What is Hedge Fund Week? Miami’s “Wall Street South” has a quick-money Coachella in January

No one in New York or Los Angeles orders a Carlyle Fresco.

But this is what they were mixing the other night poolside at the famous Fontainebleau Miami Beach: a sure sign that the hedge fund set was back in town.

The tequila and grapefruit spritz is named in honor of the Carlyle Group Inc., which was a sponsor of a conference at the hotel.

And, like so many things in South Florida these days, it tasted like such a sweet ingredient: money.

At times Miami seemed as if half of American finance had flown in for what is prosaically known as Hedge Fund Week, a sort of Coachella for the fast-money crowd. The ongoing series of conferences and parties takes place in this area every January, during the height of Florida’s winter season.

“Who’s going to make a deal this week? Make some noise!” the DJ at LIV, the thumping mega nightclub in Fontainebleau, shouted into the microphone late Wednesday night. Outfits in the crowd went crazy.

Now more than ever, New York’s old Wall Street is taking notice of what Miami boosters breathlessly call Wall Street South. Even skeptics wonder if there is more to all this than just advertising. The pandemic has prompted wealthy financiers to flock here for the low taxes and good weather. For now they remain.

Where the money goes, the politicians follow. As President Joe Biden and former President Donald Trump head toward a likely rematch in November, money and influence are swirling around Miami. The city’s annual hedge fund meeting also gives off a new vibe this election season. This is no longer simply a meeting of money managers. It looks like a gathering of kings.

And this may not be an isolated case: Florida has eclipsed California and Texas as the nation’s top source of donations for Republican presidential campaigns, racking up $30 million for Republican candidates in 2023.

“They’ll all be down here raising money,” Nitin Motwani, a derivatives trader turned condominium developer, said of the presidential candidates.

I’m already here.

While Wall Street celebrated on the beach at Fontainebleau, Biden raised $6.2 million at a fundraiser a few miles away. Hedge fund billionaire Henry Laufer, who co-founded the Medallion Fund at Renaissance Technologies with Jim Simons, co-chaired the event. Ninety miles north, in Jupiter, Florida, a group of lawyers raised another million dollars for the president, not far from Trump’s home and private club, Mar-a-Lago.

“Miami is the place where everyone comes out,” said Chris Korge, a prominent Democratic fundraiser and lawyer.

Money flows in all directions. Some major Republican donors who were previously opposed to Trump have begun to turn to him. Scott Bessent, former chief investment officer at Soros Fund Management, initially supported Wall Street’s top pick, Florida Gov. Ron DeSantis. Late last year, Bessent switched to Trump and donated $250,000 to the former president’s super PAC, according to federal campaign documents.

“Over the summer I became convinced that Donald Trump can win,” Bessent said.

Others have been hoping for Nikki Haley since DeSantis dropped out and supported Trump.

On the same day Biden was heading to Miami, real estate billionaire Barry Sternlicht insisted that America needed a third alternative in November. “We are people who don’t like the path the country is following and don’t like our two choices at the moment,” he said on the sidelines of the Fontainebleau conference.

A few miles south, Citadel founder and Miami transplant Ken Griffin said he supported Haley’s campaign — later revealing a $5 million donation — but stopped short of saying he would contribute more to her challenge long-term. (Other business figures who supported Haley include Henry Kravis, Stanley Druckenmiller, and Kenneth Langone.)

A familiar line on party and conference fringes is that financial professionals tend to be “socially liberal but fiscally conservative.” Of course, they said the same thing in 2016, which led to Trump’s presidency and a far-right shift in the Supreme Court.

A big question ahead of the 2024 elections, which Democrats and Republicans say could determine the future of American democracy, is how the financial donor class will strike this balance now.

No one wanted to talk politics aboard the SeaFair, a $40 million luxury yacht sailing the azure waters of Biscayne Bay.

The occasion: another hedge fund cocktail party. This time, the host was Universa Investments, where Nassim Taleb, of “Fooled by Randomness” fame, is an advisor. Universa founder Mark Spitznagel moved his company to Miami from Santa Monica, California, years before Wall Street South was even talked about.

Sitting near the open bar, Brandon Yarckin, the chief operating officer, insisted that politics is never part of Universa’s strategy of trying to profit from unexpected Black Swan events. “We don’t talk about politics,” Yarckin said as the Miami skyline shimmered in the distance.

Taleb avoided the topic altogether. “No, no, I won’t talk about it,” he concluded.

One of about 200 guests, Francesca Federico, co-founder and president of Twelve Points Wealth Management in Boston, repeated the socially liberal/fiscally conservative line. As for who will win in November, you said, “A bond will still be a bond, a stock will still be a stock.”

Joining them aboard the 222-foot SeaFair was Miami Mayor Francis Suarez, who has come to national attention since 2020 by relentlessly selling the idea that Miami could one day rival New York as the financial center of the United States .

It landed him a job at a prestigious law firm and other lucrative side gigs, launched a failed presidential bid and is facing multiple investigations. The Florida Democratic Party called on him to resign on Wednesday.

Wall Street South is not a dream, Suarez told the crowd. It’s a reality.

Motwani, the entrepreneur and another prominent Miami supporter, said for him Wall Street South is a state of mind. “We’re running on all cylinders,” Motwani said during the Buena Vista Social Club’s salsa dun.

Back at the Fontainebleau, one of the week’s meetings, Global Alts 2024, was taking place in the busy LIV nightclub.

For two days, conference attendees sat in silence as the likes of Michael Novogratz, Peter Thiel, Jared Kushner and Shaquille O’Neal debated how and where to make money. Now, hundreds of them have flocked to the dance floor.

Gulping gin and tonics, Johnnie Walker Black Label and mediocre white wine, revelers moved to the beat of the evening’s DJ and headliner, successful early 2000s rapper Ja Rule. Later, while Ja Rule (real name: Jeffrey Atkins) was complaining about his age (he’s approaching 50), he took off his shirt to reveal a sculpted six-pack.

“Let’s hear it for Global Alts 2024!” he shouted.

Pumped smoke machines. It was raining confetti. Wall Street South continued to dance.

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