Some fund managers can benefit from Florida’s lower operating costs and taxes and from the proximity to Latin American investors.
According to Thomas Belkin, vice president on the buy-side business development team at the Chicago offices of Eurex Exchange, not everybody travels to Florida only for leisure. \”Depending on the strategy type, years of trading track record, assets under management and other factors, certain investment managers will benefit more from the advantages found in Florida than others.
\”For example an emerging fund manager has high travel cost in order to build up its investor network and asset base. These expenses can outweigh easily the savings on taxes, office space and staff in Florida compared with NYC or Toronto, where managers can meet plenty of local investors. This may look different for midsize or large funds,\” Belkins said at the recent Opalesque Florida Roundtable.
Andrew H. Jacobus, President and CIO of investment advisory group FINSER International Group commented that Latin American investors visit Miami because it more accessible for them to conduct business with either investment advisors or fund managers. Belkin added that many South Americans visit Miami to boost their local businesses, particularly because there is a limited access to alternative investments in South America. In fact, he said, while Brazil is rich in natural resources, there are very few CTA strategies located in that country.
From Jacobus’ point of view, people in Latin America prefer to visit Miami because the environment and the language is closer to what they have at home, and the cost of doing business in Florida is also relatively attractive versus going to New York, where for some reason they might not have a direct flight to. He continued, \”There is also a perception that any broker-dealer or investment banker or fund manager in New York is way too expensive. So they would much rather see somebody here in Miami. From an operations perspective, it does not really matter where you are located. People can locate, call, email and communicate with you irrespective of where you are. But, for anyone coming from Latin America, if they want to see you, then Miami will be more advantageous.\”
The proximity of Miami to Latin America attracts hedge fund managers and family offices to set up satellite offices in the city, Julie Neitzel, a partner at Wealth Enterprise Family Offices noted. \”There are satellite offices here from both U.S. based or offshore managers,\” she added.