(Bloomberg) — After losing his job following a New York real estate crunch, Garrett Thornburg spent several months in 1975 getting benefit checks while living in a loft on Lafayette Street.
“I was probably the first member of my class at Harvard Business School to collect unemployment,” Thornburg, 75, said in an interview.
His luck soon turned. He became chief financial officer of the New York State Urban Development Corp., and in 1979 moved to investment bank Bear, Stearns & Co., where he was a limited partner and a founding member of its public-finance department.
Yet it wasn’t on Wall Street that Thornburg made his fortune. In 1982, he decamped for the high-altitude city of Santa Fe, New Mexico, to launch what would become Thornburg Investment Management. Today the firm has 250 employees and about $49 billion in assets. It oversees nearly two-dozen funds, according to its website.
Thornburg said he regularly receives unsolicited resumes from people eager to work at the company’s adobe-colored offices just north of Santa Fe in the shadows of the Sangre de Cristo Mountains.
“Instead of places like New York, you can do your job from someplace like New Mexico, where life is much cheaper, much slower, and you don’t have the commute so you gain an hour or more every day,” he said.
New Mexico was then, and remains today, an unusual place for a large financial-services firm. Thornburg may well be the only broker-dealer whose main offices are in the state, according to data compiled by the Securities Industry and Financial Markets Association.
Thornburg concedes the decision to set up shop in an isolated city 7,200 feet (2,195 meters) above sea level was “not rational.” Having grown up in a small town in Minnesota, he couldn’t envision raising his 2-year-old son in New York. He and his then-wife, an artist, settled on New Mexico’s capital because they’d fallen in love with the area on previous trips. But in the days before widespread use of the internet and fax machines, it wasn’t the most convenient place.
“It was so remote that after one business trip, I brought a printer back from Dallas because we didn’t have an office-supply store in Santa Fe,” he recalled.
And there is still the requisite trip to New York to lure big new investors. That’s what brought Thornburg and his team back late last month, when they rang in a $580 million initial public offering of the new Thornburg Income Builder Opportunities Trust.
Still, Thornburg believes the pandemic has changed the equation, making New Mexico more attractive to big-city dwellers. Another advantage: Santa Fe, with a population of 84,000, paired with nearby Albuquerque as a low-cost back-office center, is an enticing “one-two punch,” he said.
Some financial firms have been leaving New York recently for less-traditional locales, but most of the attention has focused on tax-friendly Florida rather than more far-flung locations.
Read more: Hedge Funds Are Ready to Get Out of New York and Move to Florida
“I have a few clients who moved to states like Colorado, Montana, Utah or Las Vegas, and their firm opened up an office for them to work out of,” said Timothy Noonan, a partner at law firm Hodgson Russ who specializes in tax-residency issues. “But I have not seen an entire firm just up-and-move to a state outside of Florida.”
While Thornburg remains chairman and personally owns about 20% of the company, he now focuses much of his attention on his foundation, which has a $157 million endowment.
Started in 1999, the Thornburg Foundation has helped push through a change to the state constitution to establish an ethics commission, supported the creation of a stand-alone early-childhood department in New Mexico and assisted non-profits in securing government PPP loans to fight against Covid.
One of its biggest recent efforts centered on securing more funding for New Mexico following the release of the new federal Census. Among the poorest states in the U.S., New Mexico is also one of the hardest in which to get an accurate Census count because much of its population is rural and a large percentage are Native Americans, he said.
“Many Native Americans don’t have street addresses – but they count,” Thornburg said.
(Adds number of funds in fourth paragraph.)
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