Ken Griffin is a prominent financier. His estimated net worth is some $29 billion, according to Bloomberg. He is also a notable South Florida resident. In addition to a Palm Beach estate, he has committed some $100 million to assembling a private compound on ever-swank Star Island, near South Beach. It was only a matter of time before he moved his sizeable Chicago-based hedge fund and market-making businesses to the Sunshine State.
Citadel Capital and Citadel Securities are major players in the investment industry. They may together employ as many as 1,000 professionals. The news flow surrounding the move offered sharp contrast. Chicago is crime-ridden; Miami is an American paradise. Both views are overly-simplistic.
Assertions of runaway crime in Chicago may have to do with Griffin’s disdain for Illinois Governor Pritzker. They live at opposite ends of the political spectrum. Miami is a lifestyle city, but it conjures some of the most stratospheric rental prices in the country for single-family homes.
Miami certainly has come a long way in a generation. A major financial institution putting down roots here in the 1980s would have been unfathomable. As author Nicolas Griffin argues in his fast-paced book, “The Year of Dangerous Days,” Miami is a city that was built, well, on corruption and drug money.
You can be forgiven for not understanding Miami’s modern history. The city now glistens. Perhaps the collapse of the Miami Herald as a major national daily runs parallel in part to the evolution of Miami as a more mature, more stable, more comfortable city. For well-heeled professionals, the northern stretch of the metropolis toward distant Jupiter offers a meaningful work-life balance. Coral Gables and the southern reach are equally alluring. Verizon just named Palm Beach Gardens as one of the top-10 cities in America for small business success. There are no other East Coast cities on the list.
We of course welcome Citadel to the local financial-services community. No doubt myriad law firms and real-estate brokers feel the same. But Citadel is not the pioneer that some journalists would make it out to be. The true frontier capitalists may be the array of family offices, boutique asset managers, and regional brokers that have long considered the greater Miami area to be home. Those are the firms that make Miami more than just a convenient, if not exotic, place to hold a business conference in the thick of the winter months.
Our own commitment to South Florida was a result of the community’s deep connections into the Caribbean and Latin America. The concept is not original. Brickell Avenue is the de facto financial center for much of the region. Importantly, the pandemic may have afforded an opportunity for many Miami-based firms to reverse-engineer their businesses into the US hinterland. Remote work no longer offers the stigma that it once did.
The benefits of living in South Florida approach cliché. Yes, the state is business-friendly. Commercial taxes—direct and implied—are reasonable. Personal income taxes are non-existent. Other overhead is low, especially for routine requirements, such as clerical and back-office staffing. More selfishly, global transport links are strong. You cannot fly direct from Miami to Johannesburg, but how many times a year do you really need to make that sort of choice?
We like to think that the real reason firms want to move here—qualitatively—is that there is just a lot less noise and distraction than many Northern cities. In an industry, where clarity of thought offers an essential competitive advantage, there may be something to say about a streamlined commute or at-hand access to outdoor living. ■
Our Vantage Point: Miami has long been recognized as an emerging financial center. The city, though, has lacked the gravitas afforded by a critical mass of enterprise-level headquarters. The move by Citadel is an important milestone in South Florida’s ongoing, measured ascent as Wall Street South.
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