Video: Beach hedgies

By Reporter
CNBC
updated 7/2/2007 4:27:53 PM ET 2007-07-02T20:27:53

Wall Street may be the financial capital of the world, but when traders hit the beach during the summer, the Hamptons become Wall Street East.

From Steven Cohen of SAC Capital, to Lloyd Blankfein of Goldman Sachs, some of the biggest names on Wall Street trade their wingtips for flip-flops in the beach towns in Long Island.

Smaller funds are now following suit. Hedge fund managers are building trading floors in the Hamptons, even inside their private homes, so they can execute trades even when they are hanging out on the beach.

Brian Villante left a career as a trader in New York a few years ago to set up Grace Financial, a mini prime broker, in Southampton, N.Y. His company now executes trades for 180 small hedge funds, all of which have at least 50 percent of their trades transacted through Grace Financial’s small trading floor in the east end of New York State – a far cry from the hubbub of the NYSE.

But does being away from the world’s financial center hurt profitability?

"Not detrimental at all,” said Villante. Given the easy communication made possible by technology advances, “we're very close to Manhattan, in the sense that so many people are out here all the time.”

While those like Villante are enthusiastically heading east, local governments are trying to keep the Hamptons from becoming another Greenwich, Connecticut, which is home to 10 percent of the world’s hedge fund money. But the quaint spaces and picturesque scenes are sure to attract more traders from Manhattan, even beyond the summer.

© 2012 CNBC, Inc. All Rights Reserved

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