“There’s a growing ecosystem. That’s wt is exciting,’’ said Julie Neitzel, a partner at WE Family Offices, a Miami firm that manages investments for families with assets of at least $50 million. She said she measures progress when it comes time to fill a position in WE’s 40-person office. “Five years ago, it was really hard to find good talent here.”
New York remains the undisputed center of the hedge-fund universe. Chicago, Boston, Connecticut and San Francisco are among the notable outposts. Each of those cities is home to at least one firm listed in The Hedge Fund Journal’s list of the top 50 fund managers in the country. ESL snagged No. 34 on the list with $11 billion under management, but the company was still listed as being from Greenwich, Conn.. No South Florida address made the roster.
Josh Gelfman, who left New York City’s economic development arm to fill a new economic-development post created by Miami-Dade Mayor Carlos Gimenez, said Miami offers a good value for hedge-fund managers. But he warned they have limitless options when deciding to move.
“I think it’s an incredibly competitive challenge,’’ Gelfman said of the DDA campaign. “You’re talking about folks who can operate anywhere in the world.”
Financial executives say a natural growth spot for the city’s financial sector are satellite offices by funds who want a Miami base to meet with Latin American clients. Still, in a recent presentation by Motwani and Sarnoff to local fund managers, there was little talk of Miami’s familiar role as the “Gateway to the Americas,’’ a common selling point for economic development.
That hints at another aim behind the hedge-fund push: while Miami already serves as a financial capital of Latin America, the DDA campaign could boost the city’s profile as a finance hub for the United States.
“I thought we would be much more dependent on Latin America” in making the pitch to hedge funds, Sarnoff said. “When you get around these guys, it’s not that at all. You hear a lot about Miami being an alternative to New York.”
James Varnadoe, managing director of Miami’s KVR Trade Finance, which provides loans for importers and exporters, said the campaign’s success may depend on how comfortable hedge-fund managers feel about the social scene in Miami.
“In New York, if you talk to the hedge funds, they want a social environment where they can talk to other hedge-fund managers,’’ said Varnadoe, who is also a board member of the Miami Finance Forum. “I think there’s enough hedge-fund and private-equity guys to start that.”
As with most economic-development programs, it’s hard to sort success from relocations that would have happened anyway. Sarnoff said one hedge fund from California, which he would not name, is in the midst of moving to Miami.
The firm has rented space in Coconut Grove’s SBS office building, Sarnoff said. The firm plans to employ 25 people with an average yearly salary of $100,000, according to county documents. Miami-Dade commissioners granted the unnamed firm $63,000 in state and local incentives tied to future job creation. (County procedures call for the firm to be made public once the deal is exercised.)