More Manhattanites relocated to Jersey City, Los Angeles, Philadelphia, Chicago and Hoboken, New Jersey, than they did to either Miami or Palm Beach. Except for Philadelphia, the other destinations are in some of the highest-taxed states.
While Elliott is moving its headquarters to Florida, founder Paul Singer is staying in the Northeast. New York will remain its biggest office and the firm’s new Greenwich, Connecticut, outpost will also be larger than the Florida hub, according to a person familiar with the plans.
The main drivers for people to stay in New York are access to top private schools and a bigger pool of young professionals to fill jobs, according to interviews with several hedge fund executives.
That’s similar to what AllianceBernstein Holding LP found when it decided to move its headquarters to Nashville from Manhattan in 2018. While more than 1,000 jobs at the $688 billion money manager are transferring out of the city, high-profile positions like private wealth and portfolio management stayed, a reflection of where the firm’s clients were.
Many executives resisted relocating themselves, according to one senior manager. Older employees who left Manhattan for Music City complained about uprooting their families, and finding high-quality talent proved much harder in Nashville, the person said.
A representative for the firm said AllianceBernstein is “pleased with our senior leadership located in Nashville” and lauded “the great local talent we have recruited.”
One hedge fund founder who spent the past six months in Miami is still deciding whether he’ll stay. The forces pulling him back are New York’s dynamism and his children’s school, which he likes better than the one they’re attending now. Either way, he’ll keep his New York office—because many of his employees with kids don’t want to leave—as well as his place in the Hamptons, because no one wants to be in South Florida in the summer.
Parents leaning toward staying in Florida are finding that many of the private schools are at or near capacity. Fanning Hearon, the head of Palm Beach Day Academy, said enrollment rose 22% to 480 students in the past 18 months, and some classes already have waiting lists. Other schools in the area report that they, too, have little room for more. Meanwhile, New York’s elite private schools said they’ve seen enrollment jump and few students leaving for Florida.
Cristobal Young, a sociology professor at Cornell University and author of “The Myth of Millionaire Tax Flight: How Place Still Matters for the Rich,” predicts that relocation will remain minimal because wealthy people generally stay put.
“They live where they became successful, where they have industry connections, employees and customers, and where they sit on nonprofit boards,” he said. Young, who has studied the effects of tax increases in California and New Jersey, said they barely caused an uptick in interstate migration, which stands at about 2.4% a year among U.S.-based millionaires.
Then there is the lure of New York as everything starts to reopen.
“It will be like the Roaring Twenties—you’ll see a resurgence here like never before,” said Mudrick, who predicts some of his friends who moved to Miami will soon be back. “You want to be buying New York and selling Florida—that’s the contrarian in me.”
—With assistance from Katia Porzecanski, Alex Tanzi and Sridhar Natarajan.
This article was provided by Bloomberg News.