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Graham Capital Management is planning to expand to New York after decades as a Connecticut-based hedge fund, in a vote on the future of America’s financial capital following an exodus of investment firms since the Covid-19 pandemic.
“We are looking at spaces literally as we speak,” Kenneth Tropin, founder and chair of the $20bn investment firm, said in an interview with the Financial Times.
He added that the New York office will accommodate a staff of at least 30, led by portfolio managers. Graham, which this week marked its 30th year of operations, has workforce of about 210 in offices in Connecticut, Florida and London.
While not a large number, the dozens that Graham aims to employ in New York will come as welcome news to a city whose office buildings have remained underused since working from home became common during the pandemic. Since 2020, more than 100 investment companies ranging from Elliott Management to Ark Investment moved their headquarters out of New York.
Even though office occupancy rates remain well below pre-pandemic levels, the exodus appears to have slowed. An index compiled by VTS, a real estate technology company, shows New York is leading a recovery in office demand across the US. Ken Griffin, founder of hedge fund giant Citadel, and two developers last month filed plans to build a 62-storey office tower in New York, where his firm will become the anchor tenant.
Tropin said his firm needs to have a presence in New York as the city remains a magnet.
“We recognise that there are a lot of talented people who would prefer to work in New York for a number of reasons,” he said. “Portfolio managers may want to have meetings that are easier to have in New York than they are in Connecticut.” A New York location might also be more convenient for some clients, which range from pension funds to family offices, he said.
While Manhattan’s office rent more than doubles that of Norwalk, the city that is home to Graham Capital’s headquarters, Tropin is not deterred.
“It’s not inexpensive, but I don’t see a reason not to do it.”
Graham Capital has outlasted many peers. Its flagship Proprietary Matrix fund reported 523 per cent in total returns between 2000 and 2023, according to an investor who has read its performance report. That compared with an increase of 228 per cent for the S&P 500 index over the same period.
Tropin said Graham had benefited from a focus on macro trading, which navigates market swings often driven by geopolitical and policy uncertainties.
“There were 60 25-basis-point rate changes in the last two years compared to 13 25-basis-point rate changes over 10 years between the Fed, [European Central Bank] and [Bank of England], so if you’re a macro trader, there’s significantly more to work with. And you may not always get it right, but there’s a much more interesting set of opportunities to work with.”
He added that his firm had hired consultants to understand the Middle East situation as “what’s going on in crisis zones is as impactful as domestic politics”.
