Xavier A. Gutierrez
Phoenix is a miracle of a city.
Thanks to the ingenuity of Native Americans and an inventive canal system, later advanced by Salt River Project and others, sustenance and livelihood arrived in the harshest of environments.
The Valley is a community of growth, innovation and leadership, and has risen to become the fifth-largest city in America.
Yet there is a glaring omission if we want to continue to take our place among outstanding global cities.
We should have a lot more major investment banks, private equity funds, venture capital firms, real estate firms and infrastructure investment firms headquartered here.
Phoenix’s investment industry lags other cities
According to the Greater Phoenix Economic Council, there are 641 private equity and related firms in the greater Phoenix area.
That’s far behind comparable metro areas that often compete with Phoenix for new business and industry.
Atlanta has 1,098 firms, Denver has 1,354, and Salt Lake City has 685. Among major hubs, Los Angeles has 4,153 private equity and related firms, while Chicago has 2,423.
Greater Phoenix has about 0.57 firms per capita. To reach the same capacity per capita as a market like Atlanta, we would need to add roughly another 200 firms.
We would need to add more than 1,000 firms to reach the same per capita as Denver and Salt Lake City; similarly for Los Angeles and Chicago.
3 good reasons to make Phoenix a financial hub
Why focus on making greater Phoenix a prominent investment and financial center?
First, this is an opportunity to positively impact our entire economy. When a concentration of financial institutions exists, the entire Valley benefits from the prestige, job creation and broader corporate support that comes from the presence of these types of firms and funds.
Second, young people — especially the graduates of Arizona’s colleges and universities — will have more opportunities to build careers in finance and investment here.
Third, community and civic organizations will benefit from the leadership, philanthropic support and business acumen from these firms and their executive teams.
Large credit unions, wealth management firms and back-office financial operations in the Phoenix metro are a good thing. But that should be just part of a broader financial ecosystem, not its trademark.
Arizona has made huge manufacturing strides
Investment management firms and their service providers should be attracted by the Phoenix area’s friendly business environment, talent pool, high quality of life and perhaps even incentives.
Infrastructure, real asset and energy funds focused on opportunities in the climate resilient future of our planet should be planting their flag in our community. Where else is better?
Private equity and private debt funds should become part of our business community.
Opinion:We fell behind on semiconductors. It’s time to win
As someone who has had a 30-plus-year career in banking, private equity and finance (in addition to my most recent career in sports management, and now institutional sports investment), I am a firm believer that the Valley can and should take on the mantle as a major financial center.
After the economic collapse of 2008, Arizona wisely created an Arizona Commerce Authority to make the state more competitive and to recruit major businesses. Once deficient in manufacturing, portions of the Valley are now exceptionally evolving in this regard.
Thanks to the audacity of leaders like Phoenix Mayor Kate Gallego, former Gov. Doug Ducey and current Gov. Katie Hobbs, we are becoming one of the new semiconductor chip capitals of the world.
Arizona’s economic success over the past 20 years shows we know how to get things done and make extraordinary gains happen.
We can do the same for the financial industry
I am excited by the efforts of public and private entities to attract more investment funds and firms to Arizona. I recently participated in a Greater Phoenix Economic Council Ambassador Forum where we discussed the opportunity to elevate the greater Phoenix metro as a major financial center.
The news isn’t all bad. The Phoenix area has a base to work from. But it will take an intentional effort to grow the industry beyond this foundation.
Many investment and financial firms come to our community for their conferences and conventions, and many executives from that industry come to the Valley for their vacations or make this their part-time home.
We need to help them call this community their permanent home.
Becoming a center of finance, capital and investment is Arizona’s next frontier. Let’s make it happen.
Xavier A. Gutierrez, former president and CEO of the Arizona Coyotes, is chairman and CEO of ImpactX Sports Group. On X, formerly Twitter, @ImpactXSports.
link