Miami hopes to lure hedge funds out of New York with an updated twist on a familiar message: Come south for warm winters, zero state or city income tax and -- finally -- a downtown worthy of Wall Street’s elite.
“It’s really showing the maturity of our city,’’ said Nitin Motwani, a Miami developer and board member of the Downtown Development Authority. “The more people get familiar with what is happening in Miami — the real Miami — the more people are going to say, ‘I’m going to give Miami a shot.”
The campaign to woo hedge funds, private equity firms and other money managers by Miami’s DDA is the latest front in South Florida’s decades-long effort to move beyond its dependence on tourism, trade and construction to drive the economy.
The familiar trope of a year-round vacation looms large in the DDA’s message, as does comparing Florida’s lack of an income tax with the 13 percent levy paid by top-earning Manhattanites. But this campaign also rests on proving Miami’s bona fides for some of the wealthiest executives in finance. With a new wave of celebrated restaurants, a growing downtown cultural scene and an ongoing embrace of the “new Miami” by national media, the DDA sees an opportunity to make its message stick.
“You know what’s important to these guys? Where they go to lunch,’’ said Marc Sarnoff, the city commissioner who serves as DDA chairman. “Dinner means something to them. The symphony means something to them. Now, all of a sudden, you have a developed environment to satisfy these guys.”
The tax-funded DDA reserved about $50,000 for the “Finance Sector Initiative,” Sarnoff said. So far, that’s paid for Sarnoff, Motwani and the DDA executive managing the effort, Sonja Bogensperger, to travel to hedge-fund hotpots of New York and Greenwich, Conn., to host events. With the winter conference season beginning in South Florida, the DDA plans to host Miami events for visiting money managers, including a tour of the new Perez Art Museum opening downtown during the week of the Art Basel fair.
Organizers don’t expect a flood of relocations. The agency’s public relations firm, Schwartz Media Strategies, said it could not yet provide the name of a fund that has moved thanks to the effort, which is about six months old. An offer to give interested funds six months of free office space on Brickell Avenue was discontinued after no takers emerged.
“We think we’re just at the gaining-traction stage,’’ Sarnoff said.
A key part of the DDA campaign centers on Miami’s current finance sector, particularly its respectable core of hedge-fund notables. Last year, Eddie Lampert, a hedge-fund billionaire whose holdings helped make him the CEO of Sears, caused a stir by moving his official ESL fund headquarters out of Greenwich, Conn. and spending $38 million for a mansion in Indian Creek Village. (While ESL is officially based in Bay Harbor Islands, most of its staff remained with Greenwich firms working for ESL, according to a report by Hedge Fund Alert..) Mutual-fund heavyweight Bruce Berkowitz $10.5 billion Fairholme Capital Management has its headquarters in Miami and a staff of almost two dozen people.
Everest Capital, which manages an estimated $2.3 billion, has two offices: one in Miami, where it was founded, and the other in Singapore. Trivest and HIG, two prominent private-equity funds, also have headquarters in Miami.