elements to some of the investments they were making there were obviously financial elements it was a largely hedge strategy both long and short There was also this element of collecting data, market information, intelligence”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

20. “And I convinced them during my second summer of law school to bring me in as a summer associate. I was told at the time that was the first time that Goldman had ever hired a Harvard Law student or any law student as a summer associate. It was supposed to be for business school students, but I managed to convince them that I had what they needed and had an interesting background for them. So anyway, they let me come in. I worked that summer in the equities division and that was meant to be a bit of a survey of everything that Goldman Sachs did with regard to stock markets. And I quickly found one particular desk at Goldman that was intriguing to me and it was the arbitrage desk. And that desk at the time was managed.”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

21. “So I didn't have a clear path into finance until I'd spent a summer working as a summer associate at Goldman Sachs at the time. I was at Harvard Law School and was cross enrolling into both MIT and Harvard's business school for financial classes that were going to be relevant to things I was interested in.”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source

22. “My guest on today's show is Reed Griffith, the co founder and chief investment officer of Tetragon and Polygon. Tetragon is a European listed public holding company with $38 billion in assets, comprised of $3 billion in direct investments on its balance sheet and $35 billion at TFG Asset Management, a subsidiary that backs external funds in an array of alternative strategies. Polygon is a $1 billion European event-driven hedge fund within Tetragon, the breed co-founded in 2002 and still serves as its portfolio manager. Our conversation covers Reed's path to investing and experience at hedge funds dating back to the early 1990s. We discussed the founding of Polygon and Tetragon, managing volatility and macro risk, event-driven investing, and TFG asset management's partnerships with managers”

    2022-10-17 · Capital Allocators · Reade Griffith – Managing Assets and Partnerships at Tetragon (Capital Allocators, EP.276) · IDENTIFIED FROM THE TRANSCRIPT · source