LOS ANGELES — Bel Air Investment Advisors LLC, a Century City, Calif. firm that manages close to $7 billion in assets for high-net worth clients, opened a new office in San FranciscoThursday as part of a larger expansion plan.
Darell Krasnoff, one of the firm’s founders, will manage the new office; Anup Goel, a newly hired vice president, will also work there. The firm is interviewing to fill three more San Francisco positions.
Krasnoff, Todd Morgan and Reed Halladay, who were managing $6 billion in assets using a fee-based approach at Goldman Sachs, founded Bel Air in 1997. Since then the firm has grown to 50 employees.
“We have been wanting to build a larger footprint for Bel Air for a while,” Krasnoff said. “We think we have proven the concept and fine-tuned the business model.”
About a year ago, Fiera Capital, a Montreal, Canada-based company that manages $86 billion in assets, acquired Bel Air as a stand-alone company.
The acquisition is enabling Bel Air to launch a national expansion plan that will eventually add offices in New York, Texas, Chicago and Miami, Krasnoff said.
The firm is targeting those cities because they have the greatest concentration of liquid wealth, he said.
“We believe our culture of entrepreneurship, independence objectivity, customization and putting clients first will be well received in the Bay Area,” he said.
The firm manages $3 billion in investment-grade municipal bonds directly and $4 billion across all asset classes using third-party managers. The target client has $20 million in investable assets.
In the municipal bond market, the firm acts as both a broker-dealer and as an investment advisor, which enables it to take advantage of opportunities in the marketplace, Krasnoff said.
He described the municipal bond market as the last opaque market driven by investors. The firm typically creates three-or-four year duration portfolios.
“We think we can add value in trading,” Krasnoff said, “whether it is by adjusting variation or taking advantage of short-term slings in muni pricing.”
The firm already has a core of Bay Area clients. Krasnoff said that tech industry entrepreneurs in the Bay Area and Santa Monica are a natural fit for the company, which is entrepreneurial itself.
The founders left Goldman Sachs because they wanted to create a full open-architecture approach not possible at the large investment bank, Krasnoff said.
“We pioneered fee-based management at Goldman Sachs; prior to that it was all brokerage-based,” he said.
Part of that approach is finding the best third-party managers for every asset class and seeking out the best research even if it comes from outside of the firm, he said.
“We recognized, that while Goldman was good at a lot of things, it wasn’t good at everything,” Krasnoff said. “Our clients wanted us to bring the best solution in every category.”
