The 2008 recession was a devastating experience for most investors. Investors lost billions of dollars, and it has taken years for some of those investors to get their money back. A number of hedge fund managers saw an assortment of opportunities after the market crash, and they took advantage of those opportunities. Even though millions of people lost their jobs, homes and retirement funds during the recession, hedge fund managers were betting millions against the sub-prime housing market, and those hedge funds make billions in returns. That causes a major disconnect between Main Street Americans and Wall Street hedge fund managers. Some hedge fund managers did cross the line during that time, and they were convicted of inside trading or unethical conduct. But Ken Griffin the founder of Citadel LLC was not one of those hedge fund managers.
Mr. Griffin started Citadel in the 1990s after graduating from college. Griffin managed to turn Citadel into a major hedge fund management company before the market crash, but he couldn’t stop the blood bath that occurred after the crash. Griffin lost millions, and Citadel was a financial shipwreck. What Griffin decided to do next, changed his life and the lives of his investors. With borrowed money, Griffin invested in assets that other hedge funds rejected. They were too risky for some banks and pension funds, and even Griffin’s investors didn’t want him to invest in them, but he did. That decision turned the Citadel into one of the largest hedge fund management companies in the world, and it made Griffin billions of dollars.
Griffin was never accused of doing anything illegal. All he did was find alternative assets that no one else wanted, and he stayed with them until the market improved. He selected them because he believed in their value, and that’s what true hedge fund managers do. They see an opportunity and they take advantage of it even though their decision may not be the most popular decision in the business.
The non-investing public has always had a hard time understanding the nature of hedge funds. To them, hedge fund managers are greedy Wall Street investors that would do anything to make a dollar. Some hedge fund managers might be greedy people that would steal from the poor and put the money in their own pockets, but most hedge fund managers play by the rules and regulations. They serve a purpose in the investment world. They are an important tool for banks, pension funds and financially secure individuals.