By JASON BOOTH

Staff Reporter

When Marvin Davis, Lee Iacocca, Geraldo Rivera and Barbra Streisand want their millions invested, they turn to Century City-based fund manager Todd Morgan.

You, too, can employ his services, as long as you make a minimum commitment of $5 million.

Morgan is chairman of the aptly named Bel Air Investment Advisors LLC, which since its inception at the start of the year has specialized in serving the super affluent.

Morgan runs a small, personalized operation providing the 24-hour service that wealthy individuals demand. Bel Air has only five money managers and three analysts. They manage around $1.5 billion for roughly 50 families.

Clients are charged an annual fee of 1 percent for the first $10 million under management. For investments of up to $20 million, the fee is 0.85 percent of assets; fees for a larger amounts are negotiable.

While the strong stock market and the continuing surge in merger-and-acquisition activity are creating new multimillionaires, Morgan says he intends to keep his clientele exclusive.

Before setting up his own shop, Morgan ran the West Coast investment advisory business of Goldman Sachs & Co. Goldman colleagues Reed Halladay and William Feiler joined Morgan when Bel Air Investment was established, along with Todd’s brother Thomas Morgan, who was a manager at Lazard Freres & Co. Darell Krasnoff, managing director of Goldman Sachs’ L.A. office, joined Bel Air in May.

Question: Do you see the pool of super-wealthy people in Los Angeles increasing?

Answer: Yes. It’s enormous. There’s a feeling that there is a teeming current of entrepreneurial activity here. A lot of success is being created day by day in this community.

Every day, there are announcements of acquisitions of companies here in Southern California for 20, 30, 40 million dollars. These are businesses that you have never heard of before.

Q: So how is it different managing the money of the super rich, rather than the merely wealthy?

A: It’s not a matter of making enough money for retirement. Our clients already have enough money to do whatever they want to do in life. Our job isn’t to make them rich it is to keep them rich. We can only make them poorer. So our investment style is one of preservation of capital, making the most amount of money on the least amount of risk.

Q: And just how do you go about keeping these people wealthy?

A: Our primary task is to pick the asset allocation that fits their investment mentality, their sleep-well quotient and their long-term goals. Asset allocation is about 80 percent of good investing. It’s secondary what stocks you buy, or for that matter what money manager you pick, if you have the wrong asset allocation.

If you are 60 years old and have $25 million to $50 million to invest, our average asset allocation is about 50 percent stocks, 50 percent bonds. If you are 40 years old, you might be 65 or 70 percent equities. If you are my children, you might be 100 percent stocks.

Q: How often are you on the phone with you clients?

A: With new clients we might speak to them several times a week to make them more comfortable. As time goes on we talk to some people on a quarterly basis, but other people who are more active we’ll talk to every week.

Q: Your clients are a mix of wealthy entertainers and very successful business people. Do you handle these two types of clients differently?

A: About a quarter of our clients are in entertainment. Most of the rest have made their fortune by selling a business, or real estate.

Entertainment people need more attention and more hand holding. They have less business experience. They are slower in giving trust, but when they give it, it is more significant.

Even though business people might not have a lot of investment experience, they are pretty quick to figure out if what they hear makes sense for them.

Q: Entertainment people are sometimes stereotyped as being careless with their money. Do you find that to be the case?

A: No. In fact, most people who are entertainers are worried that they are never going to get another job. So they tend to be risk averse. But remember, most of the entertainment people we handle have a minimum of $5 million or $10 million, so we don’t have many people who would fit into that category of wasting their money.

Q: Your clients include Marvin Davis and Lee Iacocca. These are exceptional businessmen in their own right. Do you ever find it intimidating managing money for billionaires?

A: I find it very exciting, stimulating and educational. You can learn a lot from very successful people. There is some cross pollination that comes from these relationships that is not only beneficial to us, but to our clients in general.

Q: So who would be easier to explain a loss to, Barbra Streisand or Marvin Davis?

A: I don’t want to touch that one. But I can say that for people to give you their money, they must like you and trust you, and it isn’t something that ends when you have a bad month.

Q: You have been managing money for rich people in this town since the 1970s. How has the business changed?

A: I think wealthy individuals are moving away from brokerage relationships where you call up your broker to hear his best idea, to more entrusting someone who will be responsible for getting up before the sun rises in L.A. to check out what is happening throughout the world.

Q: How much does relationship-building and personality play in your business?

A: I think it is number one. People have to know that you really care. It is like going to your doctor. If your doctor appears to have a genuine feeling of ownership in your good health, you are going to feel good about using that doctor. A close second is performance. You can be the nicest guy in the world, but if you don’t perform, you are not going to get in the door.

Q: Given that so much of your work is relationship driven, do you try to develop personal, recreational relationships with your clients?

A: Yes, Yes, Yes. Of course, you don’t have time to develop recreational relationships with everyone, especially with the hours we keep. But we consider many of our clients also our friends. It’s a natural outgrowth of dealing with something so precious to them as their money. We do a lot of lunches. We get to know our clients’ wives and children. An important part of wealth management is getting to know the big picture in terms of the family. One of my partners is going on a walking tour of Italy with a client. A few years ago I went to Bali for a client’s wedding.

Q: What kind of hours do you keep?

A: It’s a long day. We have to be on New York time to watch the market and to talk to analysts. But we have to be on Los Angeles time to talk with our clients. I get up at 4 in the morning and am in the office a little after 5. If I don’t have a dinner appointment, I get home around 6:30 p.m. When I go to bed I usually have a research report on my lap. Most of us work a half day on the weekend, either in the office or at home. It is my life.