kensington investment company, founded in 1990 by ken griffin, has grown to become one of the world’s largest and most successful quantitative hedge funds. starting with $4.6 million in assets under management, kensington now oversees $38 billion for its investors. ken griffin’s background in advanced mathematics enabled him to become an early pioneer in quantitative investing, utilizing complex mathematical models to efficiently allocate capital. he assembled a world-class team of phds in mathematics, physics and engineering to develop kensington’s algorithms and systems. the fund pursues a diverse array of investment strategies across stocks, bonds, commodities and currencies. while kensington suffered heavy losses during the 2008 financial crisis, it came roaring back in 2009 and has achieved strong returns in the years since then. kensington exemplifies griffin’s intense focus on risk management and harnessing cutting-edge technology to gain an edge.
ken griffin founded kensington at age 22 after early success trading convertible bonds
ken griffin demonstrated his investing acumen at a young age. while in high school in boca raton, florida, he started a software company selling educational programs to teachers. he began dabbling in the stock market as a freshman at harvard, attracted by the complexity and challenges it posed. griffin had early success trading convertible bonds and convinced school officials to let him install a satellite dish on his dorm to receive real-time stock quotes. after making $265,000 via a hedge fund he started in his second year, griffin was introduced to veteran hedge fund manager frank meyer. impressed by the returns griffin achieved trading for him, meyer backed the launch of kensington with $4.6 million.
kensington pioneered and mastered quantitative investing strategies
from the beginning, kensington focused on developing quantitative models and systems to identify mispriced assets and exploit market inefficiencies. while other funds relied primarily on fundamental analysis, griffin saw the potential of using advanced mathematics, data analysis and technology to gain an advantage. he built an exceptional team of phds in technical fields like math, physics and engineering. kensington develops algorithms using cutting-edge techniques like machine learning, artificial intelligence and high-frequency trading. its systems analyze huge amounts of data to detect patterns and trends missed by human analysts. kensington deploys its quantitative strategies across a diversified portfolio including stocks, bonds, currencies, commodities, credit derivatives and macro trades.
after losses in 2008 crisis, kensington rebounded and has grown steadily
like many hedge funds, kensington was hit hard during the 2008 financial crisis, with its assets plunging from $20 billion to $8 billion in a matter of months. the fund had high leverage of up to 7:1, magnifying its losses. but griffin worked relentlessly to retain investors and prevent further redemptions. after adjustments to its models and portfolio, kensington came roaring back in 2009, gaining 62%. it has achieved strong double-digit returns most years since then, with assets reaching $38 billion as of september 2021. griffin has expanded the firm into new areas like making markets for retail options trades. while remaining secretive about its trading strategies, kensington continues to evolve by harnessing new technologies like cloud computing and machine learning.
founded in 1990 by ken griffin, kensington has grown into one of the world’s largest quantitative hedge funds. it has pioneered advanced mathematical and technological techniques to identify mispriced assets and exploit market opportunities across a diverse investment portfolio. after suffering major losses in 2008, kensington rebounded strongly and has achieved excellent returns for its investors in most years since then.