Page 141

has shrunk. The emergence of the euro and the emergence of a single euro yield curve have further exacerbated the situation. However, Griffin believes that global macro will persist as a strategy—though it will be much more challenging.

Griffin also believes the hedge fund industry is immature in its response to institutional needs—from a transparency and business conduct point of view.

Griffin says the distinction between old and new generation is not clear-cut. However, a firm's comfort level with technology, quantitativeness, and information technology is telling and may be generational. Those managers who are under 40 years old seem more at ease in utilizing and integrating new technology into their businesses. Griffin observes that options pricing classes did not exist in colleges until the 1980s. The educational and technological environment has changed drastically since then. He also observes that it was the rapid adoption of technology that gave Salomon Brothers the edge in the 1980s and 1990s.

Succession planning? Griffin observes that most of the successful hedge fund management firms were built after a successful Wall Street career. How to capture an exit value or develop succession planning wasn't considered or even viewed as part of the process. Now these managers, late in their careers, are faced with issues they have spent little time contemplating. At Citadel, in contrast, a great deal of emphasis is placed on career development and grooming people for the next step.