Money managers cash in on lack of LV-area competition

Phil Levine

Thursday, Dec. 2, 1999 | 11:13 a.m.

Ted Schlazer and Bob Kasner say their mutual commitment to money management is unyielding at Paragon Asset Management.

As co-owners of the Henderson firm, Schlazer and Kasner share a commitment to high yields and strong returns evident in the company's growth: three years after opening for business, Paragon currently manages more than $250 million in assets.

Portfolio management is available to clients with at least $200,000 to invest; corporate accounts, with an average minimum of $1 million, constitute about half of Paragon's 80 clients.

Both partners attribute their success to a unique professional relationship, perhaps best described as a financial yin and yang. Playing off each other's strengths, Schlazer and Kasner each possess professional attributes garnered from divergent backgrounds.

"I'm the eternal bull while Ted is the permanent bear," says Kasner. "My background includes more than 14 years (financial experience) in local government, whereas Ted had about a dozen years of Wall Street experience in fixed incomes. Our skills and views really do complement each other."

Schlazer, an experienced bond trader, says he left Wall Street feeling burned out. During his time on "the Street" Schlazer managed more than $2.5 billion in bond portfolios. After leaving New York, he landed in Las Vegas and spent two years as a money manager at the former First Interstate Bank of Nevada. When that bank was scooped up by Wells Fargo, Schlazer entered into his own financial merger with Kasner.

Sensing a growing regional demand for skilled money management -- and a dearth of local talent -- the future partners found their niche.

A well-known presence in Henderson's financial community -- he served as the city's finance director, as well as accounting director for the Clark County School District -- Kasner brought with him the prerequisite local knowledge and connections.

"We went from zero to $90 million (in assets) in under two years," says Schlazer. "Bob was well-known and trusted in the area, and together we were able to offer clients considerable expertise. We also made clear the difference between us and stock brokers, in that they sell you stock. We don't work for Merrill Lynch and so we're not out to sell you their products."

In addition to their contrasting experience in the public and private sectors, each partners' knowledge base reflects his money management background.

"My focus is on the bond market," says Schlazer. "I usually direct clients to high yielding bonds such as U.S. Treasury or tax-free municipal bonds. Our retail clients tend to be conservative investors who aren't looking to take big risks to make huge returns."

Paragon's clients also include large government entities such as Clark County, the City of North Las Vegas and the City of Las Vegas' Housing Authority.

Still, the company does not overlook the lucrative world of stocks. As Paragon's stock guru, Kasner continues to see opportunity in the volatile market.

"You've got to like sectors such as high-tech and pharmaceuticals," he says. "Financial stocks have lagged this year, but we're seeing considerable improvement in that sector too." Kasner points to his recent experience with Chase Manhattan stock as illustrative of the need for long-term perspicacity.

"We've owned Chase for about three years, and bought it when it was around $30," he says. "We watched it rise up to about $80, before seeing it drop to the thirties again last month. It recently closed around $60, and now its hovering back up around the eighties again.

"What we try and emphasize to clients -- and it's not always easy -- is that you make money buying stocks when they're down. There's a tendency among some people to react to market declines by saying 'get me out, sell, sell!' and that's a reaction you have to resist."

Despite recent interest rate hikes, Kasner sees no reason to mitigate his bullish market position.

"The fact is if you were to draw a five-year chart, interest rates are exactly where they should be," he says. "The biggest economic risk now is the current debt level. If you want to look for any potential red flags, I'd say watch the default rates. If they rise rapidly, that could be a sign of a forthcoming downturn."

Despite a metropolitan population approaching 1.3 million people, Las Vegas is far from a center of money management; Schlazer and Kasner say a lack of local competition has helped their company succeed.

"The only competition we have locally would be the private bank arm of Wells Fargo and Bank of America," said Kasner. "And we've only run into that a few times. The type of retail money management we offer is really not available in this area. That's one of the reasons we decided to start this company, to capitalize on that niche market."

In fact, Paragon's money management reputation is strong enough to attract even those well-versed in financial matters; the company's recent clients include Silver State Bank and Valley Bank.

"The banks told us they see monitoring the markets and managing portfolios as a full-time job," says Schlazer. "They decided it was more advantageous to outsource to a professional company that had the time and expertise needed."

That attitude came as no surprise to Schlazer, a 20-year bond market veteran. He believes in the adage about no substitute for experience, particularly in the world of money management.

"The fact is there's no 'bond trading 101' at UNLV," says Schlazer. "But proper training and experience in understanding the market really is vital. Both Bob and I are certified public accountants, and that's also a must for a successful portfolio manager."

One speed bump on the partners' road to success is their ability to market their firm; providing a unique service also requires unique salesmanship.

"We've really relied on word of mouth to grow the company so far," says Kasner. "One reason is that it's tough to find someone who can understand what we do and adequately explain that to potential clients."

Marketing has recently been stepped up and continued growth remains their goal. Both partners are confident of future success.

"We have several options in how we can grow the company," says Kasner. "We could partner with somebody else, or continue to grow on our own. In addition, we expect to have new bank clients onboard soon. That's a market we are looking to expand in."

Adds Schlazer: "The truth is we didn't have a clue when we started where this (company) would go. I'm reminded of that when people ask us about our future plans. For now, we just plan to grow our business by doing what we do best."