Money managers in Los Angeles are overseeing a $4 trillion battle with the fire’s impact on business, Reuters staff

By Suzanne McGee and Davide Barbuscia

(Reuters) – Los Angeles-based asset management companies overseeing more than $4 trillion in assets are grappling with the impact of the region’s devastating wildfires on their operations, with some relocating office space and support staff who lost their homes.

The Los Angeles area is home to major industry players such as Capital Group, TCW Group, and hedge funds Oaktree Capital and Ares Management (NYSE:).

In total, Los Angeles firms manage more than $4 trillion of the $132 trillion in global assets under management in the United States, including a number of major players in the bond market. The disruption comes as U.S. Treasury yields rise on heightened expectations that interest rates will remain high for longer and on fiscal concerns.

The fires reduced entire neighborhoods to smoldering ruins, leaving an apocalyptic landscape and destroying suburbs and wealthy enclaves.

“Numerous members of our team have been displaced and several have lost their homes entirely, including my family,” Katie Koch, president and CEO of TCW, the $203 billion asset management company, said in a letter to colleagues in Los Angeles, which she reposted on LinkedIn.

TCW said all of its Los Angeles-based employees are safe and sound. Koch did not immediately respond to a request for comment, but a company spokesman confirmed that her home was lost in the fire.

Anacapa Advisors, a $60.5 million hedge fund that moved into new, larger offices in Pacific Palisades just weeks before the fire, saw that building burned to the ground as the Palisades Fire, the largest of several blazes to sweep the county Los Angeles, rampant throughout the area. community, according to a company spokesperson.

In a letter to the company’s clients, Anacapa founder and CIO Phil Pecsok said all employees are safe and the team has successfully activated its business continuity plan.

Now they work remotely “with full access to trading platforms and risk monitoring systems.” They place orders for additional trading screens and communicate with each other continuously via Zoom (NASDAQ: ), he said.

Pecsok did not immediately respond to a request for additional comment. A spokesman said Pecsok was working from a second home after evacuating his primary residence.

Other property management companies are taking precautions as forecasts call for Santa Ana winds fanning the region’s flames to last through Wednesday, increasing the risk of the fire spreading further.

Oaktree Capital, an asset management firm that manages more than $200 billion in assets located in downtown Los Angeles, remains open for business as usual, said Todd Molz, the company’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 local power outages caused by wildfires,” Molz said.

Employees of Los Angeles-based DoubleLine have been working remotely this week because of poor air quality downtown, a spokesman for the Florida-based bond investment firm said.

The Milken Institute, a Santa Monica-based think tank, and Dimensional Fund Advisors, a Texas-based investment firm with nearly $800 billion in assets and an office in Santa Monica, said they have mostly switched to working from home.

The Milken Institute said it had closed its office, encouraging staff to care for their families and work from home, while the DFA said it was urging anyone who could do so to work remotely.

Kevin Philip, a partner at Los Angeles-based Bel Air Investment Advisors, which manages more than $10 billion in assets, said he and some of his colleagues are working remotely. “Covid has really prepared us to manage through this and maintain our functionality,” Philip said.

Other major asset managers are further away from the immediate danger zone, such as Pimc, which is located about 40 miles (64 km) south of Los Angeles in Newport Beach. The company declined to comment. (This story has been corrected to describe Oaktree Capital as an asset management firm, not a hedge fund firm, in paragraph 12)