What comes to mind when you think of Miami, Florida?
Beaches and sun, exciting nightlife, a popular Will Smith song. These are typical associations with Miami. How about finance? This might not be the first thought that comes to mind, but the city of Miami is hoping that will change. Miami is a major financial hub and growing, and according to the president of the Miami Finance Forum, it’s the second most concentrated financial hub behind New York City.
Currently home to over 60 international banks and 100 alternative investment companies, Miami and its busy Brickell Avenue has emerged as “Wall Street South,” and according to Forbes is luring many financial firms away from more traditional hubs such as New York and Greenwich, CT.
In 2013, the Miami Downtown Development Authority began an initiative to attract more hedge funds, investment firms, and family offices. In an effort to attract financial firms and encourage them to relocate or expand into the city, they have included one-on-one meetings and recruitment trips to the Northeast. The initiative is sparking interest, and inquiries into real estate are piling up. So why is the financial flock heading to Miami? Here are some of the key drivers we’re seeing:
Weather: The warm Florida weather is a natural attraction, and many fund managers often vacation and spend time in Florida during the winter months.
Location: The short distance between Miami and Latin America offers the perfect opportunity to expand into this emerging market. Latin America has a thriving investment community, and with direct flights to many Latin cities, Miami makes it easy to network and expand business opportunities.
Financial Incentives: Miami offers hedge funds and investment firms a variety of tax breaks including no individual income or estate taxes and only federal capital gains taxes.
Reduced Travel Costs: Many fund managers spend their winters traveling to investment conferences in the South. With permanent offices in Miami, managers can reap the benefits of reduced travel expenses.
At this point, all signs point to growth in Miami continuing for the financial industry.