Miami has really been ramping up its efforts to become a financial centre of late, and these are starting to really make a difference. As reported by Nicholas Nehamas (2015) of the Miami Herald, Miami is somewhat banking on its future as a financial hub. As Nehamas argues:
“Miami’s finance scene may never blossom into “Wall Street South” – but recent efforts to attract hedge funds and other investment firms to South Florida are starting to pay off.”
Tremendous growth has been seen in the finance industry in Miami, and there has been a lot of growth in particular in businesses that used to be “tangential parts of the industry”, according to Juan Carlos Campuzano, the president of Oberlin Wealth Partners.
It is hard to deny that Miami is a great place to live. It has excellent weather and a tax climate that is considered to be “favourable” for the wealthy. That has through recent history at least, led to its drawing in of wealth from other locations. It is also argued that the city’s “hot downtown” that has interesting culture and pleasant condos has had a role to play in drawing in people that are very wealthy.
It is reported on this note by Frances Aldrich Sevilla Sacasa, the CEO of the Miami operation for the Brazilian firm Itau Private bank that Miami has actually become a very important destination for those individuals of high net worth. In some cases these people choose to settle in Miami, and in other cases they may own a second or even a third home in the city. Alternatively they may just pass through. Either way, the presence, either permanent or temporary of this high worth individuals is also attracting those of lower echelons.
It is reported that in Miami traditional banking has been declining as a result of regulation and disclosure laws that impact clients from overseas. However, other types of finance have been picking up. In particular, private equity firms, investment banks and hedge funds have all been building up in Miami. One of the benefits for these firms of operating in Miami is the fact that there is an excellent support network of professionals to be relied on. For example, there are lots of accountants and law firms that all help to offer support.
Ian McCluskey, a vice president of Newlink Group which has recently begun a financial services practice in Miami has carried out some investigation into the number and extent of financial firms in the city. McCluskey has found that there are a total of 13 investment banks, 19 private equity firms, 60 hedge funds and 63 wealth management firms. That doesn’t even include the estimated 200 family offices that are private firms that take care of the management of money for one or more wealthy family. These figures were arrived at by reviewing private databases as well as through interviewing executives in the finance industry.
David Schwartz, the Chief Executive Officer of the Florida International Bankers Association is reported to attribute at least some of the growth to the closeness of Miami to Latin America. Schwartz stated that:
“Because of our proximity to Latin America, we are still the second-most important centre for international banking in the United States after New York.”
However, legislation has had an impact on that and has limited international business in Miami. Clients from Latin America are argued to be concerned about risks of information about them getting back to people in their home countries. This is one factor that is reported to have led to a drop in international clients for businesses. Additionally it is explained that three foreign banks have withdrawn from Miami in the past two years alone. These banks include BNP Paribas and the Royal Bank of Canada, as well as Lloyds.
Most people are encouraged by the changes, and excited that Miami is attracting smart and hard working people. It is perceived that this will have a knock on effect on other industries and that other people will benefit as a result. However, there is a need to keep attracting talent to Miami to support the growth in the financial sector there to support this too. No doubt if Miami keeps attracting people and organisations in the way that it is, that will happen.
HedgeThink.com is the fund industry’s leading news, research and analysis source for individual and institutional accredited investors and professionals
FAQs
Just click on any Miami Private Equity Firm below to be taken to their website for contacts and more information.
- 777 PARTNERS Miami, FL.
- BLD CAPITAL GROUP Miami, FL.
- BOYNE CAPITAL Miami, FL.
- CITO VENTURES Miami, FL.
- EVIDITY HEALTH CAPITAL Miami FL.
- H.I.G. PRIVATE EQUITY Miami, FL.
- INTEGRA INVESTMENTS Miami, FL.
The decision to relocate the hedge fund and Citadel Securities, the electronic trading firm, was motivated by Florida's business-friendly climate and tax advantages, and concerns about rising crime rates in Chicago, people familiar with his thinking said.
Who owns hedge funds? ›
Hedge fund management firms are often owned by their portfolio managers, who are therefore entitled to any profits that the business makes. As management fees are intended to cover the firm's operating costs, performance fees (and any excess management fees) are generally distributed to the firm's owners as profits.
What are the different types of hedge funds? ›
Types of Hedge Funds
- Event Driven Strategies. Major corporate events such as mergers, acquisitions and bankruptcies create a lot of movement in the stock market. ...
- Equity Arbitrage. ...
- Mortgage Arbitrage. ...
- Funds of Funds. ...
- Emerging Markets. ...
- Global Funds. ...
- Selecting a Fund. ...
- Authorship/Referencing - About the Author(s)
The number of active hedge fund managers headquartered in Florida grew from 193 at the end of 2019 to 290 this year, with those managers accounting for $94.2 billion in assets under management, according to data from Preqin.
Where do hedge fund managers live? ›
New York City, NY
The number one city for hedge fund jobs will come as no surprise. New York, New York has long been regarded as the financial and commercial capital of the United States. A city of over 8.3 million inhabitants, it is the home of more Fortune 500 companies than any other city in the U.S.
What companies are moving to Miami? ›
Other companies such as the likes of Oracle, Palantir, Hewlett Packard Enterprise. Even Reddit co-founder Alexis Ohanian made the move in 2017. With Shervin Pishevar, a venture capitalist, buying a house in 2018. Also, the founder of Shutterstock, Jonathan Oringer, made the move to Miami in late 2020.
Why are so many companies moving to Florida? ›
A Great Location For Business
The reasons Florida ranks so highly as a good environment for business include its pro-business policies and streamlined regulatory environment. The state offers incentives to attract all types of businesses, from corporate headquarters to manufacturing plants and service firms.
How many hedge funds have moved to Florida? ›
The number of Florida-based hedge funds has been steadily increasing over the past several years. There were 211 active hedge funds in Florida in 2019 and that number has now hit nearly 400 year-to-date, according to data from Preqin Pro.
Are hedge funds safe? ›
Risky investments.
Hedge funds engage in complex and risky investments, including options and derivatives. And they often use leverage or borrowing, which dramatically increases the risk of loss. Because of the enormous risks that hedge funds take, investors can lose their entire investment.
Yes, you could start with much less capital, or go through a hedge fund incubator, or use a “friends and family” approach, or target only high-net-worth individuals. But if you start with, say, $5 million, you will not have enough to pay yourself anything, hire others, or even cover administrative costs.
How do hedge funds make money? ›
Hedge fund makes money by charging a Management Fee and a Performance Fee. While these fees differ by fund, they typically run 2% and 20% of assets under management. Management Fees: This fee is calculated as a percentage of assets under management.
What hedge fund means? ›
Definition: Hedge fund is a private investment partnership and funds pool that uses varied and complex proprietary strategies and invests or trades in complex products, including listed and unlisted derivatives.
How do hedge funds work? ›
Hedge funds are financial partnerships that use pooled funds and employ different strategies to earn active returns for their investors. These funds may be managed aggressively or make use of derivatives and leverage to generate higher returns.
Where are hedge funds moving to in Florida? ›
GS announced its plans to move to South Florida in 2020. According to Bloomberg, the bank plans to move traders and senior executives to West Palm Beach in what would be a big shift for the financial industry.
Which hedge funds are moving to Florida? ›
Hedge fund Aurelius Capital Management has moved its headquarters to South Florida from New York, joining the wave of finance firms that have either relocated or expanded to the Sunshine State during the pandemic.
Is Citadel moving to Florida? ›
It was recently announced in the news media that billionaire Ken Griffin is moving his $50 billion, 1,000-person hedge fund and trading firm – Citadel Securities – from Chicago to Downtown Miami.
Who is the youngest hedge fund manager? ›
Again the youngest hedge fund manager on The Forbes 400 at 46-years-old, Chase Coleman is also this year's biggest gainer, with his net worth rising $3.4 billion.
Which city has the most hedge funds? ›
Over half of US-based funds of hedge funds are based in New York (Fig. 3), with the aggregate AUM of fund of funds managers headquartered in the state totalling $310bn.
Who is the richest hedge fund manager? ›
Tiger Global ended 2019 managing roughly $40 billion in assets. The richest hedge fund manager on the list is Jim Simons, a former math professor and the founder of quantitative trading firm Renaissance Technologies.
As the “gateway to Latin America,” it's no wonder more entrepreneurs from around the world are choosing to build and grow their businesses in Miami. Florida added 119,000 jobs in the tech and e-commerce industries between 2017 and 2021, and Miami startups raised close to $1 billion in venture funding in 2020 alone.
What are the top companies in Miami? ›
Top Private Employers
| Company | No. of Employees | Industry |
|---|
| University of Miami | 12,818 | Education |
| American Airlines | 11,031 | Aviation |
| Florida Power & Light Company | 3,011 | Utility |
| Carnival Cruise Lines | 3,500 | Hospitality and Tourism |
30 more rowsMiami, like Austin and Salt Lake City, burst onto the scene as a new potential tech hub amid the pandemic, as Silicon Valley workers began moving to the region due to its lax COVID restrictions and lower taxes.
Is Miami a growing city? ›
“Rents continue to increase the most in the Sun Belt metros, at an average growth rate of 22.5 percent Y/Y,” it reports, with Miami being the fastest growing market.
Is Florida a tech hub? ›
Florida solidified its standing as a national tech hub last year — adding more new companies in the sector than any other state.
Are big tech companies moving to Florida? ›
Driven by rising prices and unfavorable tax regulations, tech companies flocked to The Sunshine State, landing in cities like Miami, Orlando, and Jacksonville. According to the report, Florida added 2,715 tech businesses last year, placing ahead of previously known tech hubs like California and North Carolina.
Why are rich New Yorkers moving to Florida? ›
Florida became known as a safety haven for wealthy New Yorkers fleeing Covid which now seems like a permanent move as states including New Jersey and New York raise taxes on the wealthy.
Are financial firms moving to Florida? ›
Firms like Goldman Sachs, Tiger Global Management and D1 Capital Partners have all announced plans to move offices and executives to Florida in a rush to create a "Wall Street South."
Why do New Yorkers move to Florida? ›
Number one reason New Yorkers are moving to Florida every year is probably because of the better weather. But income tax also helps a lot. Florida residents do not pay state income tax. Taxes are charged mainly on consumption (you pay when you buy or sell a product or service).
Is Citadel moving to Florida? ›
It was recently announced in the news media that billionaire Ken Griffin is moving his $50 billion, 1,000-person hedge fund and trading firm – Citadel Securities – from Chicago to Downtown Miami.
