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Wealth Management
Opportunities in Uncertain Times
A depressed stock market holds profits for investors who can overcome their fears.
There’s still pain
to come in the banking sector. 
Andrew Mehalko
GenSpring Family Offices (an affiliate of SunTrust)
Chief investment officer, Jupiter
Assets under management: $15 billion
Minimum investment: $10 million
What he likes: Equities now make up less than 30% of the firm’s total portfolio — “the least amount of exposure we’ve had in public equities in the history of the firm,” he says. Mehalko recently invested $100 million in attractive assets purchased from banks that are being forced to sell to meet capital requirements. Those include delinquent mortgages too big to be sold to Fannie Mae, Freddie Mac or HUD, which he is selectively buying for 40 cents to 60 cents on the dollar. He’s also buying senior capital structure bank loans at a discount and is lending to small, middle-market companies having a hard time getting bank financing.
What he doesn’t like: S&P 500 overall; Asia in general, particularly China, but he does believe that Japan’s equity market will be one of the first worldwide to rebound; high-yield debt; commodities.
Tax strategy: Don’t trade tax efficiency for investment returns, Mehalko says. Municipal bonds offer some appeal, but there’s no reason to rush in. Master limited partnerships (typically in the energy field) can be tax-efficient.
