3 at Palley-Needelman Leave to Form Rival

A trio of principals at one of Southern California’s largest investment management firms bolted from the firm Friday to form a rival company.

The three left Newport Beach-based Palley-Needelman Asset Management Inc., a nearly $5-billion portfolio manager whose clients include basketball bad boy Dennis Rodman, to form a subsidiary of Metropolitan West Securities Inc., a Los Angeles investment firm headed by former state Treasurer Thomas Hayes.

The new unit, to be called Metropolitan West Capital Management, will open next month and compete with Palley-Needelman.

Under former Palley-Needelman executive Steve Borowski, who will be managing partner, the new MetWest operation will specialize in investment management for institutions and wealthy individuals.

Gary Lisenbee will be president of the new company and Howard Gleicher will be chief investment officer.

Palley-Needelman co-founder Roger Palley declined to comment on their departure from the company he and partner Chet Needelman began in 1985.

The company now is the largest independent investment manager in Orange County and one of the larger such firms in the state.

It handles investments for numerous corporate and private clients, including the Orange County Performing Arts Center, Chrysler Corp. and Rodman. It’s unclear how many, if any, clients the departing executives are taking with them.

Borowski said the split was prompted by an attempt last year to sell Palley-Needelman to Boston’s United Asset Management. The deal fell through, but the three felt their futures were uncertain, he said.

Borowski, who once pitched for the Milwaukee Brewers, joined Palley-Needelman at its inception and eventually became managing director of marketing and client services.

Gleicher joined the company in 1988 as a member of its investment committee.

Lisenbee, a 25-year industry veteran, was Palley-Needelman’s senior portfolio manager.

MetWest’s Hayes was hired by Orange County in 1995 to help liquidate the bankrupt county’s riskiest investments.

He later was retained to oversee a $50-million investment fund the county set up to finance litigation against Merrill Lynch & Co. for allegedly precipitating the county’s 1994 bankruptcy--the largest municipal failure in history.