A multinational, publicly traded asset manager with more than 3,500 employees and about $549.5 billion in AUM is moving from Gotham City to Music City.
]) will move its headquarters from New York City into a new Nashville office tower, expected to be ready by 2021, the Nashville Post
and the Wall Street Journal
both report, citing a Tuesday memo sent to the AB workforce by president and CEO Seth Bernstein
. More than 1,000 jobs could move to Tennessee thanks to AB's HQ shift, according to the Post
. Tennessee Governor Bill Haslam is scheduled to hold a "significant economic development announcement" mid-morning today, and the Nashville Business Journal reports
that the announcement will include AB executives.
also reported on the move.
According to the Post
, the plan is for AB to bring client group, compliance, finance, human capital, internal audit, IT, legal, and operations personnel to Nashville. The paper makes no mention of moving any investment staff.
AB's current headquarters is at 1345 Sixth Avenue, between 54th Street and 55th Street in midtown Manhattan, and the lease doesn't end until 2024. Back in December 2016
, under then-CEO Peter Kraus (succeeded
by Bernstein six months later), the AB team were reportedly considering at least three options, all still in midtown Manhattan. (AB also already has big presences in Hong Kong and London, and it has two other NYC offices and another nearby, in White Plains.)
Last fall, less than a year later, Bernstein was reportedly considering moving
some staff to one of two Southern cities: Charlotte, North Carolina (a big growth spot for AB's parent, Axa
), or San Antonio, Texas (already home to an AB office). Yet Nashville, and moving the AB headquarters, did not seem to be on the table at the time.
Indeed, the Post
now reports that "it was not the original intent to relocate the company's headquarters; that shift happened as the process unfolded." The WSJ
frames the moves as "part of a broad cost-cutting effort within a firm that for years has been under extreme pressure from the rising popularity of index-tracking funds and low-cost investing." Bernstein reportedly describes Nashville as a "magnet city" and the "clear winnner" after the AB team considered a host of factors, including: "housing, education, cultural amenities, weather, cost of living, business-friendliness, ability to source talent both locally and nationwide, and diversity/inclusion."
"These were compelling reasons enough to make Nashville our new corporate headquarters," Bernstein reportedly wrote in the memo. "When we considered as well that Nashville will ultimately be AB's largest global location by far, with a significant senior leadership presence, in a vibrant and growing city that is committed to developing its infrastructure, supporting local business and attracting new talent, the decision really made sense."
Where in Nashville will AB's new office tower be? The Post
points to two possibilities: the Nashville Yards site, on the western edge of downtown, which is being developed by a company, Southwest Value Partners, that AB has financed to the tune of $60 million; and a $430-million development at Fifth and Broadway, which is being co-developed by OliverMcMillan, a company whose assets were recently acquired by a Canadian private equity firm, Brookfield Asset Management, that AB owns a slice of.
News of AB's planned move to Nashville comes less than a week after French multinational Axa officially unveiled
the upcoming IPO
of its U.S. division, Axa Equitable Holdings. That unit (expected to trade under EQH on the NYSE) will include Axa's 64-percent stake in AB, as well as U.S. life insurance and retirement plan businesses. The IPO is expected to raise $3.5 billion and value all of EQH at about $14 billion.
Neil Anderson, Managing Editor
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