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Florida is attracting a growing number of financial companies.
Photographer: Walter Bibikow / Stone / Getty Images
Photographer: Walter Bibikow / Stone / Getty Images
Goldman Sachs Group Inc. is evaluating plans for a new hub in Florida to house one of its key divisions, another potential blow to New York’s stature as the de facto headquarters of the US financial industry .
Executives searched for offices in South Florida, spoke with local officials and explored tax benefits as they considered building a base there for its asset management arm, according to people familiar with the matter. . The bank’s success in operating remotely during the pandemic has convinced members of the management team that they can move more roles out of the New York area to save money.
Goldman could yet decide not to focus asset management in Florida, where it would join a growing list of companies seeking tax and lifestyle benefits. It can also go to another destination like Dallas, where it is accelerating its expansion, the people said.
The deliberations of the Wall Street icon, often an industry pioneer, add to the cloud over New York’s future. As restaurants and shops struggle to survive, the city tries to stem the flight of white-collar jobs to states with lax tax regimes and lower cost of living.
Manhattan now has the most offices available since the aftermath of the September 11 attacks. This time around, the trend started even before the pandemic hit, with AllianceBernstein Holding LP rocking city boosters in 2018 with plans to move its headquarters to Nashville.
Within Goldman, the sentimental attachment to the city where it has established itself is taking a back seat to the company’s ambitious goal unveiled earlier this year of cutting costs by 1 , $ 3 billion, in part by moving employees to cheaper locations. It’s unclear how many people could possibly make it to Florida. Over the past decade, Goldman has gradually expanded its offices in places like Dallas and Salt Lake City to thousands of jobs in an effort to cut spending. The virus has solidified its resolve to accelerate this change.
“We are implementing the strategy of locating more jobs in high value locations across the United States, but we have no specific plans to announce at this time,” a Goldman spokesperson said. Sachs in an emailed statement.
The company’s recently reconfigured asset management division generates approximately $ 8 billion in annual revenue and is a critical pillar of Goldman’s plans to diversify its means of making money. A decision to create a central location for the business in Florida would involve not only back office staff but also some investment professionals, two people said. The change would be made over time.
Goldman has looked at potential office space in the north Miami corridor that covers places like Palm Beach County and Fort Lauderdale, the people said.
Hot Florida weather and the lack of an income tax attracted wealthy Americans for years. But fund managers and other financial firms have moved there more recently to welcome owners and top talent. The pandemic could accelerate the trend, with many New Yorkers already decamping to the Sunshine State awaiting a vaccine in spacious homes with private pools.
Paul singer Elliott Management Corp. plans to move its headquarters to West Palm Beach from midtown Manhattan. Other investment powers like Blackstone Group Inc. and Ken Griffin’s Citadel have strengthened their presence in the state.
Goldman’s main competitors have flirted with the idea in the past. In 2013, JPMorgan Chase & Co. CEO Jamie Dimon praised Florida’s pro-business policies and joked that he sometimes wondered aloud why the country’s largest bank wasn’t moving to Miami. Leaders at any given time raised the possibility of moving the company’s headquarters to the state, but rejected the proposal on issues such as the quality of Florida schools.
The coronavirus has fueled a more serious conversation in conference rooms, especially as executives worry about the new Democratic administration raising taxes and seeking to cut spending to improve returns in a struggling economy.
– With the help of Amanda L Gordon, Jonathan Levin and Shahien Nasiripour
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