Are Hedge Funds Flocking to Florida?

March 7, 2012 - PRLog -- The word on the street is that hedge funds are heading south. But are they?

More importantly, should they leave Wall Street behind?

Richard C. Wilson (of the Hedge Fund Group (http://hedgefundgroup.org/), Family Offices Group (http://familyofficesgroup.com/), and HedgeFundBlogger.com weighed in on the matter this week, telling StreetID that Florida would be wise to increase its presence in the hedge fund world.

“They are smart to do so,” said Wilson. “Many states are having to raise taxes, and if nationally there is a tax hike, hedge funds and traders will look for more efficient places to do business. Anyone who pays attention to and aggressively caters to the hedge fund community in a genuine way will be handsomely rewarded with more capital and business done in their state.”

Having built up HedgeFundBlogger.com and FamilyOfficesGroup.com as the number-one most visited websites in both the hedge fund and family office spaces, Wilson has become quite the expert at dissecting the hedge fund industry.

“I think that hedge funds are pretty mobile as a group,” he explained. “Many New Yorkers, for example, go to Florida or California or Texas for the nice weather and better standard of living. If Florida was ultra-aggressive, they would steal a lot of business and tax dollars away from the northeast for sure.”

But with a sizeable hedge fund market already in place, how important is Florida to the industry as a whole? “It is a top five area in the United States,” said Wilson. “Most people don't realize how large the industry is in Texas or California though – I think both beat out Florida.”

When asked about the areas that were poised to experience the most growth, Wilson pointed to Chicago and Boston, both of which contain “active hedge fund hubs,” he said.

“In terms of startups, I believe Boston for their consistent production of top financial talent from their schools,” said Wilson. “And Chicago for their never-ending supply of commodity traders.”

If you’re looking to find work at a hedge fund, however, you might want to go abroad. “I believe Zurich, Singapore, and Hong Kong are great places,” Wilson recommended. “The standard of living in such areas is great for the pay you receive versus some other global financial cities.”

Future Growth

Looking ahead, Wilson said that we can expect growth in “commodities, currencies, and places such as Singapore/Asia, South Africa/Nigeria, and Brazil.”

Whether hedge funds decide to pack up and move or stay where they are, Wilson believes that there is a “real lack of hedge fund marketing talent in the industry.”

“[There are] too many analysts and not enough long-term hedge fund business development career professionals, I believe,” he said. “Our firm is a bit unique in that we raise capital for $100M and $300M+ funds, but we only do so from our family office relationships, really – so we are very laser-focused on what family offices want to and don't want to invest in.”

As far as industry changes are concerned, Wilson told us that hedge funds are sometimes criticized for being conservative and not beating the marketplace, “where in 2008-2010 all of the talk was about how they were too risky.”

“In the end, I think more smart money is flowing towards hedge funds,” he said.

With regard to the new financial regulations and other changes on Wall Street, Wilson initially said that he had no comment. “The more things change, the more things stay the same,” he added. “The industry is competitive, the government doesn't really understand it very well, and more regulation pushes more business offshore in many cases.”

When asked if he thought any additional changes were in order, Wilson replied quite succinctly. “Not in the short-term,” he said.

Take Note, Struggling Hedge Fund Managers

During our discussion, I asked Wilson to provide StreetID with five tips for hedge fund managers who are struggling during these difficult economic times.


“Invest long-term in all parts of your business and that time horizon will show. If you play the game short-term nobody will invest.”
“Listen to investors very, very carefully; always take notes and respect their time and needs.”
“Build your team – all of your success is based on knowhow, knowledge, and connections, and all of that is based on your team.”
“Study capital raising, get capital raising talent inside of your team, [and] go to workshops and seminars on capital raising. Capital is the blood you need to do anything in this business.”
“Always stay hungry, humble, and smart.”


The 10-Year Plan

Wilson expects big things from the hedge fund industry over the next 5 – 10 years.

“[They will be] even stronger,” he said. “They evolve faster than any other type of financial organization and they are incentivized to succeed and not sit back and [wait] for a bubble to burst. When the last credit crisis came, hedge funds stepped in and started lending directly to real estate projects and businesses as banks had in the past. Hedge funds are here to stay and only growing more robust and diverse.”

Whether hedge funds move south or maintain their presence in the northeast anyone seeking a more substantial job on Wall Street should turn to: StreetID (http://streetid.com). StreetID is a financial career matchmaking site with a growing community (http://streetid.com/community) of financial professionals. With StreetID, current job seekers and those looking to move on in the future can sign up for a free account (http://streetid.com/signup/candidate) and make a direct connection with relevant candidates and employers.