Is New York Really the Hedge Fund Capital of the U.S.?

New York, hedge funds: In almost every financial circle, New York City is widely regarded as the hedge fund capital of the U.S. With pop culture references galore (we’re looking at you Wall Street, and more recently, Richard Gere’s Arbitrage), a middle class income range between $80,000 and $235,000 (in Manhattan), and the presence of nearly every major investment banking business, it’s hard to think otherwise.

So is New York really the hedge fund capital of the U.S.?

The data points to a resounding yes. According to a report earlier this year by FinAlternatives, it is found that “between 2009 and 2010, Manhattan accounted for…92% of hedge fund launches among new firms choosing between it, Greenwich, Conn., and Stamford, Conn.” Despite the availability of 21st century technology in the hands of every hedge fund manager and–more importantly–every potential investor, face-to-face contact is still king. According to that same article, it’s said that Bank of America’s prime brokerage unit “tells its hedge funds that being elsewhere could cost it between 10% and 20% of potential investor meetings.”

The Wall Street Journal also covered this phenomenon, pointing out that Chris Hentemann, who originally wanted to establish his hedge fund in Stamford, decided to move to Midtown Manhattan because, “There were enough roadblocks to establishing a new fund that [he] didn’t want to create another.” Hentemann also adds, “I can capture that investor that may not have made that trip up to Greenwich, but they had an opening in their schedule an hour before they had to go to JFK to go back to Europe.”

This brings up an important point about why New York City and specifically Manhattan is preferred by hedge funds: it’s an international transportation hub. NYC & Company determined back in 2011 that 50 million tourists visited the city, making it “the number one city destination and overseas destination for tourist spending in the United States,” according to official estimates.

Cities like Chicago and San Francisco get their fair share of tourists as well, but it’s clear that the ease of travel opportunities present in NYC in addition to the hub of banking activity makes it a perfect mecca.

Crispin Odey

Even Crispin Odey, who’s noted for focusing his business in London, recently told MoneyBeat that his fund is “mad we’ve never had an office there before,” adding that the $10 billion operation is opening a small office in the city.

We’ll see how small it stays in the next few years.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!