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It’s true, according to a county official, two hedge fund service providers based there and the New York Post.
An increasing number of financial firms, especially private equity and hedge funds, are fed up with New York’s sky-high city and state tax rates and are relocating to the business-friendly climate in Florida’s Palm Beach County.
And they’re being welcomed with open arms — officials in Palm Beach recently opened an entire office dedicated to luring finance hot shots down south.
But wait, you say: Didn’t another Rupert Murdoch newspaper recently tell me that all of the hot young hedge funds want to be in New York because lazy institutional investors aren’t interested in driving to Connecticut (or, presumably, flying to Florida) to meet with them? And wasn’t that story backed up with statistics and interviews with several actual hedge fund managers?
Yes. But listen instead to the anecdotal evidence offered up by the totally unbiased head of the Palm Beach County Development Board.
“We’re not doing a multimillion-dollar marketing campaign. We don’t need to,” said Kelly Smallridge, who heads the Palm Beach County Business Development Board, which set up the special unit to handle inquiries and marketing.
“They’re coming to us.”
Without warning, Smallridge said, her organization only recently started getting inundated with hedge-funders.
“The door was open because of the high-tax environment” in the New York area, Smallridge said.
Not convinced? Blinded by the fact that more billion-dollar hedge funds choose such high-tax homes as New York, Connecticut, Massachusetts, California, Illinois, New Jersey and Minnesota? Or that Texas seems a more popular home for hedge fund managers not interested in paying higher taxes? Or that Brazil is also home to more billion-dollar club members than the Sunshine State?
Well, yes, but, listen to the heads of a hedge fund administrator and a hedge fund database company, the Post responds. (An actual hedge fund manager recently relocated or relocating to Florida was apparently unavailable.)
“Florida is a state of choice,” said Thalius Hecksher, global development chief for Apex Fund Services, who moved many of his operations to Palm Beach. “It’s organically grown. There’s no need to drag people down here. It’s a zero-income-tax jurisdiction.”
“You weigh all of the benefits for being here to those in New York, and they outweigh them every time,” said Evan Rapoport, CEO of HedgeCo.net, which is expanding its presence in Palm Beach County….
“In our industry, the people we’re talking about are $1 million-a-year earners. So when you’re talking about tax rates, it’s more meaningful.”
“Then,” he said, echoing Hecksher, “there’s the lifestyle issue.”
I’m sure you’ve bought your plane ticket already. If you haven’t, the code for Palm Beach International is PBI. Daily flights from Kennedy, La Guardia and Newark available on JetBlue.
‘Wall St.’ flees NY for tax-free Fla. [N.Y. Post]