Wachovia Circuit
The top brass at Wachovia Corp. were ubiquitous this week against a steady drumbeat of criticism of the company's $25.5 billion deal for Golden West Financial Corp.
From Monday through Thursday, chief executive Ken Thompson and chief financial officer Tom Wurtz made four scheduled appearances, and Mr. Thompson was to appear today at the Wachovia Center for Corporate Finance at UNC-Chapel Hill
Last Friday, Wachovia held a conference call to help stem a selloff of its shares by investors who think it is spending too much and taking too much of a risk in the May 7 deal for Golden West, a thrift company in Oakland, Calif.
On Tuesday Mr. Thompson was in New York at a conference hosted by UBS AG, and said he wants to do more deals in California. On Wednesday night he was the honoree at the annual New York benefit for Teach for America; he is a vice chairman of the nonprofit's national board of directors.
A day later, at the Federal Reserve Bank of Chicago's bank structure conference, Mr. Thompson talked about consolidation of asset types. He used Golden West's monoline structure as an example. "You see it in credit cards, auto finance, mortgages, and corporate debt, and eventually you will see it in small-business debt," he said. "And I expect that trend to continue as companies seek to become more efficient and diversify risk across a larger customer base."
Mr. Wurtz spoke Wednesday at a conference in London hosted by Lehman Brothers. He provided some levity, saying Lehman had told him his previous presentations were "terribly boring" and that if he wanted to be invited back it would take a big move by his employer. "So that led to the Golden West acquisition," he said.
Divided He Stands
Wells Fargo & Co. chairman and CEO Dick Kovacevich gave mixed signals this week on the matter of retailers' attempts to enter the banking field.
"I believe in the free-enterprise system and capitalism, and I think we should keep these guys out of our business," he joked Monday in a presentation at a conference in New York sponsored by UBS AG.
He was answering an audience member who wanted to know where he stood on the issue. Neither Mr. Kovacevich nor the audience member mentioned the elephant in the room: Wal-Mart Stores Inc., whose application for an industrial loan charter has irked many bankers.
It's not surprising Mr. Kovacevich sounds ambivalent. He is on the board of Target Corp. and has said banking - with its cross-selling of commoditized products - is heading toward Wal-Mart's distribution model.
In the past Mr. Kovacevich has said he leans toward the free-market approach of breaking down the barriers between the two industries. But on Monday he remarked, "Our view is, if we cannot be in the commercial business, then it is appropriate that commerce not be in the finance business."
He added, "Most retailers are getting into this business through loopholes."
He said he doesn't expect the wall between the two industries to topple anytime soon.
In the near term, "I don't think we are going to see what I would call radical and complete allowance of commerce in our business," he said. "I think on the fringes it's going to continue to happen, until it becomes so pervasive that Congress starts closing some of these loopholes."
Life After B of A
Bank of America Corp. alums are beating a path to the world of private equity.
Hugh McColl Jr. and Marc Oken are the latest former Bank of America executives to start their own company.
Mr. Oken, who retired as the chief financial officer at B of A in September, is now the managing partner of Falfurrias Capital Partners LP. Mr. McColl, who was the longtime chairman and CEO of the Charlotte banking company before retiring in April 2001, is also a partner in the firm, which is also based in Charlotte.
Mr. McColl has some private equity experience, but for Mr. Oken it's a new area.
In an e-mail Wednesday, Mr. Oken wrote that Falfurrias has been in business for three months and is halfway toward a goal of raising at least $85 million to invest in the United States. He said the fund will focus on companies with $50 million to $75 million of equity value and with "some financial concentration."
Falfurrias, by the way, is the name of a small town in Texas where the two men often hunt.
Mr. Oken's predecessor at B of A, Jim Hance Jr., joined Carlyle Group last summer six months after his retirement.
