Investment Officer Buys Into Running His Own Firm

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Investment Officer Buys Into Running His Own Firm
Jeffrey Bronchick

After his longtime employer got swallowed up by a bigger fish, Jeffrey Bronchick decided to swim out on his own.

The chief investment officer at Reed Conner & Birdwell LLC announced last week the launch of his equity investment firm, Cove Street Capital LLC. The firm, headquartered in El Segundo, will focus on long-term investments in undervalued companies, similar to the strategy of Warren Buffett’s Berkshire Hathaway Inc.

“We’re a classic concentrated value manager,” said Bronchick, 49, who will serve as chief investment officer of the new firm. “We do deep fundamental research to see what good business is selling cheaply. There remains a time-tested opportunity to add value by focusing on one business at a time.”

About 75 percent of the firm’s clients are institutional investors and the rest are high-net-worth individuals.

Cove Street, which launched with about 35 clients and $400 million under management, has six employees, three of whom followed Bronchick from RCB.

The moves coincided with the July 1 acquisition of RCB by asset management firm MetWest Ventures LLC. Bronchick said the management teams were supportive of his desire to launch a firm.

“We cordially negotiated my spinout,” he said.

There’s also another benefit, Bronchick admitted: “I’m finally in the South Bay close to my house.”

Pair of Purchases

It is one of the newest banks in town, but Royal Business Bank isn’t shy about branching out.

The Chinese-American bank, launched in late 2008 in downtown Los Angeles, has closed an acquisition of a small Las Vegas bank just weeks after announcing a separate deal for a Ventura County institution.

Royal Business Bank bought First Asian Bank, which has two branches in the Las Vegas area, for an undisclosed sum. The deal boosted Royal Business Bank’s assets to $360 million.

The institution announced last month that it would also purchase Ventura County Business Bank. The deal, which is subject to regulatory and shareholder approval, will increase the combined bank’s assets to $410 million. The acquisition is expected to close in the third quarter.

Capital Achievement

It took more than a year, but California Business Bank has finally raised some much needed capital.

The downtown L.A. bank said last week that it has raised just over $5 million, fulfilling a key requirement in a March 2010 regulatory enforcement order.

Under a consent order with the Federal Deposit Insurance Corp. and state regulators, the bank was required to raise at least $5 million and achieve a tier 1 leverage ratio of at least 9 percent. The new capital will bring the bank’s ratio to 10 percent.

In a statement, Chief Executive Cole Minnick Jr. called the capital raising process “very lengthy and difficult,” but said the new funds would allow the bank to better serve the local business community.

Closed Fund

Shamrock Capital Advisors LLC has closed its third private-equity fund, a $400 million vehicle focused on investments in the media, entertainment and communications industries.

The firm is looking to make investments of between $15 million and $75 million in companies poised for growth.

Founded in 1978 as a family investment office for Roy E. Disney, Shamrock launched its first private-equity fund in 2001. It has more than $700 million under management.

C-Suite News

Morgan Stanley Private Wealth Management, the investment bank’s ultrahigh-net-worth investment arm, has hired Devon Baranski as regional manager for the Southwest. Baranski will be based in the L.A. office. … Private National Mortgage Acceptance Co. LLC, a Calabasas mortgage investment firm better known as PennyMac, has made a trio of hires. The company announced that Paul Szymanski has joined as a managing director in the warehouse lending group, Jim Follette is now a managing director in the correspondent lending group and Kim Nichols was appointed regional sales manager for the correspondent lending group’s western region. … First California Financial Group Inc., the Westlake Village parent of First California Bank, has hired Diane Dickerson as senior vice president. She will also assume the newly created role of chief marketing officer. … L.A.’s Preferred Bank has hired Wellington Chen as senior executive vice president.

Staff reporter Richard Clough can be reached at [email protected] or at (323) 549-5225, ext. 251.

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