Sunny winters aren’t the only draw for financial industry professionals to move to Orange County from Wall Street and other finance centers on the East Coast.
Anecdotal accounts point to a variety of factors that attract executives who’ve initially built their finance careers on the other side of the country. They include the increasing role technology plays in aiding mobility; the availability of strong talent pools here; anchor companies, such as Pacific Investment Management Co.; and opportunities to pursue new ventures.
The phenomenon isn’t brand-new, and the appeal has carried over to a fresh generation of transplants.
“There is a real track record of people with East Coast roots building fantastic firms in this Southern California area,” said Stewart Darrell, Newport Beach-based managing director of San Diego-based Delphi Private Advisors.
Darrell pointed to Bill Gross, who was born in Ohio, graduated from Duke University, and in 1971 cofounded bond fund manager Pimco in Newport Beach. The firm was called “the beach” by East Coast bond dealers for its “unique location on the West Coast,” according to Pimco.
Gross, in an interview with the Business Journal in June, said that establishing the company in OC was “not just a matter of innovation but also a business decision,” because “the fact of the matter is, back then, professional help was cheaper” on the West Coast.
“And we found the right pocket, so to speak, and it’s been upwards ever since,” said Gross, who recently joined Janus Capital Group Inc. after leaving Pimco. “I always thought as an investor that it was better to be away from Wall Street, so that when you’re at home, you can contemplate as opposed to having to go to [the bar] and meet with all the fund managers and so on. And it’s worked out pretty well that way. It gives you some space.”
Delphi’s Darrell also noted Howard Marks of Oaktree Capital Management LP and Jeffrey Gundlach at DoubleLine Capital LP as examples, both with headquarters in Los Angeles.
Bucking the System
“You can see that this area is the breeding ground for people who are doing some spectacular things on the high end of the investment spectrum,” Darrell said. “And why is that? I worked in New York, which really is the ‘center of it all’ in the financial world. But there is group-think there, the New York ethos … people trying to piggyback off one another. In my opinion, those who have moved out to the West think, ‘I can do this on my terms.’ To pick up and move out to the West Coast, it takes people who want to buck the system a little bit. That’s why I did it; my bet is it’s a similar thing with others. It’s the people who wanted to go against the institutional trend.”
Darrell, a Virginia native, landed in New York soon after college and found a job at a boutique bank, where he worked on mergers and acquisitions for several years.
“After that, I wanted to get in the managing-money side,” he said. “I decided that I could do that on the West Coast.”
He settled in San Francisco, went back to Virginia for a brief stint, and returned to California to work as an investment manager at the Costa Mesa office of GenSpring Family Offices LLC, a multifamily office that advises about $15 billion in assets.
He joined Delphi this year and launched its OC office.
“I think here, there’s a sense of having to be creative, having to find opportunities and not necessarily getting validation from other groups of people,” Darrell said. “The less distraction you have, the more independent thought you have, the better you can serve your firm and your clients.”
Amy Parvaneh was drawn to the idea that “Orange County was not only very conducive to families but also to being more creative.”
Parvaneh, who moved to Newport Beach this year from New York, called the decision “the biggest risk of my life.”
NYC Factor
“I had a very lucrative job when I was there working on Wall Street, which is where I spent the majority of my career,” said Parvaneh, who built her career through experiences at Goldman Sachs and the New York office of Pimco, among other firms. “But I had a growing family with two very young kids, and I realized that we couldn’t live there anymore.”
Parvaneh pointed to factors, such as Manhattan’s high rent and childcare costs, and long hours spent away from her children, as key reasons for her decision to relocate.
The East Coast had been her home base since her family immigrated to New York about 20 years ago.
“Still, I had had exposure to Newport Beach because I worked at Pimco, and the company had brought me out here before,” she said. “I went and talked to my friends [about moving to California], and they were saying, ‘No one does that. You work, you make your money here, and then you retire.’ But I thought, ‘Why?’ I felt like I have so many other talents and interests in life, and I’d never be able to think about them if I’m always having to do the dog chase.”
Parvaneh made up her mind, even against a job offer in New York that promised double her salary at the time.
She arrived in OC in January and in March launched Select Advisors & Co., a consulting firm that aims to serve as a conduit between wealth advisers and high-net-worth individuals. She is also a professor at Pepperdine University.
Investment manager David Hinman acknowledges that there are challenges to living in New York, and that “you have to make sacrifices, especially if you have a family and live in the suburbs.”
Hinman, who started SW Asset Management LLC in 2009 in Newport Beach when he moved here, still frequently travels to the East Coast. The firm manages fixed-income portfolios focused on emerging-market corporate bonds.
“I think it’s important in the finance business for everyone to spend some time in New York,” he said. “I live in Orange County, and I like California, but I love New York; I love Manhattan. It’s extremely efficient from a business perspective. I like traveling there, although living there was not my first preference.”
Hinman has moved back and forth between OC and New York a couple of times. He first moved west in 1995 when he came to work for Pimco after graduating from the Wharton School with an MBA.
“When I decided to take a position at Pimco, some of my colleagues were saying, ‘You’re going where to do what?’ ” he recalled. “As successful as Pimco was even then, to go work for a bond manager on the West Coast … was a little bit of an off-the-run decision. The [profile] of the firm is nowhere near where it is now.”
Hinman had a 10-year run at Pimco and went back to New York, where he was global head of credit at Drake Management. He wrapped up his work there through the 2008 and 2009 crisis and moved to Corona del Mar with his family.
Investment firms on the “left coast” are certainly “not isolated from New York, Boston and Chicago,” said Michael Schulman, a managing director at Hollencrest Capital Management in Newport Beach.
“It may be anecdotal, but it feels like we are more likely to receive an in-person visit from my East Coast … coverage than from even my West Coast contacts.”
Schulman spent a number of years in advisory and consulting positions in Boston after earning his MBA from the Sloan School of Management at the Massachusetts Institute of Technology.
He moved to Hollencrest in 2005 and manages assets across various sectors, including fixed-income, equity and alternatives, as well as develops global investment outlook guidelines for clients.
Transition Pains
“Long West Coast hours can be a shock to some,” he said. “I wake up with the East Coast and go to sleep with the West Coast. … Stock trading starts at 6:30 a.m., but fixed-income trading begins even earlier. Then, at the end of the day, being attentive and personable to Hollencrest’s West Coast clients means discussions, dinner meetings, and answering client phone calls and emails till easily 9 or 10 p.m.”
Schulman serves as career-development chair of the CFA [Chartered Financial Analyst] Society of Orange County and was its president in 2006 and 2007.
He said the society and the Center for Investment and Wealth Management at the University of California-Irvine are among organizations that can help transplanted East Coasters integrate into the investment community through networking and events.
Corey Edwards, who relocated to the West Coast this year after more than a dozen years at Boston-based Fidelity Investments, is a candidate for the CFA designation.
He cited various reasons for the move, including the ability to spend more time with his young family.
“We had to think where we wanted to live, considering the quality of life and interests in our kids’ education,” he said. “The routine we were in was not sustainable for the family. My wife and I were both battling the guilt of, ‘I’m not spending enough time with family,’ and, ‘I didn’t do everything I needed to get done at work.’ ”
Edwards said he’s studying full time for his CFA exams while his wife works East Coast hours, which he expects will provide balance when he starts working.
California’s Charms
Edwards said the East Coast perception of Southern California tends to be one that recognizes competitive strengths.
“There’s a strong pension business on the West Coast, like Calpers [California Public Employees’ Retirement System], which are large books of pension money, whereas on the East Coast, there’s a lot of college endowment money,” he said. “And there’s certainly pockets of money in between the coasts, but in terms of the institutional side of things … especially with the rise of alternative strategies, California and (the) West Coast in general have a very attractive nature.”
Some come west without much of a perception at all.
Veronica Giordano, a banker with J.P. Morgan Private Bank’s Irvine office, said she “did not know what to expect” when she moved to OC due to her husband’s new job here. Her “love of world travel” helped her prepare for the move and to consider it as “simply a new adventure with my family.”
Giordano is from Buenos Aires and has spent the past 15 years in New York and San Paulo, Brazil. Her financial industry careers involved various roles, including equity research, emerging markets, fixed income and private banking.
She said her experience in Southern California has been positive.
“Orange County is great for financial professionals with families. It is also a growing market, which provides great networking and business opportunities.”
