Friday, 12 February 2016
Last updated 12 min ago
Jan 28 2013 | 12:39pm ET
While New York may be irresistible to new hedge funds compared to nearby Greenwich, Conn., it's got nothing on southern Florida, according to one tabloid report.
Hedge funds are flocking to Palm Beach County, drawn by low tax rates and, of course, the weather, the New York Post reports. The county, located about 40 miles north of Miami, has recently opened an office charged with luring hedge funds down from New York.
"We're not doing a multi-million-dollar marketing campaign," Kelly Smallridge, head of the Palm Beach County Business Development Board, told the Post. "We don't need to. They're coming to us."
While The Wall Street Journal, like the Post owned by News Corp., focused, in an article earlier this month, on data that show the overwhelming majority of nascent hedge funds setting up shop in Manhattan, drawn by their ability to win more investor meetings in the central location than in the suburbs, the Post spoke primarily with a pair of hedge fund service providers.
"Florida is a state of choice," Apex Fund Services development chief Thalius Hecksher told the tabloid. "It's organically grown. There's no need to drag people down here. It's a zero income tax jurisdiction. And the lifestyle!"
"You weigh all of the benefits for being here to those in New York, and they outweight them every time," HedgeCo.net CEO Evan Rapoport, which is expanding in Palm Beach County, added.
"In our industry, the people we're talking about are $1 million-a-year earners. So when you're talking about tax rates, it's more meaningful."
Smallridge also cited the growing ability to work from anywhere due to technology.
Despite such bold talk, some 57% of North and South American hedge funds with at least $1 billion in assets are based in New York. Fellow high-tax jurisdictions Connecticut, Massachusetts, California, Illinois and New Jersey all top Florida, according to AR magazine, as do fellow low-tax jurisdiction Texas and Minnesota, and Brazil.
But the Post reports that inquiries to Smallridge's board have recently begun to pick up.
"The door was open because of the high-tax environment," Smallridge said. "Smaller companies were completely moving out. Larger ones, looking for expansion opportunities, wanted to expand here."