Tuesday, December 18, 2007
I'm in New York this week, but on my way home to England for Christmas - and one of my staff sent me a great article in Hedgeworld (which needs a subscription) on the ongoing debate of London vs. New York.
Per this article, the battle is now on for hedge funds and the British Government is working hard to attract them. On the positive side, London is much closer to the broader investor market and the FSA, while highly regulating the market, is considered predictable. On the positive side for New York though, it's cheaper to do business there and the US savings market is supportive of alternative investments. But while New York still leads the hedge fund market today, the London growth rate is 63% vs. the New York growth rate of 13%
I think the trend is a challenging one for New York, although the weak dollar may turn the tide back. At the base of New York's problem, as was much reported in Jan this year, are two issues: the litigious environment and geography. The stranglehold of regulation on US public companies is not going to go away soon, and while some of it was good to correct for the issues of the past, some of it is ridiculous (for example the way accounting firms now behave during audits - it's hard to believe until you live it).
And the perfect location of the British Isles has been an advantage for England for 500 years. Money can flow in from the West and the East with ease, into a large, modernized airport with fast rail to London (unlike arriving at terminal 7 at JFK).
The best thing about what's happening is the fun of the healthy debate. Whether it's semi serious about the financial markets or amusing about lifestyle, the press (for example this running commentary) is now documenting the debate that has been active at my family's dinner table for 20 years, ever since I left England for California.
My personal observation - London will always have the emotional pull of "home" for me, the streets are the streets I roamed as a romantic teenager and the theatre is hard to beat. But New York offers an unbeatable combination for me now: exciting work, building a new company, fantastic entertainment and a place my teenage kids love to come to and roam around while I am working.