Where have all the Miami portfolio managers gone?
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Go to Miami, they said. It's "Wall Street South," they said.
Since the early days of the pandemic, the 305 has been pitched as the "new" Wall Street. Warm weather and low taxes! What's not to love?
But "Wall Street South" hasn't really materialized, despite hedge funds touting big investments in the city. BI's Bradley Saacks has the numbers to prove it.
Last year, eight of the world's largest hedge funds had 218 investment professionals in Miami, according to public filings. A year later, that number dropped by 20, even as firms increased their investing head count by more than 11%.
So as hedge funds bulk up, Miami isn't where they're sending their money-makers.
This isn't Miami's obituary.
The city has become a hot spot for the world's richest people looking to escape a potential California wealth tax.
Some Wall Street firms still have big plans for South Beach. Citadel has been headquartered there since 2022 and is building a 58-story tower. A person close to the $19 billion hedge fund Schonfeld told Bradley its Miami presence has grown year over year.
But Bradley's story highlights that funds' key employees — the ones deciding where to invest — aren't taking their talents to South Beach.
(No disrespect to the middle- and back-office workers, the unsung heroes. After all, if a trade doesn't reconcile, did it even happen?)
Much of that front-office hesitancy stems from a lack of critical mass.
"There wasn't enough flow," one hedge-fund manager, who started his firm in Florida but relocated to New York, recently told Bradley.
That's a tough reputation to shake. Young, ambitious financiers are less likely to take a chance on Miami if the action is still up north.
Being in a financial hub isn't a prerequisite for success. Renaissance Technologies, historically one of the top-performing hedge funds in the world, has done just fine on the eastern end of Long Island. (That may not sound far from NYC, but the Long Island Expressway takes no prisoners.) Still, proximity to the power brokers certainly helps.
As for Miami, instead of constantly pegging it as the next Wall Street (or any industry), maybe it's time to recognize it as something else entirely. Whatever that may be.