November 13, 2003
Section: Business

INVESTING IN THE 'LESS' AFFLUENT
Firm serves clients with net worth of at least $1 million

Andrew Blazier, Staff Writer

PASADENA -- It's hard to believe that investors worth more than $1 million could be underserved. But in the world of investment advising, that may be exactly what's happening. Could it be that investors with such formidable net worth have been left out of the investment picture in favor of even more lucrative clients? According to F. Jack Liebau Jr., it's more than possible.

" Affluent investors have fewer choices,' said Liebau, 40, of San Marino. "The big firms are getting bigger. They might get lost.'

Liebau, for 19 years an investment adviser for The Capital Group and Primecap Management Co., says large investment firms such as Merrill Lynch and Morgan Stanley are beginning to require clients to have a minimum net worth of as much as $10 million.

Clients who fall below that amount may be farmed out to other firms, paying fees of up to 2.5 percent on their invested assets.

Liebau, whose father works for a company that manages Santa Anita Park, sees an opportunity in the perceived void among investors with net worths of $1 million to $10 million.

In September, he formed Liebau Asset Management Co. LLC in Pasadena hoping to provide lower-fee, personalized investment services to clients he says are being overlooked by the higher minimum-worth standard.

Liebau's 1,900-square-foot office will serve clients with a minimum net worth of $1 million. Investors who place $1 million to $5 million in assets will pay a fee of 1 percent of their managed assets. Investors with accounts worth $5 million to $25 million pay a fee of 0.75 percent of their assets.

That's as much as 1.75 percent less than many large money management firms, said Liebau, who managed $1.7 billion in assets while at Primecap.

Besides lower fees, Liebau has tried to distinguish himself from the recent mutual funds scandals at companies such as Putnam Investments and Pilgrim Baxter & Associates . For starters, he's only interested in individual stocks - not mutual funds.

In addition, Liebau said, he intends to focus on long-term growth, rather than day-trading or short selling. Clients who use his services will hold individual stocks for an average of five years.

"Ten years ago, mutual funds held a stock for two years,' he said. "Now, it's 11 months.'

With integrity, stability and independence as his major tenets, Liebau won't be known for brashly aggressive investing. But he's certain the new business will attract other investment advisers looking to get in on the ground floor of a growing company.

Andrew Blazier can be reached at (626) 962-8811, Ext. 2477, or by e-mail at andrew.blazier@sgvn.com.

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