financial advisers

DealBook: Tribune Hires Investment Banks to Weigh a Sale of Its Top Newspapers

February 27, 2013 by NewsMaker Leave a Comment

Ric Francis/Associated PressThe presses at The Los Angeles Times in 2009.

8:18 p.m. | Updated

The Tribune Company has hired investment banks to weigh a sale of its top newspapers, including The Chicago Tribune and The Los Angeles Times, the media conglomerate said on Tuesday.

The company, which emerged from bankruptcy late last year, has retained JPMorgan Chase and Evercore Partners as advisers, said Gary Weitman, a spokesman for Tribune.

Mr. Weitman said the move was prompted by unsolicited expressions of interest in the newspapers from various suitors.

“Hiring outside financial advisers will help us determine whether that interest is credible, allow us to consider all of our options and fulfill our fiduciary responsibility to our shareholders and employees,” he said in a statement.

Tribune’s move came as little surprise. Speculation had been swirling around the media industry for some time that a number of potential suitors had emerged for the company’s holdings. That group may include News Corporation, which is in the process of spinning off its newspaper holdings from its far bigger Fox Entertainment operations. The new company may consider acquisitions as a way to gain more clout and reduce costs.

Another potential buyer is Aaron Kushner, who owns a group of newspapers that includes The Orange County Register in California and has been vocal about his interest in the Tribune properties.

Peter Liguori, Tribune’s recently appointed chief executive, told The Los Angeles Times last month that he had not ruled out a sale of the company’s newspaper brands, but that he was not “going into this job with a fire-sale sign.”

Tribune is expected to hold on to its newspapers, which also include The Baltimore Sun and The Hartford Courant, if the price offered is not high enough.

A sale would help Tribune focus more on its bigger broadcasting operation, which includes WGN America and about two dozen stations across the country. Mr. Liguori himself is a television veteran, having worked in News Corporation’s television division and at Discovery Communications.

Tribune filed for bankruptcy protection in 2008, just one year after it was taken over by the real estate developer Samuel Zell in a deal that relied heavily on borrowed money.

The company emerged from Chapter 11 protection on Dec. 31, under the control of the investment firms Oaktree Capital and Angelo, Gordon Company, as well as JPMorgan.

It left bankruptcy in relatively healthy financial condition, reporting about $9.8 billion in assets and $1.3 billion in liabilities as of Dec. 30.

Evercore was hired this month to advise The New York Times Company as it considers a sale of its New England media assets, principally The Boston Globe.

Shares in Tribune, which trade over the counter, were up 1.3 percent on Tuesday, at $53.50. That values the media conglomerate at about $3 billion.

News of the hiring of the banks was reported earlier by CNBC.

A version of this article appeared in print on 02/27/2013, on page B5 of the NewYork edition with the headline: Tribune Company Hires Investment Banks to Weigh a Sale of Its Top Newspapers.

Article source: http://dealbook.nytimes.com/2013/02/26/tribune-said-to-hire-bankers-to-sell-newspapers/?partner=rss&emc=rss

Filed Under: Media Business Tagged With: baltimore sun, financial advisers, kushner

Bucks Blog: Dealing With Uncertainty

December 28, 2012 by NewsMaker Leave a Comment

As Paul Sullivan writes in this week’s Wealth Matters column, 2012 was a year of uncertainty, and it looks as if 2013 will at least begin that way. And with investors’ memories of the collapse in equity markets in 2008 still fresh, financial advisers say they have spent much of the last 12 months trying to get their clients to let go of their fears.

As one adviser told Paul, the markets’ performance in the next five years will probably not be similar to its performance in the last five. So investors should move away from worrying about whether they will get their money back and start thinking about making money.

What about you? Do you feel confident in the markets, despite worries about the fiscal negotiations? What have you done with your investments and what are you planning to do in the new year?

Article source: http://bucks.blogs.nytimes.com/2012/12/28/dealing-with-uncertainty/?partner=rss&emc=rss

Filed Under: Your Money Tagged With: 12 months, financial advisers, uncertainty

Wealth Matters: Advisers Caution Against Hasty Decisions in Advance of Tax Changes

November 17, 2012 by NewsMaker Leave a Comment

But financial advisers say that in their rush to do something this year, investors may end up with regrets.

“Any time you make a decision purely for tax reasons, it has a way of coming back and biting you,” said Mag Black-Scott, chief executive of Beverly Hills Wealth Management. “Could you be at a 43 percent tax on dividends instead of 15 percent? The straight answer is yes, of course you could. But what if that doesn’t happen? What if they increase just slightly?”

Various proposals are on the table, but the taxes the wealthy say they worry most about are an increase in the capital gains rate to 20 percent from 15 percent, which would affect investments like stocks and second homes; an increase in the 15 percent tax on dividends; and a limitation on deductions, which would effectively increase the tax bill. For the truly wealthy, there is also the question of what will happen to estate and gift taxes.

In addition, the health care law sets a 3.8 percent Medicare tax on investment income for individuals with more than $200,000 in annual income (and couples with more than $250,000). Taking taxes on capital gains as an example, Ms. Black-Scott, who started her career at Morgan Stanley in the late 1970s, said people needed to remember that the rates were 28 percent when Ronald Reagan was president. “If they go from 15 to 20 percent, is it really that bad?” she asked. “You need to say, ‘Do I like the stock?’ If you do, why would you get rid of it?”

Here is a look at some of the top areas where short-term decisions based solely on taxes could end up hindering long-term investment goals.

APPRECIATED STOCK Many people have large holdings in a single stock, often the result of working for a company for many years. And the stock may have appreciated significantly over that time. But if they are selling now solely for tax reasons, advisers say they shouldn’t. The stock may continue to do well and more than compensate for increased capital gains.

But there is an upside to an increase in the capital gains rate: wealthier clients may finally be pushed to diversify their holdings. “If you have 75 percent of your wealth in one stock, then it’s a really appropriate time to think about this,” said Timothy R. Lee, managing director of Monument Wealth Management. If the increased tax rate “is a motivating factor for some people, O.K. Letting go of that control and the pride that goes with it is a really difficult decision.”

Selling stock now may also make sense when it is in the form of stock options set to expire early next year. “Do you want to take the risk the price will drop in January?” asked Melissa Labant, director of the tax team at the American Institute of Certified Public Accountants. “What if we have a fiscal cliff or a change in the markets? If you’re comfortable, do it now.”

Some investors may also fear that higher taxes will drive all stocks down. Patrick S. Boyle, investment strategist at Bessemer Trust, said there was no historical link between tax increases and stock market performance.

In the most recent three tax increases, he says, “the market has actually gone up in the six months before and after.” He added: “It’s not that tax rates aren’t important. They are. It’s just that there are so many other things going on that are more important than tax policy.”

MUNICIPAL BONDS Bonds sold to finance state and local government projects are tax-free now and will be tax-free next year. That is no reason to load up on them.

Tax-free municipal bonds have always been attractive to people in higher-income tax brackets. Now, advisers fear that individuals just above the $200,000 threshold, people who say they do not feel wealthy but will probably be paying higher taxes on their income and investments, will try to offset that increase by moving more of their investments into municipal bonds.

Beth Gamel, a certified public accountant and executive vice president at Pillar Financial Advisers, imagined a case where people in higher tax brackets, thinking they were acting rationally, sold stocks this year to take advantage of the lower capital gains rates and then, to avoid higher taxes next year, put all or some of that money into municipal bonds. Maybe they outsmart the tax man, but they do so at risk to their retirement.

“It will be very difficult for them to reach their long-term goals,” she said, “because the yield on muni bonds is lower than stocks over time.”

Or as Will Braman, chief investment officer of Ballentine Partners, said of this trade-off: “It’s not about minimizing the taxes but maximizing the after-tax returns.”

He suggested that people use their deductions to reduce what is owed from taxable securities.

Article source: http://www.nytimes.com/2012/11/17/your-money/taxes/advisers-caution-against-hasty-decisions-in-advance-of-tax-changes.html?partner=rss&emc=rss

Filed Under: Your Money Tagged With: financial advisers, tax on dividends, term decisions

S.E.C. Files Suit to Recoup Losses in Stanford Fraud Case

December 13, 2011 by NewsMaker Leave a Comment

The S.E.C. and SIPC have been sparring in recent months over whether Stanford customers are eligible for protection under its rules. SIPC backs customer accounts at brokerage firms against failure much like the F.D.I.C. insures bank deposits.

Unlike the F.D.I.C., however, SIPC does not regulate brokerage firms or conduct examinations of their businesses and accounts. The investor protection corporation is an industry-backed group financed by assessments on brokerage firms.

Stanford Financial, owned and operated by R. Allen Stanford, managed more than $7 billion of customer money that was supposed to be invested in safe, high-yielding certificates of deposit. In 2009, federal authorities seized the bank, and the S.E.C. described the company in a court filing as a “massive Ponzi scheme” in which Mr. Stanford used the proceeds from 21,500 customers in part to finance a lavish lifestyle.

SIPC has said that because the investments were certificates of deposit that were sold by a bank, they were not eligible for its coverage, which is restricted to accounts at brokerage firms. The S.E.C. has argued that Stanford Financial included a brokerage firm, and that many customers opened brokerage accounts in order to buy the C.D.’s. They were given papers upon purchase of their certificates that indicated that the transaction was covered by SIPC, the commission said.

In a filing in Federal District Court in Washington, the S.E.C. asked for a court order compelling the investor protection corporation to begin a liquidation of the Stanford Group, the brokerage firm.

Though there are thought to be few if any assets at the firm, the liquidation filing is a necessary step to allow customers to begin the quest to recover their losses. Investors are covered for losses of up to $500,000 if a brokerage firm fails.

“Stanford’s financial advisers used the apparent legitimacy offered by U.S. regulation of Stanford’s U.S. brokerage subsidiary in order to generate sales” of the certificates of deposit, the S.E.C. said in its filing.

The Stanford scheme began coming apart when redemptions increased in 2008 and early 2009, in part because of the financial crisis, to the point where incoming funds were no longer sufficient to meet investor withdrawals.

Mr. Stanford is in jail awaiting trial on 14 criminal counts related to the investment business. The S.E.C. also has filed a civil suit against him.

SIPC officials could not be reached for comment Monday evening. In 2009, SIPC said that Stanford customers were not entitled to coverage under its policies. In June, the S.E.C. said it had decided that investors should be covered by the insurance; the investor protection corporation said it would issue a decision on whether to heed that ruling by mid-September.

Since then, the two sides have been in negotiations, but they were unable to reach a deal. The S.E.C. has been under pressure from several members of Congress to get SIPC to disburse funds to harmed customers.

Article source: http://feeds.nytimes.com/click.phdo?i=4f102ee8c86a384b8ba85462719d6407

Filed Under: Business News Tagged With: brokerage accounts, financial advisers, fraud case

Ousted Olympus Chief Accuses the Company of Fraud

October 17, 2011 by NewsMaker Leave a Comment

The executive, Michael Woodford, was in London on Monday where he delivered a dossier of what he called “condemning” evidence on Olympus to Britain’s Serious Fraud Office.

Mr. Woodford, 51, said he confronted the Olympus chairman, Tsuyoshi Kikukawa, last week with a report he had commissioned from the accounting firm PriceWaterhouseCoopers, which he said raised questions about almost $700 million in payments that Olympus had made to financial advisers over an acquisition in 2008.

The PriceWaterhouseCoopers report says that improper conduct could not be ruled out. Mr. Woodford said that he had demanded Mr. Kikukawa’s resignation, only to have the chairman convene a board meeting on Friday in which Mr. Woodford, the only non-Japanese executive among the 15 directors, was fired.

“I’d be delighted to return and put in a new management structure,” Mr. Woodford said Monday during a telephone interview from London. “But with or without me, the board should all go.”

Olympus denied any wrongdoing and declined to make Mr. Kikukawa available for an interview.

Mr. Woodford, a 30-year Olympus veteran, had been president since April and added the chief executive’s post in September.

He said he had also made enquiries into Olympus’s acquisition in 2008 of three small Japanese companies unrelated to Olympus’s core businesses for almost $600 million. Those investments were written down to only a quarter of their value within the same fiscal year, he said.

In all, the transactions he is questioning resulted in the destruction of $1.3 billion in shareholder value at Olympus, a maker of cameras and medical equipment, Mr. Woodford said. The transactions, he said, occurred under Mr. Kikukawa, who preceded him as chief executive before becoming chairman.

“Olympus needs a complete and utter forensic accounting,” Mr. Woodford said. “To be that incompetent is difficult to imagine, which suggests that there is something more sinister going on.”

Yoshiaki Yamada, a spokesman in Tokyo for Olympus, maintained Monday that Mr. Woodford had been stripped of his title because his leadership style had created “a big gap” with the rest of management, which was “inhibiting decision-making.”

“All of our mergers and acquisitions have been carried out with proper accounting, and through appropriate procedures and processes,” Mr. Yamada said.

Mr. Woodford’s allegations were first reported by the Financial Times.

Since Mr. Woodford’s dismissal on Friday, Olympus has lost more than $3 billion in market capitalization. The stock sank 22 percent in Tokyo on Monday after losing 18 percent on Friday, when the company fired Mr. Woodford.

Mr. Woodford said the transactions first came to his attention in late July, when an article in the Japanese finance magazine Facta raised questions about Olympus’s acquisition of the three Japanese companies. But when Mr. Woodford asked Mr. Kikukawa about the article over lunch in early August, he said the chairman told him it was “a domestic situation” that the Briton need not worry about.

Mr. Woodford said he sent a copy of the PriceWaterhouseCoopers report to Mr. Kikukawa last week, along with a letter in which Mr. Woodford called the transactions “shameful” and called for the resignations of the chairman and two other executives. He said he also sent the report to all members of the Olympus board and suggested to Mr. Kikukawa that they meet Friday to discuss “where we go from here.”

Article source: http://www.nytimes.com/2011/10/18/business/global/ousted-olympus-chief-accuses-the-company-of-fraud.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: financial advisers, resignation, telephone interview

Small Investors Recalibrate After Market Gyrations

August 12, 2011 by NewsMaker Leave a Comment

After the market rout of 2008 that drastically shrank their retirement nest eggs, small investors withdrew hundreds of billions of dollars from American stock funds, and they kept bolting as the market rebounded sharply for much of last year.

But earlier this year, having missed out on last year’s gains, some investors began to tiptoe back in. The timing for those people was off, and now they are being buffeted by the steep drops on Wall Street or bailing altogether. Still others who have been holding on in recent years have had enough.

Lin Hersh, a 61-year-old small-business owner in Bearsville, N.Y., about two hours north of New York City, called up her stock broker two weeks ago and gave the order to sell everything.

She dumped nearly all of her individual equities and her stock mutual funds, moving almost completely into cash. Ms. Hersh is haunted by the market plunge of 2008, when her $432,000 in savings dwindled to $150,000.

“What I’ve got left after the last downturn is about a third of what I started out with and I’m not in the mood to play anymore,” she said. Pointing to the weak American economy and concerns about Europe, Ms. Hersh said she would most likely steer clear of stocks through the end of this year.

“I don’t think there’s a reason to buy on the dip because the dip isn’t done,” she added.

Small investors provide the bedrock for the United States stock market through their mutual funds, 401(k) plans and other company-sponsored retirement programs. Many have called their stock brokers and financial advisers in recent days, seeking advice or reassurance that their retirements and savings would survive the dives.

The vast majority of small investors have a long-term strategy and are sitting tight. They are not dumping their stocks or mutual funds and, in many cases, continue to pump money into their retirement accounts through employer-sponsored investment plans.

But even before the latest market turmoil, some investors began to look for the exit doors. More than $10 billion was pulled from domestic stock funds in the week that ended Aug. 3, according to the Investment Company Institute. Those levels are double what they were in early July.

And Charles Biderman, the chief executive of TrimTabs Investment Research, estimated that investors probably pulled out another $9 billion this week while the market gyrated wildly.

Just in the last six trading sessions, the whiplash in the Dow Jones industrial average has included three days of either 500-plus or 600-plus dives and two leaps of more than 400 points. Since the beginning of August, the broader Standard Poor’s 500-index has lost 8.8 percent.

Many investors expect continued troubles for stocks. An online survey of investor sentiment this week by the American Association of Individual Investors said that 44 percent of respondents were bearish, expecting the stock market to fall further over the next six months. While that was actually improved from the prior week, it remains well above the survey’s historical bearish readings of about 30 percent.

When it comes to domestic stock funds, which manage $4.4 trillion in assets, there have been many more bears than bulls. Those mutual funds have had four consecutive years of outflows, with investors redeeming $448 billion and putting in $104 billion, according to the Investment Company Institute.

In contrast with these longer-term investors, rapid traders have been keen on gambling as Wall Street gyrates.

TD Ameritrade, the online brokerage firm, reported that trading volumes soared into record territory this week as investors clattered and clicked away on their computers. On Monday, when the stock market fell over 600 points, TD Ameritrade processed 900,000 trades, up from an average of 365,000.

“We’re seeing a lot of new accounts opening and new asset inflows. People are looking for a bottom,” said Nicole Sherrod, a managing director of the trader group at TD Ameritrade. “But for people who stayed in the markets and stayed long, are we seeing some of them exit some positions? Yes. Absolutely.”

After years of underperformance or losses, some investors are questioning whether the long-term outlook that has been drilled into them by Wall Street financial advisers and professionals is really the best advice.

“My wife followed the advice of a financial adviser and she would have been better off putting her money under the mattress. They did nothing but lose money for her over 20 years,” said Adam Corson-Finnerty, a 67-year-old fund-raiser for the New Jersey Audubon.

Mr. Corson-Finnerty pulled his entire $500,000 retirement account out of the stock market at its peak in 2007 and put it into United States Treasuries and money-market funds.

Article source: http://www.nytimes.com/2011/08/12/business/small-investors-recalibrate-after-market-gyrations.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: financial advisers, market plunge, term strategy

Wealth Matters: Managing an Investment Portfolio for Risks, Not Only Returns

August 5, 2011 by NewsMaker Leave a Comment

The debt debate fell into the category of events that could hurt your portfolio, with you having little control over it. The same goes the drop in stock prices at the end of the week; even if you did everything right with your own finances, your portfolio still could lose value.

Yet there are many risks in people’s investments that they can control. How many investors, for instance, know what is in their portfolios and, more important, how those assets work — or do not work — together? How many people use several financial advisers who do not know what the other managers are doing? These and other common mistakes can expose a portfolio to unintended risks.

“This is a primary issue for individual investors,” said Stephen M. Horan, head of private wealth management at the CFA Institute, an association of investment professionals. “We have a much clearer sense of what return is than what risk is. But losses govern the accumulation of wealth to a dramatic extent.”

Here are three areas of risk that often get overlooked:

SECURITY SELECTION The classic example of unintended risk in a portfolio is the investor who buys six different mutual funds and thinks that equals diversification. What the investor may not realize is that all six funds can own 10 of the same stocks. Instead of diversifying risk, the investor has concentrated it.

Mr. Horan said investors needed to know what their holdings actually were. It is easy. Look up the funds’ Top 10 holdings, available on the fund’s Web site, and the sector concentrations. Then, investors need to have the courage of their convictions. Lynn Ballou, an investment adviser and also an ambassador for the Certified Financial Planner Board of Standards, said investors inadvertently increased their risk by being swayed by people who had little knowledge of their portfolio.

“It’s, ‘I went out to lunch with someone and he said, wink, wink, nod, nod, I’ve heard about this company and I’m going to buy some and you should, too,’ ” Ms. Ballou said. “All that is what I call sexy noise. And 99 times out of 100, it’s just fun lunch talk.”

But should investors act on those supposedly hot tips, they are at risk of a problem that Chris Walters, executive vice president at Citizens Trust , calls “portfolio happens,” the accumulation of investments that are not part of an overarching strategy and do not work together.

At the extreme, he said, was a client who recently bought $1 million of gold bullion without telling anyone. “We said, ‘How are you going to get it home? What are you going to do with it?’ ” Mr. Walters said. But the best advice to reduce this behavior risk is to have a personal benchmark, pegged to when you will need the money, like in retirement. Thomas J. Pauloski, national managing director in the wealth management group at AllianceBernstein, said he urged his clients to do that.

“You want to get people away from focusing on the day-to-day jousting,” he said. In doing this, an investor hopes to reduce the risk of buying high and selling low.

MANAGING SECURITIES The market crash of 2008 has instilled a fear of being overly concentrated with any one manager or firm. But spreading out everything among different people is not the solution, either.

“We think about the best fund managers and do a pretty good job at the beginning of finding them,” Ms. Ballou said. “But we don’t stay on top of them. And then, it’s, ‘I just read my famous fund manager retired or got indicted — what do I do now?’ ”

She said more people should think about who is managing their portfolios the way they would think about a garden: after spending time planting beautiful flowers, they don’t let it go without pruning and weeding.

This discipline is not easy, even among the wealthiest. One investor, whose family’s wealth came from an agricultural products company and inheritance, said it was not until the family decided to move to another financial firm that they found out how much unintended risk was in their portfolio.

The investor, who asked not to be name to protect his family’s privacy, said the family had 5 percent of its $50 million of liquid wealth in Microsoft and 7 to 8 percent in Oracle. But since the stocks were held in various accounts, they did not realize how concentrated they were.

“We looked at the stock statements and not what was in the funds,” he said. “Microsoft and Oracle are great companies, but we didn’t have any other significant holdings.”

BNY Mellon Wealth Management performed the risk audit on the portfolio and the family moved their money to that firm. But Timothy E. Sheehan, senior director for business development at the firm, said the risk audits he did for clients were something anyone could do.

“All of this is public information,” he said. “But when you tell them they own 30,000 different equity shares, they say, ‘How did that happen?’ ”

Article source: http://feeds.nytimes.com/click.phdo?i=f6e750e9d788a27b80eba4e5d2bd4851

Filed Under: Your Money Tagged With: financial advisers, investment adviser, little knowledge