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the NACUBO annual survey, endowment clients include Oberlin College. Griffin and Citadel's other professionals combined are significant investors in the funds.

INVESTMENT BANK ORGANIZATION

Like most of the other managers, Griffin does not agree with the hedge fund label. He described his firm as a financial institution, one that trades proprietary capital but is capitalized with outside investors as well. "We manage risk and provide liquidity. We are not a hedge fund. . . . We use our capital base to provide liquidity to capital markets and to absorb the risk of risky assets." He likens his organization to an investment bank in the early to mid-1990s. "Our goal is to find underpriced and mispriced assets and hedge away the risk. . . . We mitigate the macro risks that global macro managers take. We are the inverse of macro fund managers."

Over time, Citadel has methodically and strategically developed into a multistrategy investment firm that uses a variety of relative value, event-driven, and fundamental-based investment strategies. Relative value strategies, since inception and through today, have been Citadel's primary focus. Relative value strategies include convertible bonds, statistical equity, and fixed-income arbitrage. Mathematical and statistical techniques are used to identify sets of long and short positions to capture mispricing between different components.

Event-driven strategies are also an important part of Citadel's portfolio. These include corporate life cycle investing in which one looks for opportunities created by mergers and acquisitions, spin-offs, and recapitalizations.

"At Citadel, we have a team of specialists. We have different businesses—statistical arbitrage, merger arbitrage, fixed-income arbitrage, convertible arbitrage, and long/short equity. We have specialists in each business." Citadel's funds account for about 1 percent of total daily volume traded on both the New York Stock Exchange and Tokyo Stock Exchange.

The firm is always changing to reflect investment opportunities. "If you're not aware of product evolution, you can't survive in the long