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California and New York Have Lost A Combined $2T As Some of the Biggest Firms In the World Flee to More Business Friendly Turf
Michael Campbell
10 Sep
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California and New York Have Lost A Combined $2T As Some of the Biggest Firms In the World Flee to More Business Friendly Turf
California and New York have never been the most ideal locations to run a multitrillion dollar company. High state and local taxes, laundry lists of laws, rules, and regulations, and the two states tout some of the most expensive real estate in the country. Nevertheless, for decades, they’ve been home to the biggest household names in business.
Tesla, Apple, and Google spawned from the California Coastline, and JP Morgan Chase, IBM and Verizon were all birthed in the Empire State.
The rich business history and ever present pool of premier talent has helped both California and New York maintain their stronghold on the larger tech, banking and finance firms. However that all changed throughout the pandemic. Those years of being on lockdown gave employers and their employees time to explore options elsewhere.
From the beginning of 2020 through the end of 2023, more than 370 investment companies, managing $2.7 trillion in assets, shifted their headquarters to a new state.
Florida welcomed the most new business. Icahn Capital, DoubleLine asset management, Cathie Wood’s ARK Investments, and Citadel, led by legendary investor Ken Griffin; they all opened up shop in the land of sunshine, palm trees, and 0% state income tax.
Texas and a few other Sun Belt hot spots were on the receiving end of a couple major California and New York transplants as well. North Carolina and Tennessee each brought in $600B in assets when AllianceBernstein made the move to Nashville from New York in 2021, and Allspring Global Investment relocated to Charlotte from San Francisco last year.
Albeit New York and and California remain atop of the food chain with more than $40 trillion of the nation’s assets under management, both states’ high wage earning work force has been bled. Upon relocating out of state, these firms brought with them more than 1,200 investment advisors to Texas, Tennessee took in over 1,000, and Florida soaked up nearly 500 traders, portfolio managers, and other top-level financial professionals. While some have been deterred by the controversial right-wing political views, thousands of ex-Californians and New Yorkers have managed to stomach their new Southern social norms.
If California and New York don’t act fast, they’ll continue to have their talent and tax revenues sapped by their coastal counterparts.
Quick Takeaways
California and New York Lost Nearly $3T In Assets Throughout the Pandemic
More Than 370 Investment Firms Moved Their Headquarters
Both States’ (California and New York) Have Now Lost Millions In Tax Revenues As High Wage Earners Continue to Relocate Elsewhere
On Another Note
✺ Better.com Stock Plummets 100% Post-IPO: Online mortgage lender Better Home & Finance made their public debut on the NASDAQ following a SPAC merger with Aurora Acquisition Corp. Pre-IPO the stock sat above $17, today their worth less than $1. — Yahoo!
✺ Canada Is Considering ‘Capping’ the Amount of Foreign Immigrant Students They Take In: Canada’s severe housing shortage has sent the country’s Housing Minister exploring for answers. One surprising solution that’s being proposed is a restriction on incoming foreign students. — BBC
✺ 13,000 Empty Apartments Sat Vacant for 2 Years In NYC: Despite the ever increasing need for affordable housing in one of the U.S.’s most populous cities, New York’s Independent Budget Office recently uncovered that more than 13,000 apartments sat empty throughout 2021 and ‘22. — Fox
✺ Housing Supply Is Shrinking: July marked a 13% drop in building permits. With developers bringing less inventory to market, the pipeline of housing supply is destined to run dry; leading to heightened demand and even higher home prices. — US Census
✺ Ohio Has the Hottest Housing Market In the Nation: Averaging only 13 days on market amidst one of the slowest buying seasons we’ve seen in years; Realtor.com ranked the 43230 Zip Code of Gahanna, Ohio - a small suburb immediately outside Columbus - as the hottest market int he nation. — Realtor
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