Foley’s Push to Diversify Firm Continues : Acquisitions: Prominent title insurance industry leader wants to make his Fidelity National Financial less dependent on volatile real estate market.

William P. Foley II, directing a hostile takeover of an Orange County insurance carrier, has acquired large minority stakes in two other unrelated businesses as he continues to diversify his title insurance company.

Late last week, Fidelity National Financial Inc. acquired a 33% stake in McFarland Partners investment advisers in San Francisco in addition to the previously announced purchase of a 31% interest in Micro General Corp. in Santa Ana.

The buying binge is part of Foley’s efforts to diversify Fidelity, the nation’s fifth-largest title insurer, so that earnings rely less on the volatile real estate market. Title insurance covers claims against a policyholder’s ownership of real estate.

Within a few years, Foley said, he wants half of Fidelity’s earnings to come from non-title insurance operations. A big chunk of that could come from US Facilities Corp., a Costa Mesa medical stop-loss and property and casualty insurer.

Fidelity is waging a $79-million hostile takeover bid for US Facilities and has won a shareholder vote to put US Facilities up for sale. It also has won two seats on the US Facilities board of directors, but the corporation has sued to overturn the election. The suit is pending.

McFarland Partners was formed Thursday when Victor McFarland acquired the Mellon/McMahan Real Estate Advisors Inc. subsidiary of Mellon Bank in New York. McFarland has been a real estate adviser to managers of investment portfolios, including the California Public Employees Retirement System. He helped engineer CalPERS’ share of the $100-million purchase of the Galleria at South Bay mall in Redondo Beach two years ago.

Fidelity provided McFarland with a $4.5-million loan to help with the purchase of Mellon/McMahan and received its stake as part of the deal. The loan, carrying a 10% interest rate, is to be repaid over five years.

“I met Bill Foley about four months ago and was impressed with his views,” McFarland said. “I think we’re going to be great partners.”

McFarland said he had many possible partners ready to lend him money but chose Fidelity because it was the only lender looking for an ongoing relationship with an ability to help the company grow.

Foley said he will help McFarland Partners expand through acquisitions of other portfolio advisers and the creation or purchase of property management firms. He said he also hopes that the company will add to Fidelity’s core operation, title insurance, though Fidelity would have to compete for that business.

Last Friday, Micro General announced that Fidelity had bought 31% of its stock from two venture capital investors. Foley said Monday that Fidelity paid $750,000 for the stock and hopes to steer the maker of automated post office equipment toward a number of technology opportunities wholly unrelated to title insurance. He declined to be more specific.

Foley rose to prominence in the title insurance industry by leading his company to fast growth while keeping costs low. But he became familiar to the general public last fall when, as a private investor, he led a group of investors that bailed hamburger magnate Carl N. Karcher out of financial trouble. Foley since has become chairman of Karcher’s Anaheim-based company, which on Monday was renamed CKE Restaurants Inc.