LOS ANGELES - Institutional investors are unlikely to meet former Vice President Albert Gore Jr. the next time they include Metropolitan West Asset Management LLC in a fixed-income final.
Mr. Gore's role as vice chairman of parent company Metropolitan West Financial Inc., Los Angeles, will not affect the operations of the five asset management subsidiaries that among them manage $51.2 billion for a largely institutional and high-net-worth clientele.
"Al Gore won't have anything to do with our subsidiaries, nothing to do with the asset management side," said Richard S. Hollander, chairman and chief executive officer of Metropolitan West Financial.
"Our model is that we do not interfere with our subsidiaries, we haven't gotten into cross-selling of their products or disrupted their autonomy. They don't need a lot of help and have all the infrastructure they need to succeed. This is part of the tremendous strength of our subsidiaries and we don't want to ruin that. We have a very clear understanding of what makes them strong."
Mr. Gore instead will have a strategic role at MetWest Financial and will concentrate his efforts on mapping out a global model for the financial services holding company. That will include determining a strategy for European and global expansion, most likely through strategic alliances, acquisitions or team liftouts, Mr. Hollander said.
Private equity help
Mr. Gore also will work with MetWest Financial executives to develop a private equity capability, probably within a new subsidiary. He will add a macrolevel understanding of trends, especially in biotechnology and information technology, that might be helpful to private equity analysts and portfolio managers, Mr. Hollander said. MetWest Financial does not offer any private equity management now and Mr. Hollander said the company will be "real careful" to make sure the new unit does not conflict with existing businesses.
The existing subsidiaries are:
* MetWest Asset Management, Los Angeles, which manages $16 billion in fixed-income strategies for institutional clients;
* Metropolitan West Securities Inc., Los Angeles, which oversees $32 billion in securities lending assets and short-term fixed-income securities for institutional clients;
* Metropolitan West Capital Management LLC, Newport Beach, Calif., which manages more than $2 billion in large-capitalization value equities mainly for institutional investors;
* MW Post Advisory Group LLC, Los Angeles, which manages $634 million in domestic high-yield and distressed securities for a largely institutional client base;
* MW Pritchard, Hubble & Herr LLC, St. Petersburg, Fla., which manages more than $600 million for high-net-worth individuals, with a focus on servicing retired airline pilots.
Mr. Gore will not move to Los Angeles; he will continue to teach in Tennessee at Fisk University, Nashville, and Middle Tennessee State University, Murfreesboro, said Mr. Hollander. Mr. Gore will telecommute and spend some time in the company's headquarters in Los Angeles, but Mr. Hollander said he anticipates Mr. Gore will be traveling a lot to set up international and private equity subsidiaries.
More announcements likely
MetWest is among the first money management holding companies to snag such a famous name, but it won't be the last, predicted Paul Schaeffer, executive vice president of vendor consultant Capital Resource Advisors Business Strategy Group, Mill Valley, Calif.
"Money management companies are going to need people with broader skills sets" beyond traditional investment management, Mr. Schaeffer said. "I'm surprised that this kind of thing hasn't happened before. It may be reflection of the maturity of the industry, but I think we are getting to the point where this kind of appointment will happen more frequently."
Not surprisingly, Mr. Gore also is expected to "help open a lot of doors and make contacts for the company," he said. Mr. Gore's "real, demonstrable knowledge of the world" likely will help better establish MetWest's brand name, Mr. Schaeffer said. And his "passion for trends that have an impact on investing" such as biotechnology and informational technology, also will demonstrate to clients MetWest's expertise, Mr. Schaeffer said.
"The key part of branding is knowledge. It differentiates you, and I think this is where Mr. Gore may be very helpful," Mr. Schaeffer said. "I think it's a pretty smart move on many fronts. It's very, very creative."
Jane Marcus, a partner in the Chicago office of executive recruiter Heidrick & Struggles, agreed the move was unusual. "It's far more common to see notable political figures going into investment banking," she said, using by way of example Robert Rubin's departure from the U.S. Treasury Department to join Citigroup Inc., New York.
"It certainly makes sense that a politician would go into the private equity side of the money management business, although I would not necessarily have named Al Gore," Ms. Marcus said. "It's only a matter of time before others (politicians) make the same move."
Serendipity was largely responsible for Mr. Gore's move into money management. Mr. Hollander met Mr. Gore through friends of friends.
"Hiring the former vice president was one of the last things on my mind," he said. "I didn't think Al would be open to it at all, but after we talked, I realized that it could work. If you think of it in terms of sports, if you have the ability to get a really great athlete for your team, you really have to think about it seriously."