Wilshire Offering Individuals Same Services as Institutions

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At first glance, it may seem puzzling that an investment house with $12.5 trillion in assets worldwide which has historically served only institutional clients would go down market to court individuals with as little as $500,000 to invest.


But it was announced last week that Wilshire Associates, through its Wilshire Funds Management unit, will work with First Private Bank & Trust to develop a platform that essentially will offer high net-worth individuals the same access to complex financial instruments and alternative investments that institutions now enjoy.


The reason: Wilshire will be able to tap into a vast market. The pool of money from inheritances, foundations and family trusts is $55 trillion.


Gary Helme, executive vice president of First Private Bank, whose executive offices are in Encino, said the relationship will help target prominent families and foundations that want less restrictive yet more transparent approaches to investing that they would get at a regular brokerage, bank or trust company.


Helme and Lawrence E. Davanzo, who is Wilshire Associates’ senior managing director, say the “open architecture” approach to investing is what makes this deal different.


Open architecture, which Wilshire has long been known for in institutional circles, relies on efficient data sharing between multiple service providers and the clients themselves. This is more than just an Internet interface where people can view account balances; an adviser can keep track of multiple investments from a hedge fund, a mutual fund and a private equity fund, for example, and integrate the data into an easy-to-use client profile.


Although Wilshire, based in Santa Monica, is comfortable in the lucrative and exclusive institutional world, Davanzo said he has no reservations about offering services to the lower end of the world of the rich.


“Is there such a thing as down-market rich people?” Davanzo asked. “Seriously, this is something that we’ve been looking at strategically for several years now.


“And no, this isn’t traditionally what we’ve been involved in. But sometimes the best thing about tradition is creating new tradition.”



Vulture Capital?

Oaktree Capital Management, a downtown investment firm with $37 billion in assets, is attempting to raise nearly $11 billion in what could eventually be the world’s largest fund aimed at salvaging and restructuring distressed companies.


The aim of Oaktree’s OCM Opportunities VII fund is to use an initial $3.5 billion to buy tarnished assets such as bad loans and poorly performing corporate bonds and hold more than $7 billion in reserves to expand its purchases once more investors hop on board.


So far, Oaktree’s fund has received eight-figure commitments from the Pennsylvania State Employees Retirement System, the Indiana Public Employees’ Retirement Fund and the Washington State Investment Board. The California Public Employees Retirement System, which chipped in $36.3 million last year for OCM Opportunities VI, has an ongoing relationship with Oaktree and is mulling over investing in Opportunities VII.


This initiative comes as rising defaults on real estate and commercial debt are creating an environment ripe for such funds.



A ‘Doctor’ in the House

Arturo Concha, the new senior vice president and head of the SBA/ Commercial Capital Division at Glendale-based upstart Americas United Bank, likens his loan review approach to that of a medical doctor. He plans to employ what he hopes will be a prescription for success in the Spanish-speaking business realm of Los Angeles County and beyond.


“When a doctor sees a patient, he evaluates the circumstance and seeks a solution,” Concha said. “It’s the same way you evaluate businesses.”


And much in the way doctors improve patient health, Concha wants to use this approach to turn the barely six-month-old institution into what he calls a “major” business banking boutique for Latino businesses.


Concha, a star in the Latino business loan community, has worked at City National Bank and other banks. He comes to AUB from Banco Popular where he was a top small business loan producer nationwide for several years in a row. He said he wanted a bigger challenge and found the big-fish, small-pond equation especially appealing.


“What happened at Banco was they decided to centralize the division out of Chicago and I just wanted more control.” he said. “What struck me about AUB is that the directors and executives are all business owners who have gone through the SBA loan process and know about the issues involved.”



Clipped Wings

The National Credit Union Administration finally stepped in formally last week to request that Wings Financial Federal Credit Union end its month-long unwanted takeover attempt of El Segundo-based Continental Federal Credit Union. Both are credit unions for airlines and others in the air transportation industry.


The regulator said it reviewed the original offer by Wings to pay members of Continental $200 in cash if it merges with Wings, and informed the Minneapolis institution that such an offer is impermissible under the provisions of the Federal Credit Union Act.


“NCUA has informed Wings that the (Federal Credit Union Act) does not allow per capita dividend payments, and that no other legal authority exists for a federal credit union to make this kind of payment,” said a statement issued last week by the regulator. “The unilateral promise of a dividend by the continuing credit union in a proposed merger, without the approval of the merging credit union, is not lawful.”


Further, the regulator told Wings that its unorthodox merger campaign as well as its aggressive efforts to sway Continental members after rejection was “troubling” to the industry as a whole. Accordingly, NCUA has formally requested that Wings immediately discontinue any and all overtures regarding a merger with Continental.



Staff reporter Jabulani Leffall can be reached at

[email protected]

, or at (323) 549-5225, ext. 228.

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