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New York’s hold on finance and investing jobs keeps slipping.
On Tuesday, word began leaking in both Manhattan and Nashville, Tennessee, that AllianceBernstein Holding plans to relocate its headquarters from the city known for Broadway shows to one more famous for country music.
The firm’s senior leaders including Chief Executive Officer Seth Bernstein will move, according to the Wall Street Journal. And they may be joined by more than 1 000 staff, the Nashville Post reported.
Even as JPMorgan Chase plans a new headquarters on Park Avenue, some big banks and money managers are shifting resources by hundreds or thousands of miles to cheaper US cities.
In recent years, Goldman Sachs Group has built up operations in Salt Lake City, while Deutsche Bank AG has expanded in Jacksonville, Florida. Pacific Investment Management just chose Austin, Texas, for a new office as the asset manager seeks to recruit tech workers and broaden marketing in the US.
Last year, relocations contributed to the first decline in New York City’s securities workforce since 2013. That left the industry with about 176 900 people in town, or 6% fewer than before the financial crisis, according to the state comptroller’s office. The rest of the private sector grew by 23% over the same span.
AllianceBernstein considered as many as 30 cities – examining attributes including housing, cost of living, education and weather – before making its pick, the Journal said. The company’s initial intent wasn’t to move its headquarters, but that changed as the search unfolded, the Nashville Post reported.
In addition to cutting costs, the move was prompted in part by lower state, city and property taxes in Tennessee compared with the New York area, the Journal reported, citing unnamed sources and a staff memo.
The firm plans to start shifting workers this year, but the company’s money managers and private-client business will remain in New York, the publication said.
Jonathan Freedman, a spokesman for the asset manager, didn’t respond to a request for comment.
Official word on the move may come as soon as Wednesday. Tennessee Governor Bill Haslam and the state’s Department of Economic and Community Development invited media outlets to an event tomorrow at the state Capitol at 10 am local time to unveil a “significant economic development announcement.” The advisory doesn’t provide details on which company is involved.
Money managers are under increasing pressure to reduce their spending as investors focus on low-cost mutual funds and other products. Among actively managed funds, only the most inexpensive are luring new money, the Investment Company Institute said in a report this week. AllianceBernstein has been no exception. In the first quarter of 2018, the asset manager had net outflows of $2.4bn.
Bernstein, who joined from JPMorgan in 2017, has been consolidating the asset manager’s office space to reduce costs. In an October conference call with investors, the firm said it had vacated a floor at its New York headquarters to market for sublease, a move that was expected to produce annual savings of $3.6m a year.
The firm has roughly 3 500 employees globally and manages about $550bn in assets.
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