Giuliani's portfolio is full of dogs
The Republican presidential hopeful and former New York City mayor has way too many dogs in his portfolio. He's rich, but he's not making his money work for him. By Tim Middleton
If Rudolph Giuliani does succeed in his bid for the presidency, one of his first tasks will be to pick the advisers who will help him run the country.
Let's hope the Republican presidential hopeful would do a better job picking that staff than he did picking his financial advisers.
Two prestigious firms, Merrill Lynch and Bessemer Trust, have foisted a wretched set of mutual funds on the most public hero of 9/11. His holdings for 2006 are reported in a filing with federal election officials.
The document, which accounts for holdings in broad ranges rather than specific dollar amounts, shows investments held by the former New York City mayor and his wife, the former Judith Nathan, worth between $12.7 million and $44.5 million. His income last year was $16.8 million, two-thirds of that from speaking fees. If he does become president, he'll take a sizable pay cut, as the country's chief executive receives a salary of $400,000.
Giuliani's portfolio is designed to produce income and protect his wealth, not enhance it. Three-quarters of his assets are in cash, taxable and tax-free bonds, and balanced and bond mutual funds. His equity holdings could be as little as $3.1 million or as much as $9.9 million.
They are spread across the usual choices, from large to small to international. They include modest positions in a few common stocks and decent mutual funds from Fidelity Investments and Vanguard Group.
But a large fraction of Giuliani's assets are in the worst funds he could pick.
A family of laggards
Among Giuliani's largest accounts are several at Bessemer Trust, a white-shoe money manager that traces its roots to the family office of a founder of Carnegie Steel. It manages $50 billion on behalf of 1,800 families, most of that in private accounts.
For customers who can't meet its minimums, Bessemer offers its own friends-and-family group of mutual funds under the Old Westbury brand. Giuliani owns all seven of them.
The candidate has more than $1 million in each of two Old Westbury funds, Municipal Bond Fund (OWMBX) and Large Cap Equity (OWLCX). His wife has positions in each of those funds of between $250,001 and $500,000.
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