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Asset managers shift to remote working, check contingency

plans

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Hedge fund Anacapa Advisors' new office burned to the

ground in

Pacific Palisades

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COVID experience helping firms cope with wildfire planning

By Suzanne McGee, Davide Barbuscia

Jan 14 (Reuters) - Los Angeles-based asset management

firms overseeing more than $4 trillion in assets are grappling

with the impact of the region's destructive wildfires on their

operations, with some relocating office space and supporting

staff members who have lost their homes.

The Los Angeles area is home to large industry players like

Capital Group, TCW Group and hedge funds Oaktree Capital and

Ares Management ( ARES ).

In total, firms in Los Angeles manage more than $4 trillion of

the $132 trillion in global assets managed in the United States,

including a number of major players in the bond market. The

disruption comes at a time when U.S. Treasury yields have been

climbing on reinforced expectations that interest rates will

stay high for longer and on fiscal concerns.

The blazes have reduced entire neighborhoods to smoldering

ruins, leaving an apocalyptic landscape and devastating both

suburbs and wealthy enclaves.

"A number of our team members have been displaced and

several have lost their homes completely, my family included,"

said Katie Koch, president and CEO of TCW, a firm that manages

$203 billion in assets, in a letter to her Los Angeles

colleagues that she reposted on LinkedIn.

TCW said all of its Los Angeles-based employees are safe and

accounted for. Koch did not respond immediately to a request for

comment, but a company spokesperson confirmed that her home had

been lost to the fire.

Anacapa Advisors, a $60.5 million hedge fund that moved into

new, larger offices in Pacific Palisades only weeks before the

fires, saw that building burn to the ground as the Palisades

Fire, the largest of several fires sweeping across Los Angeles

County, whipped through the community, according to a

spokesperson for the firm.

In a letter to the firm's clients, Phil Pecsok, Anacapa's

founder and CIO, said all of its employees are safe and that the

team successfully activated its business continuity plan.

They now are working remotely "with full access to trading

platforms and risk monitoring systems." They are placing orders

for additional trading screens and communicating with each other

continuously via Zoom, he said.

Pecsok did not respond immediately to a request for further

comment. The spokesperson said Pecsok was working from a second

home after evacuating from his primary residence.

Other asset management firms are taking precautionary steps as

forecasts predict the region's flame-fanning Santa Ana winds

will persist through to Wednesday, raising the risk that fires

may spread further.

Oaktree Capital, a hedge fund firm managing more than $200

billion in assets located in downtown Los Angeles, remains open

for normal business operations, said Todd Molz, the firm's chief

operating officer. Many of Oaktree's 700 employees in the area

have been affected by the fires, he said.

"Our data center in Los Angeles is equipped with backup

power and is available without interruption in the event of

regional or localized power outages caused by the wildfires,"

Molz said.

DoubleLine's employees based in Los Angeles were working

remotely this week due to the poor air quality throughout

downtown, a spokesperson for the Florida-headquartered bond

investment firm said.

The Milken Institute, a think tank based in Santa Monica,

and Dimensional Fund Advisors, an investment firm headquartered

in Texas with nearly $800 billion in assets and an office in

Santa Monica, said they had switched largely to work-from-home

arrangements.

The Milken Institute said it has closed its office,

encouraging staffers to care for their families and work from

home, while DFA said it was urging anyone who was able to do so

to work remotely.

Kevin Philip, partner at Los Angeles-based Bel Air

Investment Advisors, which manages more than $10 billion in

assets, said he and some of his colleagues were working

remotely. "COVID really set us up for managing through this and

keeping our functionality going," Philip said.

Other large asset managers are further from the immediate

danger zone, such as Pimco, which is based some 40 miles (64 km)

south of Los Angeles in Newport Beach. The company declined to

comment.