Elliott Management, the $41bn hedge fund founded by Paul Singer, will move its headquarters from New York to Florida, dealing a blow to the city as it seeks to prevent a corporate exodus during the coronavirus pandemic.

The decision to shift its base from midtown Manhattan to West Palm Beach, Florida, came after the group had opened facilities in Greenwich, Connecticut, and Florida to make it easier for employees to work from home, according to a person familiar with the matter.

Elliott, which did not anticipate asking workers back to the office until next summer, expects that “hundreds” of its employees will remain in New York.

Mr Singer is expected to continue to work in the New York area, while Jonathan Pollack, Elliott’s co-chief executive, will be based in Florida, where he has a home and has been living during the pandemic

Florida has increasingly become an attractive base for money managers as it does not have a state income tax. Residents of New York City face both state and city income tax.

Bloomberg News first reported the relocation of Elliott’s headquarters.

Elliott has just under 500 employees and offices in New York, London, Tokyo, Hong Kong and northern California. It would keep most but not all its office space at its 57th Street location in Manhattan, said a person familiar with the matter.

New York civic and business leaders have become increasingly concerned about high-profile employers leaving the city as the pandemic prevents large in-person gatherings and employees adjust to remote working.

Still, Wall Street banks and investment groups such as Blackstone have slowly begun asking employees to return to the office in the hopes of sparking creativity and team bonding.

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Before the pandemic, Carl Icahn had moved his group to Florida. Hedge fund billionaire David Tepper had moved to Florida but then moved back to his home state of New Jersey.

New York is not the only high-cost state facing potential migration of investment groups. Los Angeles-based Canyon Capital is considering leaving California for Texas according to news reports.

Elliott is best-known for its aggressive activist investing group as well as being one of the most successful distressed debt investors in the world.

Via Financial Times