Asset manager AllianceBernstein is leaving New York for Nashville.
The 51-year-old asset manager will move its headquarters from Midtown Manhattan to the Tennessee city and relocate about 1,050 jobs beginning later this year, according to a filing with the Securities and Exchange Commission on Wednesday. The company had 3,446 employees worldwide, as of the end of March.
Operations directly related to finance, such as the private wealth management business and sell-side research and trading, will remain in New York, the filing said. Legal, compliance, internal audit, human capital, finance, IT, operations and sales and marketing will move to Nashville.
The company will invest more than $70 million in the city as part of the relocation, a release said. AllianceBernstein plans to complete its new headquarters by 2020, and finish the entire transition by 2022.
"Moving our corporate headquarters here allows us to offer advantages to our employees that we simply couldn't in the New York metro area," president and CEO Seth Bernstein, said during a press conference. He noted lower living expenses, taxes and housing costs, shorter commute times and a more modern work facility.
"We're no Amazon ... but everyone we've interacted with here has treated us as if we were," Bernstein said.
The news was first reported by The Wall Street Journal, which said the chief executive will move to the new headquarters. A spokesperson for the asset manager confirmed that Bernstein will move to Nashville along with the company.
Like many traditional asset managers focused on stock picking, the firm has struggled to keep up with the industry's shift toward passive investing. AllianceBernstein reported a $6 billion decline in assets under management to $549 billion in March. BlackRock and the other asset management giants that dominate the world of exchange-traded funds have trillions in dollars under management.
AllianceBernstein disclosed in a 10-K filing for 2017 that it "began exploring several U.S. cities for the purpose of establishing a second principal U.S. location."
A move "will take place over several-year period," CFO John C. Weisenseel said during the firm's earnings call last week, according to a FactSet transcript. "We would expect to incur transitional costs for the first couple of years before we achieve ongoing expense savings in the future."
The cost of living is about 58 percent lower in the greater Nashville area than New York, according to Bankrate.
Tennessee is also one of a few states with no income tax. "On the corporate side, Tennessee has continued to eliminate any sense of taxation," said Travis H. Brown, author "How Money Walks," a book on how state tax policies influence where Americans choose to live.
New York state saw a decline of more than $99 billion in adjusted gross income from 1992 to 2016, while Tennessee gained more than $14 billion over that time, Brown said, citing his analysis of IRS data.
AllianceBernstein also occupies an office tower north of Manhattan in White Plains, New York, and has an office in San Antonio and smaller locations in 21 other U.S. cities. The company began in 1967 when Sanford C. Bernstein founded a private securities firm under his own name. It was acquired by Alliance Capital in 2000, and the combined entity rebranded as AB in 2015.
Shares fell half a percent in midday trading Wednesday, holding gains of roughly 25 percent over the last 12 months.