Another titan of Wall Street has opened a Florida beachfront office.
The latest large financial firm to establish itself in the Sunshine State is Appaloosa, the $18.6 billion hedge fund manager led by David Tepper. Appaloosa recently opened a small office on Washington Avenue in the heart of South Beach, the Miami area's flagship vacation destination, according to public securities filings made this month and to people familiar with the situation.
Tepper, 58, a former Goldman Sachs junk bond trader who is worth an estimated $11.6 billion according to Forbes magazine, already owns an apartment in Miami Beach, according to public records. The Miami Beach office will have no permanent employees, according to a person familiar with the situation, and will be used when Tepper and others at the firm are nearby. Tepper has relatives in the Miami area.
While Appaloosa’s Miami Beach office is small, the move is a win for the region's business development efforts. Palm Beach and Miami officials have aggressively courted U.S. Northeast-based financial firms for several years, recruiting them at industry conferences and taking them on local tours.
Nitin Motwani, a developer and board member of the Miami Downtown Development Authority, said the area’s educated workforce, cultural life, warm weather, low taxes and relatively cheap housing make Miami a desirable base.
“(Our) work to promote the city as a viable home for funds and their managers is gaining traction,” Motwani wrote in an email.
Large hedge fund firms that have already come to South Florida in recent years include Universa Investments and ESL Investments, which moved their headquarters from California and Connecticut, respectively. Affiliated Managers Group recently made West Palm Beach one of its two headquarters along with London. RWC Partners and SkyBridge Capital have opened secondary offices in the region.
Tepper is not the only financial tycoon to buy a Miami apartment. Luxury waterfront tower Faena House, for example, counts among its apartment owners Goldman Sachs Group Inc Chief Executive Lloyd Blankfein, Citadel's Ken Griffin, Apollo Global Management LLC's Leon Black and Brevan Howard Asset Management's Alan Howard, according to a CNBC.com report last year.
To be sure, only three of the 314 Americas-based hedge fund firms that manage at least $1 billion are headquartered in Florida, according to Absolute Return’s Billion Dollar Club ranking.
Appaloosa’s main office will remain in Short Hills, New Jersey, according to filings. Tepper also has homes in northern New Jersey and Sagaponack, part of the moneyed beach vacation area known as the Hamptons.
Appaloosa’s main hedge fund, which invests in stocks and bonds, had a strong year in 2015 as others suffered. It gained about 11 percent through October, according to a person familiar with the situation. The Absolute Return Composite index, which tracks all hedge fund strategies, fell 0.16 percent for the full year.
(Reporting by Lawrence Delevingne in New York; Editing by Christian Plumb and Matthew Lewis)