Carl Ichan isn't the only mogul moving to Florida for tax reasons.
According to Bloomberg, a flood of hedge funds are planning to expand their presence in the Sunshine State, as wealthy residents from northern states contend with the threat of higher taxes.
Paul Singer's Elliott Management Corp. is reportedly considering opening a Florida office, as is Chicago-based Balyasny Asset Management, which has approximately $8 billion in AUM and plans to open an outpost in MIami, according to people familiar with the matter.
Adding to the list of firms which have already made the move is Bluecrest Capital Management, which just opened a Miami office for approximately 10 portfolio managers. Notably, Miami is offering companies up to $50,000 if they relocate downtown and employ at least 10 high-wage workers as part of their "Follow the Sun" campaign.
The moves to Florida, which has no state income tax, come as locales with the highest number of hedge funds weigh tax increases on the rich. Last week, New Jersey adopted a millionaires tax, and a ballot measure in Illinois calls for raising taxes on the wealthy. New York Governor Andrew Cuomo has said such a tax could be possible if the U.S. government fails to step in with aid, and Connecticut’s legislature also has discussed a tax hike.
“Every firm like Elliott is in the process of evaluating choices in how and where they work, including working from home and opening additional offices, but Elliott has not made any decisions,” said Stephen Spruiell, a spokesman for the New York-based firm. -Bloomberg
According to Palm Beach Hedge Fund Association head David Goodboy, two or three hedge funds per week are asking him about making the move, vs. one or two per month during the normal times. 90% of them are from Manhattan and Greenwich, Connecticut - with popular destinations including Miami, Palm Beach and Boca Raton - the latter of which Verition Fund Management set up shop two years ago for a couple of portfolio managers.
In 2015, David Tepper moved from New Jersey to Miami, relocating Appaloosa Management there the following year.
As Bloomberg also notes, wealthy individuals have been drawn to Florida's favorable tax laws for years - with the GOP-backed 2017 law capping deductions for state and local taxes on federal returns undoubtedly contributing to newcomers. Meanwhile, real estate in Miami and Palm Beach has been on fire - with sellers deluged by offers.