Managing Director, Deutsche Bank Alex. Brown, Los Angeles
Education: B.A., economics, University of Southern California
Team Assets: $3.2 billion
Typical Account: $30 million plus
Specialty: High net worth individuals in the technology sector
Years in Business: 16
Quote: "We do very little of the investing ourselves. We're almost like a financial quarterback."
Investing and wealth management are in Howard Rowen's blood.
His father, Harvey, was president of Merrill Lynch Trust Co. and the Charles Schwab Trust Co. And as a legislative counsel, was principal drafter of the Securities Act Amendments of 1975.
What's more, Rowen grew up in Ridgewood, N.J., a major commuter town for Wall Street brokers, where most of his friends were children of investment bankers.
"Ever since I could remember, I wanted to work on Wall Street, like my father and everyone around me," Rowen said.
And it was from his father that Rowen got his first exposure to his guiding investment philosophy: wealth preservation first, a competitive rate of return second.
"My clients are people who have already created their wealth," he said. "They need me to help preserve their wealth."
One of the best tools to achieve this is known in the wealth management industry as "non-correlation." That's when asset classes behave differently to the same economic event. "So if interest rates go up, part of your portfolio goes up and part goes down," he said.
This philosophy served Rowen well as the technology bubble collapsed earlier this decade. At the time, most of Rowen's clients were in the technology sector, either as founders or top executives of companies.
As the technology bubble kept expanding in 1999 and 2000, Rowen's more conservative instincts kicked in and he began urging his technology clients to diversify out of their company stock and outside the industry. "In light of what happened in 2001 and 2002, we did a good job there," he said.
This strategic investment shift is what Rowen considers one of the big wins of his fairly young career. And having successfully steered most of his clients around the worst of the Nasdaq collapse, he urged them to put their money into fixed-income assets and hedge funds, still favorites of his today.
Of course, this same strategy can have its downside. For example, Rowen admits he didn't move quickly enough to invest in the booming international equity markets, long considered risky. "We've probably not diversified enough into the emerging markets," he said.
Rowen doesn't pick individual stocks or equity funds to invest in. Rather, he and his team see their role as helping clients design their portfolios and then finding the best institutional, private equity and hedge fund managers to carry out the investment strategy. For clients with major stakes in companies they have founded, Rowen uses derivatives to hedge the stock.
"We do very little of the investing ourselves. We're almost like a financial quarterback," he said.
Like many of his contemporaries in the 1980s, Rowen did summer internships on Wall Street. When the October 1987 stock market crash hit, Rowen was in college at the University of Southern California. "Things got a little tighter back home that semester," he recalled.
While at USC, Rowen interned at Shearson Lehman, and after graduation went to work for the brokerage. But Rowen wasn't entirely happy there. "It was a large retail focus firm and I really wanted to be in private wealth."
As soon as he could, Rowen jumped ship and, in May 1993, landed at Alex. Brown, where he immediately began managing the portfolios of high net worth individuals.
His timing was impeccable, right as the technology sector was beginning to take off. Alex. Brown, since acquired by Deutsche Bank, was the underwriter for some of the major technology company initial public offerings.
"I was introduced to the founders of technology companies. My career path took off with the wealth creation in technology in the mid and late-1990s," he said.
But Rowen is ever-mindful of diversification, even when it comes to his own client base. With two-thirds of his clients still in the technology sector, Rowen is now focused more on expanding into other arenas. He's branching out into the entertainment industry and also seeking clients in other industries.
Through all this, Rowen still finds time to spend with his wife, Karee, and two young daughters. With what he considers an exceptionally strong team behind him and the latest in technological innovations, Rowen can do much of his work while away from his downtown office.
Indeed, for this story, Rowen was reached while on vacation with his children at Legoland in Carlsbad.
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