Carl Icahn moving hedge fund to Miami, whether his workers like it or not

Introduction

We note with interest Carl Icahn’s recent decision to relocate his investment group from New York to Miami. Norman Alex set up an office in the US six years ago because of the obvious need to have a presence in the largest financial services market in the world. We opened in Miami rather than New York, which would have been the obvious choice, partly because the costs are significantly lower but primarily for more strategic reasons. We believed, and still believe, that lifestyle will play an increasingly important part in deciding where to do business. Furthermore, Florida offers not just an exceptional lifestyle but also an attractive fiscal environment.

This trend has been relatively slow but will, in our opinion, start to pick up momentum with the arrival of a new generation who place perhaps more importance on the work/life balance that we “oldies”. In addition, the financial services sector in South Florida is focused essentially on the domestic and Latin American markets. We believe that the region is well placed to develop into a truly international center, à la New York or London, covering other geographies such as Europe and the Middle East. The main challenge is to find the right people since the local talent pool is certainly less strong than in more established financial centers. This is another reason why we opened our office in Miami!

 

Carl Icahn moving hedge fund to Miami, whether his workers like it or not

Billionaire investor Carl Icahn is moving to Miami next year — and his employees who don’t like it will be let go without any severance, The Post has learned.

Icahn quietly informed the staff of his publicly traded Icahn Enterprises that he’ll be shuttering its offices in New York City and White Plains on March 31, and immediately re-opening in Florida’s Magic City the next day.

“My employees have always been very important to the company, so I’d like to invite you all to join me in Miami,” he wrote in a May 17 letter obtained by The Post.

To sweeten the deal, Icahn promised that everyone who makes the move will be paid at least as much in salary and bonus next year as they earned in 2018, and that anyone who gets fired before March 31, 2023, would get an “immediate payment” equal to that amount.

He also offered a $50,000 “relocation benefit,” that will be “payable in April 2020 once you have established your permanent residence in Florida,” according to a follow-up memo.

But for those who don’t relocate to the Sunshine State, “the Company will not contest your unemployment claim,” the memo says.

“The current maximum weekly Unemployment benefit rate is $450, which you can receive for a total of 26 weeks,” it adds.

That works out to a total of $11,700.

By comparison, the average hedge-fund portfolio manager was expected to take home about $1.4 million in salary and bonus last year, according to a November report by Institutional Investor.

Icahn — who has a net worth of $17.6 billion, according to Forbes — employs approximately 50 people, including about 20 professionals, according to sources familiar with his operation.

More than half accepted their hard-nosed boss’s take-it-or-leave-it offer by the July 1 deadline, the sources said.

In his letter, Icahn — a philanthropist whose name adorns Mt. Sinai’s School of Medicine and Icahn Stadium on Randall’s Island — said heading south was “not an easy decision to make.”

“After spending my entire career in New York, while I certainly do not wish to retire, I’ve decided that at this point in my life I’d like to enjoy a warmer climate and a more casual pace year-round,” he wrote.

Icahn, 83, didn’t offer any other explanation, but affluent New Yorkers have been fleeing to Florida to save money since President Trump’s 2017 Tax Cuts and Job Acts limited the federal deduction for state and local taxes to $10,000.

Icahn, who grew up in Far Rockaway, Queens, has since 1997 owned one of just 36 houses on the exclusive Indian Creek Village island in Biscayne Bay, where his neighbors include singer Julio Iglesias and legendary former Miami Dolphins coach Don Shula.

He hasn’t yet decided if he’ll sell the two penthouse apartments he owns in the Museum Tower luxury condo building that overlooks the gardens of the famed Museum of Modern Art.

Icahn formerly served as a Trump adviser on corporate regulatory reform, but resigned ahead of an August 2017 New Yorker article that detailed potential conflicts of interest involving his stake in an oil-refining company, CVR Energy.

Icahn didn’t immediately return a request for comment.

 

(New York Post).

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