New York Hedge Fund Managers Consider Leaving New York

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Although, New York Governor David Paterson promised to reject any attempt to impose new tax on hedge-fund managers, the proposal is still alive in Albany and it hasn’t been stricken from Albany’s budget plan yet.   It is certainly enough for Connecticut Governor Jodi Rell to continue her efforts to lure the New York’s hedge fund industry to Connecticut.

In June, Governor Paterson and key legislative leaders in Albany endorsed a plan to tax hedge fund managers who work in New York and live out-of-state as ordinary income, rather than capital gains.   The tax hike would have raised $50 million to help close New York’s $9.2 billion budget deficit.

Last week, New York State Assembly Speaker Sheldon Silver told The Post “there’s a good chance” that the tax won’t be included in the final budget deal when it’s wrapped up in the next few weeks.    Also, Mayor Bloomberg, who opposes the tax, privately called some key hedge-funders asking them to stay in New York.

However, hedge fund managers are not convinced.    Their continuing reason for leaving New York is that there is still a threat from the New York legislature to enforce a tax until the budget has been approved and its removal from Albany’s budget plan is contingent on reaching other compromises.   In addition, there is no basis to conclude that the New York State legislature will not reintroduce the proposal next year.   

As part of Governor Rell’s efforts, representatives of 30 city-based financial firms were lured to a private dinner meeting with Rell to hear her pitch to move their businesses to Connecticut and avoid a tax increase on their industry that’s being considered in New York.  A private dinner meeting was held yesterday evening in The Water’s Edge at Giovanni’s II, a steakhouse in Darien, Connecticut.

Author: Anna Timone

Anna Timone works in New York-based institutional money management firm that specializes in various investment strategies. Prior to that, Anna worked in Daiwa Asset Management (America ) Ltd, a foreign subsidiary of the Daiwa Asset Management, Co., the second largest investment bank in Japan, headquartered in Tokyo. Prior to Daiwa, Anna worked with ING Financial Partners and MetLife Insurance Company. Anna is a member of New York State Bar Association, Business Law Section and sits on the Securities Regulation Committee, Private Funds Committee and Drafting Committee for the NY Bar Association.

2010-08-03T14:51:54+0000

All|Central Banks|Economic Analysis|Economic Data|Market Rumors|Regulation

Anna Timone

2 Comments

  1. Thanks Anna! Any good news for CT is good news for me ;) Mornin’ Jamie!

  2. David Paterson is simply wrong to believe that taxing hedge fund managers is good for economic development. Paterson and his crew are simply bad for business. Paterson believes that raising taxes, not cutting spending enough, and borrowing. This is not the correct way to govern.

    However, as we all know too well, Paterson proved long ago that he could not govern. “The Democratic Conference: Organizational and Operational Structure Report” is an eyewitness account of Paterson’s and his crew’s INCOMPETENCE and DYSFUNCTIONAL governing nature while Senate Minority Leader.

    http://www.politico.com/static/PPM110_demreportfinal.html

    Paterson’s office was criticized for PATRONAGE, LACK OF LEADERSHIP, INDECISIVENESS and INFIGHTING. Those interviewed in the report indicated that its chief of staff the disorganized Michael Jones-Bey had no management skills, and should be fired.

    Amazingly, for running such a DYSFUNCTIONAL CHAOTIC office, the disorganized Michael Jones-Bey was picked by Paterson to mismanage the Division of Minority & Women Owned Business Development (MWBE) at Empire State Development Corporation.

    Now that’s the Paterson Way – being rewarded for your incompetence.

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