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CNBC Exclusive: CNBC Transcript: Citadel Founder & CEO Ken Griffin Speaks with CNBC’s Kate Kelly on “Squawk on the Street” Today

WHEN: Today, Thursday, November 19th

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Citadel Founder & CEO Ken Griffin and CNBC's Kate Kelly on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) live from Citadel's headquarters in Chicago today. Video from the interview will be available on CNBC.com.

All references must be sourced to CNBC.

SARA EISEN: THE $25 BILLION HEDGE FUND COMPANY CITADEL IS ONE OF THE BIGGEST PLAYERS IN THE INDUSTRY. ITS FOUNDER AND CEO KEN GRIFFIN USUALLY ONLY SEEN PUBLICLY ON THE CONFERENCE CIRCUIT, BUT TODAY HE IS GIVING US HIS FIRST EVER TELEVISION INTERVIEW. OUR KATE KELLY IS LIVE WITH HIM IN THE COMPANY'S SUPER SECRET RISK CENTER IN CHICAGO. KATE, TAKE IT AWAY.

KATE KELLY: HEY, THANKS SO MUCH, SARA. WE'RE ON THE 37th FLOOR OF CITADEL'S CHICAGO BUILDING AND I AM SITTING WITH KEN GRIFFIN WHO RUNS THE $25 BILLION CITADEL HEDGE FUND FAMILY AS WELL AS A MARKET MAKING TRADING BUSINESS. KEN, IT'S A PLEASURE TO BE HERE WITH YOU. THANK YOU SO MUCH FOR DOING THIS WITH CNBC, AND LET ME GET RIGHT INTO IT. IT'S A LOUSY YEAR FOR HEDGE FUNDS. THE AVERAGE HEDGE FUND IS AT DEAD ZERO, THE MARKET IS UP ONE AND CHANGE PERCENT YET YOUR FLAGSHIP FUND IS UP OVER 12%. HOW DO YOU PULL IT OFF?

KEN GRIFFIN: WE'VE HAD A REALLY GOOD YEAR THIS YEAR ACROSS FRANKLY THE MAJORITY OF OUR BUSINESSES. IT'S BEEN A SOLID YEAR IN COMMODITIES, WE'VE HAD SUBSTANTIAL VOLATILITY IN THE COMMODITY COMPLEX THAT'S DONE WELL FOR OUR TEAM. OUR EQUITIES BUSINESS THIS YEAR HAS ANOTHER REALLY RESOUNDING YEAR OF PERFORMANCE COMING BEHIND REALLY PLEASED WITH HOW WE'VE DONE ACROSS A NUMBER OF THE DIFFERENT SECTORS WE INVEST IN. THE KEY TO OUR BUSINESS, IT'S A LOT OF RESEARCH. WE'LL DO ABOUT 15,000 MANAGEMENT MEETINGS THIS YEAR. SO WE'VE GOT A LOT OF PEOPLE ON THE GROUND TRYING TO UNDERSTAND WHAT'S CHANGED IN CORPORATE AMERICA, WHAT'S CHANGED IN CORPORATE EUROPE, WHERE ARE OPPORTUNITIES EMERGING ON THE BACK OF A SIGNIFICANT CHANGES WE ARE SEEING ACROSS THE WORLD.

KELLY: IT'S THAT SORT OF RESEARCH THAT FEEDS THE STRATEGY RIGHT BECAUSE THE MULTISTRAT FUNDS HAVE COMMODITIES, HAVE EQUITIES HAVE FIXED INCOME AND OTHER STRATEGIES EMBEDDED. TALK TO ME A LITTLE BIT ABOUT YOUR 25th ANNIVERSARY. IT HAPPENED EARLIER THIS MONTH AND THIS IS A COMPANY YOU FOUNDED IN YOUR DORM ROOM IN 1990 WITH CONVERTIBLE BOND TRADING. NOW YOU EMPLOY ALMOST 1,600 PEOPLE. LOOKING BACK, WHAT'S YOUR PHILOSOPHY ON HIRING AND RETENTION? HOW DO YOU KEEP TALENT AND FIND TALENT?

GRIFFIN: SO ONE OF THE GREAT ADVANTAGES THAT I HAD IN MY CAREER IS I STARTED TRADING 24 HOURS A DAY IN MY EARLY 20s, AND I HAD TO LEARN TO DELEGATE TO PEOPLE I HAD TO LEARN TO TRUST PEOPLE, AND I REALIZED THAT SUCCESS WAS GOING TO BE BORN IN HIRING REALLY BRIGHT PEOPLE, VERY SELF-MOTIVATED, VERY ABLE TO MAKE GOOD JUDGMENT CALLS DAY IN AND DAY OUT, AND IF YOU LOOK AT CITADEL TODAY, THAT'S REALLY THE FOUNDING PRINCIPLE OF THE FIRM IS A REAL PURSUIT OF TALENT, A PURSUIT OF PEOPLE WHO HAVE A PASSION FOR FINANCE, AND A PURSUIT OF INDIVIDUALS WHO MAKE GOOD DECISION DAY IN AND DAY OUT. WE'LL INTERVIEW 10,000 CANDIDATES THIS YEAR TO FILL 300 JOBS. SO A REALLY STRONG EMPHASIS HERE ON FINDING THE BEST AND BRIGHTEST IN OUR MARKETS.

KELLY: THAT SOUNDS ALMOST HARDER THAN GETTING INTO HARVARD. HOW DOES THE UPSIDE COMPARE?

GRIFFIN: I THINK HARVARD IS A BIT EASIER TO GET INTO. I THINK THE UPSIDE AT CITADEL IS A BIT BETTER.

KELLY: INTERESTING. YOU FOUNDED ONE AND YOU WENT TO THE OTHER. REPORTEDLY YOU'RE CONSIDERING AN INITIAL PUBLIC OFFERING. WE HAVE SOME INTERESTING IPOs IN THE MARKET TODAY, DIFFERENT SPACE OBVIOUSLY. ARE YOU GOING TO DO IT?

GRIFFIN: THIS HAS BEEN RUMORED FOR ALMOST A DECADE. THERE WILL COME A TIME AND PLACE IT WILL BE APPRPRIATE FOR US TO CONSIDER GOING PUBLIC. THAT TIME IS NOT NOW.

KELLY: WHAT ABOUT IN THE NEXT COUPLE YEARS?

GRIFFIN: ANYTHING COULD HAPPEN IN THE NEXT COUPLE YEARS SO I WOULDN'T TAKE IT OFF THE TABLE BUT IT'S NOT FRONT OF MIND BY ANY STRETCH OF THE IMAGINATION.

KELLY: THE WORLD HAS REALLY BEEN ROILED IN THE LAST WEEK BY THE TERROR ATTACKS IN PARIS. AS AN INVESTOR, HOW DO YOU PUT THIS INTO A BROADER CONTEXT? WHAT DOES IT MEAN FOR THE EU? WHAT DOES IT MEAN FOR THE WORLD BEYOND THE EU?

GRIFFIN: I THINK THAT'S THE RIGHT WAY TO FRAME IT. IT'S HOW DO YOU THINK ABOUT THIS NOT FROM WHERE SHOULD THE TEN-YEAR BOND GO OR WHAT SHOULD IT MEAN FOR EQUITIES TOMORROW? THIS IS A MUCH MORE FUNDAMENTALLY CHALLENGING PROBLEM FOR EUROPE IN THAT WE NOW HAVE ON THE GROUND OF EUROPE A SIGNIFICANT TERRORIST INCIDENT DRIVEN BY WHAT APPEARS TO BE MIDDLE EASTERN TERRORISTS. WITH EUROPE OPENING ITS BORDERS TO ROUGHLY 4 MILLION OR 5 MILLION IMMIGRANTS SEEKING POLITICAL ASYLUM, THERE'S A MATERIAL RISK THAT EUROPE WILL SEE MORE EVENTS SUCH AS THIS AND I THINK IT'S GOING TO DRIVE A REAL DEBATE AROUND HOW POROUS SHOULD EUROPE'S BORDERS BE AND WHAT IS THE COMMITMENT OF THE EUROPEAN CITIZENS AND THE EUROPEAN GOVERNMENTS TO THE EUROPEAN UNION AS A WHOLE. SHOULD GERMANY DEFINIE THE IMMIGRATION POLICY FOR EVERY COUNTRY ACROSS EUROPE. THAT'S GOING TO BE A QUESTION THAT WE ARE GOING TO SEE COME TO A HEAD IN THE MONTHS AHEAD.

KELLY: WHAT ABOUT HERE AT HOME MARKETS WIDELY EXPECTING TO SEE A FED RATE HIKE IN DECEMBER. 68% I THINK ACCORDING TO THE FUTURES MARKET LIKELIHOOD. SHOULD THEY DO IT?

GRIFFIN: SO IT IS COMPLETELY UP TO THE FED IN EVERY SENSE OF THE WORD. UNEMPLOYMENT NOW HEADING RIGHT AROUND 5% FOR COLLEGE EDUCATED WORKERS WE'RE IN A FULL ROBUST EMPLOYMENT ECONOMY. THE FED HAS TO BALANCE THAT WITH THE REALITY THAT FOR THOSE THAT DON'T HAVE A COLLEGE DEGREE, THE LABOR MARKET IS STILL DIFFICULT. WE ARE NOT SEEING WAGE GROWTH IN THE LESS SKILLED PART OF OUR WORK FORCE. LOW INFLATION GIVES THE FED THE DEGREE OF FREEDOM TO MAKE IT A DECISION IN DECEMBER HOWEVER THEY SO CHOOSE – I THINK THEY'RE GOING TO MOVE, BUT THEY CERTAINLY DON'T HAVE TO.

KELLY: AND ARE YOU WORRIED ABOUT WHAT HAPPENS IF THEY HAVE TO RETHINK THAT DECISION LATER?

GRIFFIN: YOU KNOW, IF WE HAVE TO HEAD BACK TOWARDS ZERO, THAT MEANS THAT SOME EXOGENOUS SHOCK HAS TAKEN PLACE, OR THE ECONOMY IS SHOCKINGLY TURNED SOUTH. AND I THINK THAT IF THAT WERE TO HAPPEN, I THINK THAT WOULD BE A CAUSE FOR CONCERN BECAUSE IT WILL BE PERCEIVED THE FED HAS FEWER DEGREES OF FREEDOM TO REIGNITE GROWTH. SO I THINK ONE OF THE REASONS THE FED HAS WAITED SO LONG TO RAISE RATES THUS FAR IS TO COMBAT THAT VERY CONCERN.

KELLY: LET'S TALK ABOUT SOME OTHER MARKETS. YOU'RE ACTIVE PERSONALLY IN BOTH ART AND REAL ESTATE. YOU RECENTLY SET SOME RESIDENTIAL PROPERTY SALES RECORDS IN THREE CITIES – MIAMI, CHICAGO, NEW YORK. WHAT IS YOUR PHILOSOPHY ON REAL ESTATE INVESTING AND ART INVESTING? WHY IS IT IMPORTANT? WHY IS IT VALUABLE OVER THE LONG TERM?

GRIFFIN: SO I THINK THAT HIGH-END REAL ESTATE HAS A VERY DIFFERENT MEANING THAN THE TYPICAL HOUSE IN AMERICA, WHICH IS A HUGE PART OF ANY FAMILY'S SAVINGS. IN THE HIGH-END REAL ESTATE MARKET, THERE IS AN ELEMENT OF CONSUMPTION. AND THAT IS DIFFERENT THAN JUST INVESTING. SO I THINK THAT ONE MUST KEEP THAT IN MIND, THAT WHEN PEOPLE MAKE A DECISION TO BUY A PIECE OF HIGH-END REAL ESTATE, IT'S NOT JUST AN INVESTMENT. IT IS WHERE THEY SPEND TIME WITH THEIR FAMILY AND LOVED ONES. THE ART MARKET, THE ART MARKET IS NOW VIEWED AS A MARKET. WHEN I STARTED COLLECTING ART 20 YEARS AGO, IT WAS REALLY A MARKET DOMINATED BY COLLECTORS. AND TODAY, WE'RE SEEING FAR MORE PEOPLE PURSUING ART AS AN INVESTMENT. I WOULD HAVE SOME CAUSE FOR CONCERN AROUND THAT. WE'VE SEEN THE ART MARKET, WE'RE SEEING THE TIER ONE ARTISTS WITH THEIR BEST WORKS SETTING ALL-TIME RECORD HIGHS. THE MODIGLIANI SOLD LAST WEEK FOR $170 MILLION. BUT WE'RE SEEING SECOND TIER ARTISTS AND SECOND TIER WORKS BY THE BEST ARTISTS STARTING TO SLIDE DOWN IN PRICE. I THINK PEOPLE SHOULD BE VERY HESITANT IN THINKING ABOUT ART AS AN INVESTMENT.

KELLY: WOULD YOU RATHER OWN A PRESTIGE PROPERTY ON THE OCEANFRONT IN MIAMI OR PRECIOUS METAL GOLD?

GRIFFIN: PERSONALLY, I WOULD MUCH RATHER BE IN MIAMI. WE ONLY LIVE ONCE. THE GOLD IS GOING TO SIT IN A SAFE, AND WHAT'S THAT GOING TO DO FOR YOU?

KELLY: OK. PAUL TUDOR JONES, HEDGE FUND MANAGER, ONCE FAMOUSLY SAID THAT NEW MOTHERS CAN'T FOCUS ON TRADING. SO I GUESS BY THAT LOGIC IT'S A GOOD THING I DON'T MAKE MY LIVING THAT WAY. HE ALSO SAID HE REDEEMS MONEY FROM MALE MONEY MANAGERS WHEN THEY'RE GOING THROUGH A DIVORCE. YOU RECENTLY SETTLED A FAIRLY HIGH PROFILE DIVORCE. HOW DID IT AFFECT YOU AS CEO OF THIS BUSINESS?

GRIFFIN: WELL YOU KNOW, OBVIOUSLY THERE'S AN EMOTIONAL DYNAMIC AT PLAY WHEN YOU ARE GOING THROUGH THE END OF A VERY IMPORTANT RELATIONSHIP. AND FOR ME, MY CHILDREN WERE REALLY THE FOCUS OF MY ATTENTION. OUR THREE CHILDREN, I LOVE THEM DEARLY, WANTED TO MAKE SURE THAT THIS WENT AS SMOOTHLY AS POSSIBLE TO PROTECT THEIR INTERESTS. AND NOW THAT IT'S RESOLVED AND BEHIND US, I'M REALLY HAPPY MY CHILDREN ARE DOING AS WELL AS THEY ARE.

KELLY: OK. LET'S TALK POLITICS FOR A SECOND. YOU'VE BEEN ACTIVE OVER THE YEARS POLITICALLY ON BOTH SIDES OF THE AISLE. ALTHOUGH YOU FAVORED SOME REPUBLICAN PRESIDENTIAL CANDIDATES. IN THE MOST RECENT CYCLE, YOU DONATED TO THE PACS FOR SCOTT WALKER, NOW OUT OF THE RACE. ALSO, MARCO RUBIO AND JEB BUSH. WHO WILL YOU – OR AT LEAST, WHO ARE YOU LEANING TOWARDS EXCLUSIVELY BACKING FOR PRESIDENT?

GRIFFIN: WELL, YOU KNOW, I THINK YOU LISTED THE THREE CANDIDATES THAT I'VE HAD THE MOST INTEREST IN. SCOTT WALKER IN WISCONSIN HAS BEEN JUST AN ABSOLUTE CHAMPION OF FREE MARKETS AND A CHAMPION OF SMALLER GOVERNMENT. AND THOSE ARE THINGS THAT ARE REALLY IMPORTANT TO ME. I THINK THAT FREEDOM OF SPEECH, FREEDOM OF RELIGION, THE FREEDOM TO PURSUE YOUR CAREER AS YOU SO CHOOSE, THOSE ARE FUNDAMENTAL CORE VALUES IN AMERICA. AND ALL THREE OF THESE CANDIDATES SHARE THOSE VALUES. NOW, WALKER IS IMPORTANT TO ME BECAUSE WE LIVE IN ILLINOIS, WHICH IS ECONOMICALLY DEPRESSED DUE TO AN OVERREACHING GOVERNMENT THAT CAN'T CONTROL ITS SPENDING. LOOKING AT THE NATIONAL STAGE, JEB BUSH, MARCO RUBIO, BOTH OUTSTANDING CANDIDATES FOR PRESIDENT. BOTH WOULD BE, I THINK, GREAT LEADERS FOR OUR NATION. REALLY EXCITED TO PICK ONE OF THESE TWO MEN TO GET BEHIND IN THE WEEKS AHEAD.

KELLY: JEB BUSH HAS REALLY SLIPPED IN THE POLLS AS YOU KNOW. CAN HE WIN?

GRIFFIN: YOU KNOW, IF JEB BUSH BRINGS HIS A-GAME TO THE TABLE, HE CAN WIN. IN FLORIDA AS GOVERNOR HE HAD AN OUTSTANDING TRACK RECORD. FOCUSED ON EDUCATION, FOCUSED ON BALANCING THE BUDGET, FOCUSED ON MAKING THE STATE A REAL DRAW FOR CAPITAL AND PEOPLE.

KELLY: SO AS YOU THINK FORWARD TO THE NEXT 25 YEARS, WHAT'S NEXT FOR CITADEL? WHAT ARE THE PRIORITIES?

GRIFFIN: YOU KNOW, IF I LOOK AT WHERE WE ARE TODAY, WE'RE THE LARGEST MARKET MAKER IN EQUITIES AROUND THE WORLD. THAT'S AN INCREDIBLE PLATFORM FOR US TO BUILD, BUT WOULD BE I BELIEVE ONE OF THE GREAT SECURITIES DEALERS OF THE NEXT 25 YEARS. AND WITHIN OUR HEDGE FUND, WE HAVE ENJOYED 25 YEARS OF STRONG GROWTH. AND IF I LOOK AT THE TALENT WE HAVE TODAY, I LOOK AT THE AMBITION OF MY TEAM MEMBERS, BECAUSE THIS REALLY IS A TEAM EFFORT. I AM REALLY IMPRESSED WITH WHERE WE THINK WE ARE GOING TO TAKE THIS FIRM OVER THE NEXT 25 YEARS, WHICH IS TO BE A LEADER IN INVESTING ACROSS EACH OF THE STRATEGIES WHERE WE ENGAGE TODAY AND THEN ADDING SOME NEW STRATEGIES TO THE MIX OVER TIME. REAL FOCUS HERE, THOUGH, ON DEPTH, NOT BREADTH. WE THINK THAT EXCELLENCE IN INVESTING COMES FROM FOCUS.

KELLY: KEN GRIFFIN, THANK YOU SO MUCH FOR DOING THIS TELEVISION INTERVIEW WITH US. IT WAS AN HONOR. SARA AND THE GANG, BACK TO YOU, GUYS.

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