Private Equity Office Migrations – Covid Effect
Covid-19 forced a tectonic shift in how we work and where we work. With more people working from home, many companies took this opportunity, while already disrupted, to relocate their corporate headquarters.
A common sentiment heard on zoom calls, “The home office approach is working better than we expected. Maybe we don’t really need an office downtown.”
“Maybe we don’t need to be in this state,” was the reply.
Consequently, some firms relocated.
Anecdotal conversations around the M&A community suggest a lot of firms left New York and moved to Florida, Texas and Colorado. But what does the data show?
We compared the headquarter locations of private equity firms in our M&A Research Database in January 2000 to March 2021. The chart below shows the migrations of private equity firms over the past 15 months, by state.
A few thoughts and caveats
- While it is true that New York was the hardest hit (in terms of outflow of firms and talent) and Florida was the largest benefactor (followed by CT, TX and CO), given the size of the private equity market, it’s not as much migration as we might have thought. The anecdotal conversations might have oversold this idea a bit.
- The data does not account for those firms that have yet to update their official office location, because they are working from home, but perhaps “home” is now in another state. My guess is, we will see more official moves over time.