CT trusts ‘new world’ firms to drive financial sector recovery

Over the past year, several companies have announced ambitious plans to each hire hundreds of employees in Connecticut. Financial services are arguably the main driver of this surge.

Mirador and other fast-growing companies such as Digital Currency Group, iCapital, and Tomo Networks alone will not make up for the significant and longstanding job losses in Connecticut’s financial industry since the 2008 financial crisis. Even now , years after the financial shock, the state is still grappling with the downsizing of some of its largest financial services and insurance companies.

But local and state authorities are confident that their growth, supported by targeted state subsidies, can help sustain the economic recovery the state has charted in the two years since the COVID-19 pandemic shutdown. .

“Old-world financial services have struggled,” Governor Ned Lamont said in an interview this week. “New world financial services are doing very well.”

New wave of financial services

To support its growth, Mirador plans to open by the end of this summer its offices under construction covering more than 20,000 square feet on the fourth floor of 850 Canal St., in the southern district of Stamford. Employing approximately 100 people, the company specializes in managed services for the wealth management industry.

It will relocate from 10 Corbin Drive in downtown Darien, where its main offices have been since its founding in 2015 – after deciding to stay in its home country.

“By being here, we’re able to attract people who have been in the state,” Mirador founder and managing partner Joseph Larizza said in an interview. “But we also have graduates from Arkansas, Notre Dame, Michigan, and they’ve all chosen to come and live and work in Stamford. Compared to New York, it’s much more affordable for us and for them.

Other newcomers include Group of digital currencies, a cryptocurrency and blockchain technology-focused company that is building a new headquarters at the Shippan Landing complex in the Shippan section of Stamford. DCG announced plans last November to hire more than 300 people in the state over the next five years.

Last year also brought major job announcements from iCapital and Tomo Networks. With a technology platform used by asset managers and wealth managers, iCapital aims to create 200 jobs over the next two years at its Greenwich town center offices, which opened in September.

Tomo, who focuses on real estate, committed to employing up to 100 local professionals by the end of last year at its South End headquarters in Stamford.

“You’re really coming into our growing fin-tech sector here,” Stamford Mayor Caroline Simmons said at a Monday press conference at 850 Canal to announce Mirador’s move. “Along with all the other fantastic businesses we have, you really add that vibrancy to our city.”

She added: “We hope you enjoy Stamford. There are many restaurants, you have The Village, Granola Bar and all these fantastic amenities.”

Mirador employees will appreciate the 850 Canal’s proximity to restaurants and entertainment venues, Larizza said. A central location for the new offices was a high priority given that employees are used to a bustling environment in downtown Darien.

“The ability for us to create community — whether it’s having a drink after work or having a business lunch — we had to be able to recreate that,” Larizza said. “Stamford was one of the few places that allowed us to create this environment and this culture, so we can really be one.”

Widespread job losses

Despite the optimism generated by recent hiring announcements, the state’s financial sector has still not returned to employment levels that predated the 2008 financial crisis. Preliminary data from the US Labor Department State show that in March, 117,700 people worked statewide in “financial businesses,” which include banking and finance, insurance, real estate, and rental and leasing.

Employment in the sector is down 0.9% from a year ago and 19% from March 2008. Overall, state employment increased 3% in over the past year, but is still down 4% from the same point in 2008.

Last July, People’s United Bank, based in Bridgeport, announced that it would lay off around 750 employees, following its acquisition by M&T Bank. However, the actual number of layoffs could be reduced because the company said earlier this month“People’s United employees will be given priority when applying to more than 1,000 job openings across all M&T communities.”

At P&C insurer The Hartford, the #142 company on last year’s Fortune 500 listConnecticut’s workforce declined over the past year by about 600 positions, or 10%, to a total of about 5,500. Employees who left the state while continuing to work for the company distance accounted for about 50% of the decline.

In addition, Connecticut is still grappling with the withdrawal of multinational financial services company UBS. Its number of employees in the state plunged from 3,775 in 2008 to 1,136 last year. The Swiss-based company declined to comment on the reasons for the state’s workforce slump, though its efforts since 2008 to contain costs have been widely reported.

NatWest Markets, a neighbor of UBS in the downtown Stamford office building at 600 Washington Blvd., has faced similar headwinds over the past decade. Formerly known as the Royal Bank of Scotland, it laid off more than 700 Stamford-based employees between 2015 and 2018.

A role for (small) business grants

During the 2011-2019 tenure of Lamont’s predecessor, Governor Dannel P. Malloy, business subsidies played a significant role in state strategy, much of which was aimed at the financial sector.

But the precipitous decline of UBS employment in the state has revealed the limits of these incentives. In 2011, UBS qualified for a $20 million loan that could be fully forgiven if it met certain employment goals. Its 10-year contract with the state ended last year, with the company awarded a $12.5 million rebate, while having to repay the remaining $7.5 million. Over the past decade, it has achieved just three times the annual employment average needed to get the maximum loan forgiveness.

The Lamont administration has not disavowed corporate subsidies, but it generally offers much less financing compared to large deals approved by Malloy.

“We’re trying to make sure it’s transparent and simple, it’s low cost to taxpayers, and it’s low risk,” said the commissioner of the state Department of Economic and Community Development, David Lehman, in an interview.

“We need to have something, but it’s not the No. 1 game in the playbook. We want to be at the forefront with all the great things happening in Connecticut – the certainty taxation, recent population growth, [state budget] surpluses, the tax house is getting back in order. That’s what we lead with – not incentives.

To support Mirador’s growth, the DECD will provide a grant of up to $3.24 million, which will allow it to create and maintain 250 full-time jobs.

Larizza said the support of officials such as Lamont, Simmons, Lehman and Peter Denious, CEO of AdvanceCT, a nonprofit focused on economic development, was instrumental in Mirador’s decision to stay in Connecticut.

Before choosing Stamford, the company also considered potential headquarters in other states, including New York, New Jersey and Rhode Island.

State funding was “definitely a factor” in the decision to move to Stamford, Larizza said. “But more importantly was the enthusiasm…what Governor Lamont, David, Peter and Mayor Simmons did in relation to all the states around us was remarkable.”

Digital Currency Group and iCapital also qualified for grants in the seven-figure range if they meet employment goals. Similarly, asset management firm Hudson Bay Capital could receive a grant of up to $1.3 million if it creates 40 additional positions in its existing offices in Greenwich. The amount of Tomo’s potential grants has not been finalized.

“These are the right kinds of incentives. They make good use of state money,” Chris DiPentima, CEO and president of the Connecticut Business & Industry Association, said in an interview.

“It’s about ‘creating jobs and then getting incentives,’ whereas I think under the previous administration a lot of money was spent to bring businesses to Connecticut, but not necessarily to develop and stay in the state.”

[email protected]; twitter: @paulschott

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