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Ken Griffin Moving Citadel From Chicago to Miami Following Crime Complaints

Ken Griffin, founder and CEO of Citadel, is ranked as the wealthiest resident of Illinois.
Photo: David Kasnic for The Wall Street Journal

Billionaire Ken Griffin is relocating his hedge-fund firm Citadel from Chicago to Miami, the third major employer to announce the move of a corporate headquarters from Illinois in the past two months.

In a letter to employees Thursday, Mr. Griffin said he had personally moved to Florida—a state that doesn’t collect personal income tax—and that his market-making business, Citadel Securities, would also transfer. He wrote that he views Florida as a better corporate environment and though he didn’t specifically cite crime as…

Billionaire

Ken Griffin
is relocating his hedge-fund firm Citadel from Chicago to Miami, the third major employer to announce the move of a corporate headquarters from Illinois in the past two months.

In a letter to employees Thursday, Mr. Griffin said he had personally moved to Florida—a state that doesn’t collect personal income tax—and that his market-making business, Citadel Securities, would also transfer. He wrote that he views Florida as a better corporate environment and though he didn’t specifically cite crime as a factor, company officials said it was a consideration.

Mr. Griffin has been the wealthiest resident of Illinois, so his departure will hurt state tax collections on both the individual and corporate side. It could also be a blow to Chicago’s philanthropic scene. Mr. Griffin has given more than $600 million in gifts to educational, cultural, medical and civic organizations in the area, spokesman Zia Ahmed said.

The 53-year-old has an estimated worth of $28.9 billion and is among the world’s top 50 wealthiest, according to the Bloomberg Billionaires Index. Late last year, he won a $43.2 million first-edition copy of the U.S. Constitution at auction and is putting it on display at public venues nationwide.

Mr. Griffin has also been active in making sizable donations to institutions including his alma mater, Harvard University, where he famously started his initial trading business in his freshman dorm room. He has broken records with his art and real-estate purchases, including a lavish compound in Florida that The Wall Street Journal previously reported made up part of a sprawling, $1 billion portfolio of residential real estate for Mr. Griffin.

A condominium building’s top four floors that Mr. Griffin spent more than $58 million to acquire several years ago—setting a record for the most expensive home ever bought in Chicago—will be put on the market, Mr. Ahmed said.

“Chicago will continue to be important to the future of Citadel, as many of our colleagues have deep ties to Illinois,” Mr. Griffin wrote. “Over the past year, however, many of our Chicago teams have asked to relocate to Miami, New York and our other offices around the world.”

The move is expected to be a multiyear process and will involve developer Sterling Bay and architecture firms to design a new office tower. There are currently about 1,000 employees in Chicago and many are expected to remain.

Citadel is one of the most successful hedge-fund firms, managing $51 billion in assets and consistently outpacing competitors via its multistrategy funds after surviving steep losses in the 2008 financial crisis.

Executives at Citadel estimated the value of the hedge-fund business alone was between $5 billion and $7 billion when it managed much less, the Journal reported in 2019. In January, Citadel Securities agreed to take its first outside investment in a deal valuing the electronic-trading operation at around $22 billion, a move seen at the time as a potential precursor to an initial public offering of the business.

Mr. Griffin and Illinois Gov.

J.B. Pritzker,
an heir to the
Hyatt
hotel fortune and the brother of former U.S. Commerce Secretary

Penny Pritzker,
have had a running feud in recent years, lately over rising violence in Chicago.

In an April interview with the Journal, Mr. Griffin suggested he might move his operations out of Illinois because of a rising crime rate and incidents involving employees in the state’s largest city.

“If people aren’t safe here, they’re not going to live here,” he said then. “I’ve had multiple colleagues mugged at gunpoint. I’ve had a colleague stabbed on the way to work. Countless issues of burglary. I mean, that’s a really difficult backdrop with which to draw talent to your city from.”

Caterpillar Inc.
said earlier this month it was moving from its longtime Illinois base to Texas. Manufacturers have increasingly turned to the Southwest as a destination for new factories, drawn by available space, appealing tax policies and an expanding technology workforce.

In May,
Boeing Co.
said it was moving its headquarters from Chicago to Arlington, Va., in order to be closer to top federal officials.

As part of plans to break up its business into three companies,

Kellogg Co.
said earlier this week that its global snacking business would be based in Chicago, with a second corporate campus in Battle Creek, Mich.

Citadel Securities has had a presence in Florida since March 2020, when employees started working from a high-end hotel there at the start of the Covid-19 pandemic. In his note to employees, Mr. Griffin said the new headquarters would be on Brickell Bay, “in the heart of Miami’s booming financial district.”

The decision makes Citadel the latest investment firm to move its headquarters or to open an office in a more tax-friendly jurisdiction during the pandemic, as quality-of-life factors took on new importance.

D1 Capital Partners, Elliott Management Corp. and Melvin Capital Management are among the firms that now have a presence in Florida, making it a new satellite of New York and Connecticut for the hedge-fund industry.

“Chicago has been a remarkable home for Citadel,” Mr. Griffin wrote. “I still remember the incredible civic pride and engagement when I arrived more than thirty years ago—and the outreach by business and political leaders who wanted us to succeed and be a part of the fabric of Chicago’s community.”

Emily Bittner, a spokeswoman for Mr. Pritzker, said that “countless companies are choosing Illinois as their home” and that the state had a record number of business startups in the past year.

“We will continue to welcome those businesses—including Kellogg, which just this week announced it is moving its largest headquarters to Illinois—and support emerging industries that are already creating good jobs and investing billions in Illinois, like data centers, electric vehicles and quantum computing,” Ms. Bittner said.

Chicago Mayor

Lori Lightfoot’s
media office said the departure was disappointing.

“We thank the Citadel team for their contributions to our city and their many philanthropic commitments, particularly around education, arts and culture and public safety,” the office said in a statement. “Our economic outlook has never been stronger and we will continue to build upon a best-in-class recovery in the nation amongst large U.S. cities.”

Data from the Chicago Police Department show that through June 19, murders are down 11% when compared with the same period a year earlier, while thefts are up 65%, motor-vehicle thefts up 40% and burglaries up 31%.

Through May 29, crime data in Miami shows murders are down 37.5% compared with the same period a year earlier, while robbery is up 50.8% and burglary is 73.2% higher.

Mr. Griffin has donated $50 million ahead of Tuesday’s Illinois primary to the campaign of

Richard Irvin,
a suburban Chicago mayor running for the Republican nomination for governor. He is also a major donor to efforts nationwide to try to help the GOP gain control of Congress in November and has been a significant contributor to Florida Gov.

Ron DeSantis,
a possible 2024 Republican presidential candidate.

Write to John McCormick at mccormick.john@wsj.com and Juliet Chung at juliet.chung@wsj.com

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