New York’s plan to tax out-of-state hedge fund managers is dead, at least for this year. Connecticut’s plan to try to lure New York-based hedge funds north of the border continues, regardless.
About 20 members of New York’s hedge fund community, representing about 15 firms, dined with Connecticut Gov. Jodi Rell in Darien. At the dinner, which was prompted by New York’s plan to tax the performance fees earned by hedge fund managers who work in New York but live in another state as ordinary income, Rell handed out a pamphlet entitled “Connecticut: The Wise Choice.”
The packet compared Connecticut’s tax regime with that proposed in New York—although that tax plan wound up not being adopted.
“The meeting was well-received, showed she is a friend of the industry, the border war debate aside,” New York Hedge Fund Roundtable president Timothy Selby told The Wall Street Journal. “This is the first time in a while that there has been some positive news about the industry.”
Rell brought along her lieutenant governor, Michael Fedele, Department of Economic and Community Development Commissioner Joan McDonald, and several members of Connecticut’s hedge fund industry, including John Brunjes of the Connecticut Hedge Fund Association.
In addition to Selby, the New Yorkers partaking in Rell’s filet mignon and crab cakes included JGB Capital, Acorn Derivatives and Taconic Capital.
While no one committed to quitting Manhattan for Mianus, JGB’s Brett Cohen said, “it’s nice to be wanted.”
“There’s a hostile atmosphere of continuing to tax the finance firm” in New York, he told the New York Post. “It’s nice when a governor of a state says welcoming things. It’s like a breath of fresh air.”
“We are just laying the groundwork now,” Robert Eick of the Connecticut Development Authority told the Post. “There are more discussions to be held.”