Miami: new front-office playground or back-office sandbox?

BY SITAN ZHANG & RILEY KINSER - 14 SEP 2021

                                       

Photos by Yibei Geng and Alex Kotliarskyi on Unsplash

Glamorous beaches, sea views, booming real-estate all come to mind when picturing Miami. Despite news of notable tech firms claiming to support relocation, it is firms in the financial/fintech sector who are making more significant moves. Though this fact may not come as a surprise to some readers, the types of finance roles that are growing the fastest in Miami may.

Overall, we found that over the last 12 months ending July 31, 2021, the Miami talent pool working in finance specific roles grew ~2%. This is in line with Atlanta and slightly above US cities like New York, Boston, Silicon Valley, as well as some international cities (London, Zurich).
Recent headlines also seem to confirm this growth story noting recent new office openings announcements made by notable finance firms including Blackstone (Jan 2021), D-1 Partners (Jun 2021), Affinity Partners (Jul 2021) and Apollo (Aug 2021), to name a few.



However, these numbers are average when compared with faster-growing geographies like Austin, TX, or even the U.A.E which posted 4% and 6% growth during the same period, respectively. On the other end of the spectrum and by-far an unsurprising outlier is Hong Kong which declined (10)% during the period.

A deep dive into our data uncovered something surprising - that the largest moves to Miami are not highly skewed towards the Wall Street elite, executives, and other wealthy founders. Nor do the moves skew towards other higher paying roles in venture capital or investment banking.

The highest weighted average growth companies are, in fact, in the financial services and Insurance sectors.

Financial services account for 51% of Miami’s finance industry and grew by 2.9% over the last twelve months (LTM), while insurance accounted for 23% of the industry and grew by 2%. The fastest growing sectors accounted for < 3% of the finance population in venture capital & private equity (0.7% of finance population, 17.1% growth) and investment management (2.1% of finance population, 15% growth). As a result, while some may be focused on high-end office space, this trend represents a stronger shift towards more standard, utilitarian spaces.

Examples of growing financial services companies in the Miami area during the period include Morgan Stanley, Bank of America, JPMorgan Chase, and Primerica.

While Miami is a diverse city, boasting a healthy Hispanic population, the experience level, tenure, and role of the employees at these companies may not be as special. Particularly, the distribution of tenured talent is like other core finance cities where these companies have larger operations. This potentially indicates that the corporate structures are skewed towards operational roles, not front office whales.

Though it is no surprise that firms in the financial sector are making the most significant moves in Miami, the growth seems to be much more dominated by middle-paying roles rather than the finance elites and executives. This might suggest that the move is temporary as the true decision makers are slow to relocate; however, one can also draw the conclusion that Miami could become home to more non-head office properties filled with people in more operational roles.
With costs rising dramatically in traditional finance hubs for non-head office/executive space, Miami’s low taxes, business friendly environment and convenient geographical advantages being located on the east coast may shape up to be a low risk trade.

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