Florida's Financial Haven Tested by Hurricane Milton
By Suzanne McGee and Svea Herbst-Bayliss
(Reuters) – Florida's sun and low taxes have long attracted many hedge funds and finance professionals. However, Hurricane Milton, a Category 3 storm, is testing this allure. Despite the risk, many prominent fund managers are committed to staying in "Wall Street South".
Recent Moves to Florida
The state's appeal surged during the pandemic. Billionaire Carl Icahn relocated his firm from New York to Miami in 2020, while Paul Singer's Elliott Investment Management opened a West Palm Beach office. Ken Griffin's Citadel also moved to Miami from Chicago in 2022.
Hurricane Milton is projected to hit Florida's Gulf Coast, posing threats to communities still recovering from last month’s Hurricane Helene. The storm is expected to remain strong as it moves across the state, raising concerns about storm surge on the Atlantic Coast.
Jack Ablin, chief investment officer at Cresset Asset Management, reflected on his 2015 move to Palm Beach, stating he would remain in the area despite riding out the storm elsewhere. For many fund managers, the balance of advantages like lower taxes outweighs the potential costs of insurance and real estate damage.
Commitment Despite Risks
Big hedge funds remain dedicated to Florida. Executives who moved south during the pandemic plan to continue operating remotely for their Northeast firms. Major institutions like Goldman Sachs and JPMorgan Chase have increased their Florida staff to accommodate customers and employees.
Firms like Citadel, Elliott, and Icahn, based on Florida’s east coast, are drafting contingency plans. Citadel, committed to Florida, is developing a 54-story headquarters in Miami’s Brickell area.
Facing Hurricane Milton
Some firms lie directly in Milton's path. An $8 billion fund founder will stay in Florida during the storm while Raymond James Financial evacuated its St. Petersburg office staff but maintains operations via backup facilities.
Florida’s Blue Ocean Technologies can work remotely, having plans in place to ensure continuity.
Long-Term Concerns
There's apprehension among recruitment sources that the rising expenses and dangers in hurricane-prone areas may deter experienced financial professionals. Property premiums in Florida spiked 57% from 2019 to 2023, outpacing increases elsewhere.
Mel Montagne, president of a nonprofit advocating fairer insurance rates, noted rising nervousness among clients, including finance executives who relocated during COVID. “They are looking to sell to get the hell out of Dodge,” he said, reflecting concerns over their living conditions in the state.
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