Reaction to Article on O.C. Arbitrage
The Times recently published an article concerning arbitrage and associated opportunities afforded the “lone investor.” (“Broker Offers Lone Investors Chance to Join in Arbitrage,” Jan. 22.) The article is of personal interest, and I would like to comment on some of the conclusions drawn by the writer (Eric Schine).
While portraying risk arbitrage adequately, the article contains a number of misleading statements. Mr. Schine writes that “what is novel about Newport Securities’ arbitrage operation is that it is intended for retail customers.” Newport Securities’ approach is hardly novel. Beaumont & Co. was founded in 1979 for the sole purpose of conducting arbitrage investments for retail customers. In fact, it was the only recognized specialized arbitrage firm in Orange County until I left Beaumont & Co. and joined Newport Securities in early 1986 and set up an arbitrage operation.
I have subsequently rejoined Beaumont & Co., which now manages in excess of $20 million in managed arbitrage portfolios, by far the largest in Orange County.
Mr. Schine also quotes a Lipper Securities analyst, who says “none of the large Wall Street brokerages offer special arbitrage services for individual investors.” This statement is somewhat misleading. I personally know of at least one very well-known Wall Street firm that manages funds for individuals on a retail basis, an activity separate from their management of capital committed by the firm and various partnerships.
Furthermore, at least one other firm, to my knowledge, manages substantial arbitrage capital for individuals and institutions alike in the Southern California area.
While I appreciate the public being offered informative articles concerning risk arbitrage, I also feel the Times should provide a fair and accurate portrayal of those in the local community that offer expertise in the subject matters being addressed.
RICHARD L. DIXON
Senior vice president
Beaumont & Co.
Newport Beach
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