Once the bastion of old wealth and privilege, Greenwich, Conn., is ever becoming the center of new wealth and hedge fund wheeling and dealing, The Wall Street Journal reports in this morning's edition.
Since the 1990s, when investment bankers either left positions in New York of their own will or through recession vises, hedge funds have increasingly set up shop in the Town of Greenwich--or borrowed the address.
Today, more than 100 hedge funds with $100 billion of assets under management--that's one-tenth of the $1 trillion that 8,000 hedge funds worldwide manage--reside in Greenwich.
As a result of hedge funds and financial service companies now comprising 65% of commercial downtown space, average rents in Greenwich, population 62,000, now surpass even the best addresses in Manhattan. To do business in Greenwich will set a company back $60-$70 a square foot, for instance, compared to $53-$55 in New York, according to CB Richard Ellis. And rents continue to move sky-high.
Law firm Cummings & Lockwood, an anchor tenant since 1968 at Two Greenwich Plaza, one of the more sought-after offices in town, located at the crest of the Greenwich railroad station, fears it may soon have to move in a few years when its lease expires.
"It's unlikely that we will be able to stay," Edward Rodenbach, a Cummings & Lockwood partner, told The Journal. "The rents are too high."
Greenwich Power Grid
With the number of New Yorkers doing the reverse commute into Greenwich up 710 a day this year alone and Metro North adding two new express trains from Grand Central to Greenwich--the rising number of hedge fund trading floors in town give new meaning to the "Greenwich power grid."
A year-long wait for office space, combined with pricey rents and some trading floors moving to gas-powered generators for back-up, have convinced some high-profile hedge fund managers to open up shop in mansions of their own.
Paul Tudor Jones, for instance, reportedly the highest-paid hedge fund manager in the world, earning $1.02 billion in 2004, works from a mansion once owned by Time magazine founder Henry Luce.
At least local businesses and charities are benefiting from hedge funds' freewheeling ways. Jones recently held a charity ball for the Bruce Museum of Arts and Sciences. As First Selectman Jim Lash told WSJ: "It used to be unusual for a charity to raise $1 million in a night. Now you are seeing that often."