By ELIZABETH HAYES
Staff Reporter
What’s it like to be worth “north of $5 million?”
If you’re Rock Hankin, you pilot your own single-engine Beechcraft Bonanza to business meetings, live in a 5,000-square-foot hillside home in Mountain Gate, see about 50 movies a year, drive a Mercedes S500, dine occasionally at the Bel Air Hotel and wear custom-made suits.
Hankin admits he’s not frugal, but neither does he describe himself as extravagant.
“I live well,” he said in an interview at the California Club downtown. “I certainly can do just about anything I want. I’m nowhere near the top echelon of wealth in this city.”
Hankin’s comfortable lifestyle is a direct result of the success of his management consulting firm, Hankin & Co., which turns around troubled companies and helps healthy companies grow. He is one of hundreds of Angelenos who have ridden the wave of a booming economy, as well as the bull market.
Indeed, a new state report prepared for the Business Journal shows that the number of households with incomes from $5 million to $25 million went up 62 percent between 1994 and 1996.
“I think the growth in wealth is largely related to the tremendous opportunities we have in this country to involve ourselves in new and existing technologies,” Hankin said. “Tremendous wealth is being created by people who are well educated and have a drive to succeed.”
Another factor, he said, is the fact that the Baby Boomers are now in their 40s and 50s, their top income-earning years. Plus, there’s the entrepreneurial spirit of Los Angeles especially strong, he says, in several of the immigrant communities.
“The Hispanic community and Korean community are contributing to the richness of society and to its success,” Hankin said. “They’re creating a ton of wealth through small businesses.”
The state report also shows that the ranks of middle-income earners are thinning, while the number of poorer households are on the rise. Hankin said he doesn’t worry about a city of haves and have-nots, but does admit concerns that L.A.’s multitude of cultures may lead to “the desire of a lot of people to Balkanize and keep cultures apart.”
Hankin, 51, has steadily increased his monetary worth over the years, first as a general partner at the international accounting and consulting giant Price Waterhouse, and especially over the past 12 years as chief executive of Hankin & Co., his Century City management consulting firm, and Hankin Investment Banking. He said his net worth was under $1 million when he left Price Waterhouse, swelling by five times since then.
Hankin, who has a money manager, said he invests his surplus funds in the stock market, with a leaning toward high-quality stocks and large companies such as Intel Corp., General Electric Co. and Ford Motor Co.
“I really don’t have any wealth goals,” he said. On the other hand, he said, he wouldn’t want to “regress to when I came out of college with nothing.”
“Do I expect to become wealthier? Sure.” But he maintains his life has never been about making piles of money.
“I’ve been very curious about life and experiences and willing to make changes to explore new horizons. As a collateral benefit, I’ve managed to amass wealth. I can honestly say I’ve never done anything specifically driven to making money,” he said.
He also believes in giving back, donating more than $100,000 to his alma mater, UCLA.
Hankin didn’t reach this level of affluence by mere chance. He said business was always in his blood.
He grew up on the Westside and started working at age 13 at his parents’ accounting firm and insurance agency. After graduating, cum laude, from UCLA with a major in accounting in 1968, he was recruited by Price Waterhouse LLP, where he spent the next 18 years as an auditor and general partner. He also took correspondence courses at the Blackstone School of Law and was admitted to the bar in 1975.
When he left to form his own company in 1986, he was the managing partner of Price Waterhouse’s Warner Center office. His decision to strike out on his own was in part prompted by two personal events: thyroid cancer and divorce.
“I was (figuring), if I don’t have much longer, am I satisfied or do I want to explore other things?” Hankin said.
He also didn’t like the direction the accounting profession was going, away from quality and toward risk (an assessment he said proved to be wrong). He had two offers to become a company president, a move that probably would have netted him more money in the long run, but he declined.
“I’m very independent,” he said. “I can’t say it’s not without risk and at times I’m not wistful for the corporate womb.”
Ample financial resources, the need for only about five hours of sleep a night and “bright people I work with” enable Hankin to pursue myriad interests outside his work. He weight trains three days a week, plays racquetball twice a week, sees up to 20 plays, musicals and dance performances a year including “Chicago” recently and reads 50 books a year, mostly New York Times bestsellers and historical biographies. He just finished “Damascus Gate” by Robert Stone.
Hankin will be married for the third time in November and hopes to have children.
He said he’s not a workaholic, getting to the office around 9 a.m. after working out and leaving between 5 p.m. and 6 p.m., rarely taking work home.
He describes his management firm, which has 25 employees, as focused on creating value in business. He declined to divulge his clients by name, but said he has placed a chief executive and financial officers on the staff of a subsidiary of a telecommunications provider in Houston that had fallen on hard times, and also advised the board of an environmental remediation company on its business plan.
His work and connections have led to positions on the boards of a dozen public and private companies, including Semtech Corp., Alpha Microsystems and House of Fabrics before it merged with Fabric Centers of America.
Hankin also teaches a course in business strategy as part of the program in entrepreneurship at the Anderson Graduate School of Management at UCLA.
“This is such a large and wealthy city, it’s pretty easy to feel irrelevant,” Hankin said. “I’ve done a good job of creating relevance. A lot of people would say, ‘He’s lucky.’ And a lot would say, ‘He hasn’t realized his potential.’ I say, I’m a work in progress.”
