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Goldman Sachs Group Inc. is weighing plans for a new Florida hub to house one of its key divisions, in another potential blow to New York’s stature as the de facto home of the U.S. financial industry.
Executives have been scouting office locations in South Florida, speaking with local officials and exploring tax advantages as they consider creating a base there for its asset management arm, according to people with knowledge of the matter. The bank’s success in operating remotely during the pandemic has persuaded members of the leadership team that they can move more roles out of the New York area to save money.
Goldman may yet decide against centering asset management in Florida, where it would join a growing list of firms seeking tax and lifestyle advantages. It also may opt for another destination like Dallas, where it has been accelerating its expansion, the people said.
The deliberations at the Wall Street icon, often a trendsetter for the industry, adds to the cloud over New York’s future. As restaurants and stores fight to survive, the city is trying to stem the flight of white collar jobs to states with lax tax regimes and lower costs of living.
Manhattan now has the mostoffice space available since the aftermath of the Sept. 11 attacks. This time, the trend began even before the pandemic struck, with AllianceBernstein Holding LP shaking up city boosters in 2018 with plans tomove its headquarters to Nashville.
Inside Goldman, sentimental attachment to the city where it rose to prominence is taking a back seat to the company’s ambitious target unveiled early this year to cut $1.3 billion in costs, in part by shifting employees to cheaper locales. It’s unclear how many people could eventually go to Florida. In the last decade, Goldman has incrementally expanded offices in places like Dallas and Salt Lake City to thousands of jobs in an effort to trim expenses. The virus has cemented its resolve to accelerate that shift.
“We are executing on the strategy of locating more jobs in high-value locations throughout the U.S., but we have no specific plans to announce at this time,” a spokesman for Goldman Sachs said in an emailed statement.
The firm’s newly reconfigured asset-management division pulls in about $8 billion in annual revenue and is a critical pillar of Goldman’s plans to diversify its ways of making money. A decision to create a central location for the business in Florida would not only include back-office staff but also some investment professionals, two of the people said. The shift would be carried out over time.
Goldman has looked at potential office space in the corridor north of Miami that covers places like Palm Beach County and Fort Lauderdale, the people said.
Florida’s warm weather and lack of a state income tax have lured wealthy Americans for years. But money managers and other financial firms have been migrating there more recently to accommodate owners and top talent. The pandemic could accelerate the trend, with many New Yorkers already decamping to the Sunshine State as they wait for a vaccine in spacious homes with private pools.
Paul Singer’sElliott Management Corp. plans to move its headquarters to West Palm Beach from midtown Manhattan. Other investing powerhouses likeBlackstone Group Inc. and Ken Griffin’s Citadel have been bulking up their presence in the state.
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Goldman’s top competitors have flirted with the idea in the past.JPMorgan Chase & Co. CEO Jamie Dimon in 2013 praised Florida’s business-friendly policies and joked that he sometimes wonders aloud why the nation’s biggest bank doesn’t relocate to Miami. Executives at one pointfloated the possibility of moving the firm’s headquarters to the state, but dismissed the proposal over issues including the quality of Florida’s schools.
The coronavirus has stoked more serious conversation inside boardrooms, especially as executives fret about the new Democratic administration raising taxes and look to cut expenses to improve returns in an ailing economy.
— With assistance by Amanda L Gordon, Jonathan Levin, and Shahien Nasiripour
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