Canyon Partners Weighs Texas Off-Ramp From California’s Troubles
Canyon Partners Weighs Texas Off-Ramp From California’s Troubles
(Bloomberg) -- Canyon Partners, the $24 billion hedge fund firm, is considering setting up a new office in Texas next year to flee what its leaders see as the high taxes, congestion and fire risks of Southern California.
Dallas and Austin are the front-runners and the firm expects to make the final decision next month, according to people familiar with the discussions. Canyon’s founders, Josh Friedman and Mitch Julis, could be among those moving to the outpost, the people said.
The duo’s hedge fund has been a regular fixture in Los Angeles since its founding after the 1990 collapse of Drexel Burnham Lambert, where they worked under the tutelage of Michael Milken. Canyon became one of the most notable offshoots from the Milken world of finance that once thrived in Beverly Hills in the 1980s.
Canyon is now exploring a shift and employees have been pitched the lure of Texas to lead a better life. Other states may be considered, the people said.
The firm would keep its Los Angeles office and not insist anyone move, one of the people said.
While Canyon management doesn’t know how many people would initially choose to relocate, there is interest from some employees because of the lower cost of living, no state income taxes and the prospect of better schools and less congestion than Southern California, the person said.
Like many states in need of more revenue due to the economic ravages of the global pandemic, California is considering raising taxes on its richest residents.
Several other hedge funds are also contemplating opening offices in lower-tax states, a plan that appears easier now that firms have successfully navigated personnel working remotely for much of this year. Elliott Management may relocate some staff to Florida, though it will keep its headquarters in New York City.
Canyon had 177 employees as of the end of 2019, according to its latest regulatory filing. A spokesperson declined to comment.
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