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. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

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!