Washington Life Magazine
Washington Life Magazine

then you’re going to have to build it. There’s little hope in sight. And I think that that bodes well for close-in property owners.
MATHIAS:We read a lot about weakness in the housing market. Are you seeing evidence of this?
WINSOR: Yes. It has tremendous upside, in the medium and long term, particularly close-in. There’s an exceptional amount of wealthy people who don’t want to suffer a commute and will pay a higher price for a good property located close-in.
MATHIAS: Do you think the upscale housing stock is sufficient given the growing availability of wealth?
WINSOR: No. But there are a lot of developers who have addressed this need very successfully. Anthony Lanier, for instance, has built high-end condominiums in the city and has sold them out before they’ve come out of the ground. The various Ritzes and Lanier’s projects are synonymous with addressing the need for a higher caliber of housing stock. There are a number of others who have really made their mark here in the city: Jim Abdo, Monument Realty and JBG, just to name a few.

MATHIAS: Today’s roundtable panel reflects the breadth of activity in our region. We have a community bank, a national investment manager, and a broad-based financial institution participating. Tell me a little about your firm and your client base.
VEITH: I’m with Rockefeller & Company, Inc. We started off as the Rockefeller family office, but today the family represents less than a third of our client base. We are privately owned, independent and focused solely on wealth management. Our approach is comprehensive, but in the investment area the one theme that runs throughout most of our internally managed equity portfolios is global equity. The global theme done in-house is generally large cap. We also do U.S. small cap and high quality fixed-income in-house. We supplement our inhouse capabilities by providing clients access to leading/ specialized outside managers, including hedge fund managers and private equity firms. We have approximately $8 billion in total assets under management as of April 30, 2007.

And your minimum account size?
VEITH: We don’t have a standard minimum. If it’s the right fit, we could start with $5 million.
WINSOR: I’m chairman of Bank of Georgetown. We’re a small community bank, newly formed and privately owned. Our shareholders are all business leaders in the city. There have been a number of small banks that have grown successfully in the suburbs, but with the renaissance of Washington, D.C., we see this as a very exciting opportunity. Our best customers are small to medium-sized businesses and nonprofit organizations that need a hands-on approach.

HARRELD: PNC Bank is commonly known as a super regional, meaning most of our banking activities are within the United States. But we’re an international player in some things – we’re one of the world’s largest processors and account managers of mutual funds. Our investment management activities are about $80 billion if we don’t count our ownership in BlackRock [the global investment firm]. We offer services for individuals, institutions, foundations and ultrahigh net worth people through our Hawthorn subsidiary. For most commercial banks, investment management is another service they offer. With us, it’s one of our major lines of business and one of our fastest growing as well.

MATHIAS: What are your clients’ primary concerns, in terms of their financial well-being, over the next three-to-five years?
VEITH: The geopolitical situation – what’s going on in Iraq and that part of the world. It’s not something they’re losing sleep over, but they know a blowup there is going to impact their portfolios, at least in the short run. And there’s also a general concern that tax rates will be going up and how that is going to impact stock prices and their disposable income.

MATHIAS: Michael, you mentioned changing preferences on the part of investors. How have portfolios changed?

HARRELD: Ten years ago the average client’s portfolio would have been an asset mix that’s pretty traditional with a smattering of international. The democratization of the capital markets, where people with more modest net worth have access to much more of the potpourri of products out there, is changing that. In addition, the excellent returns of recent years have been in international and global markets, but what Paul said is exactly right: there is an issue of political stability and the interconnectedness of the world.

MATHIAS: Looking out threeto- five years, what returns can an investor expect from a welldiversified portfolio?

VEITH: One way to go about it is to look at the expected returns for each asset class. If you start out with a pretty conservative 60/40 traditional equity, 40 percent municipal bond, or some type of fixed income, you are definitely in the single digit range for expected returns. For equities, just in the broad large cap indices, the



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