Villalobos more than your average financial expert

11/20/2009 - By: John Trent

A.J. Villalobos spent a large part of Tuesday in the College of Business, first speaking to Professor Sheri Faircloth’s Finance 307 course, then delivering the keynote address as part of the college’s annual Executive Speakers Series.

It was easy to see why Villalobos’ life has been such a resounding success, and why others have benefitted from his knowledge and generosity. As a private investment banker for more than 30 years, Villalobos has led a career notable not only for its many milestones but for its breadth.

At various times in Villalobos’ professional life, he has served as a Trustee of the California Public Employee Retirement System (CalPERS) – with an investment portfolio of more than $220 billion, CalPERS is the country’s largest Defined Benefit Retirement Fund – as well as Deputy Mayor of Economic Development for the City of Los Angeles, and Chief Strategist for the private fund group Donaldson, Lufkin, & Jennrett Securities Corporation of New York.

Currently Villalobos is Chairman of his own private company, ARVCO Financial Ventures, LLC. He’s considered an expert in the field of Alternative Investments, Asset Allocation, and Mergers and Acquisitions.

And yet, all professional accolades and accomplishments aside, perhaps the most impressive thing of all about Villalobos, a compact, dark-haired man with equally dark, trouble-free eyes and a nimble, friendly smile, is his family. Business has always been part of his DNA. He can trace his roots of his current business, ARVCO, to the small southern California grocery store that his family founded more than 100 years ago. His grandfather lived to be “99 years and nine months and he ran the business until the day he didn’t wake up. We’ve always been in some sort of business.”

If there is a unifying element to all of the success for Villalobos or for the many members of his family, it has been the premium each one has placed on education. By his own count, Villalobos says that there are 11 attorneys, 12 doctors and more than 30 teachers among his brothers, sisters and cousins. All three of Villalobos’ children are college graduates, and his three granddaughters are currently in college.

“I’m the youngest of 54 cousins,” Villalobos says, “but I always remember discussing college in my family, even when I was a little kid. For me, it wasn’t whether I was going to college. It was what college we were going to go to.

“I think that with education comes reasonableness, understanding and compassion.”

It was clear Villalobos was in his element on Tuesday, whether it was enjoying the challenge of probing questions from Faircloth’s class, or in sharing his thoughts on why capitalism should matter to all Americans, and why we are a much more charitable and giving society than what many might first think.

During a half-hour discussion with Nevada News in the office of College of Business Dean Greg Mosier, Villalobos shared this and more.

Nevada News: You talked earlier today in Sheri Faircloth’s 307 course. What did you discuss?

A.J. Villalobos: We are dealing with junior and senior students, who are interested in understanding asset classes. They are very familiar with stocks and bonds, which 90 percent of the world understands. But we were talking about an asset class which the rest of the world doesn’t often understand, illiquid assets, called alternative investments. I was very impressed by the class. There were 50 or 60 of them, and they were extremely focused. They were very courteous and respectful. I have spoken to probably 20 or 22 business schools around the country, and this was a very focused group. Their questions were very specific, which was also very impressive. I enjoyed that.

NN: For this evening’s event, what are you going to discuss?

Villalobos: I realize it’s an Executive Speakers Series, but I don’t like to lecture. I like to have conversations. So I’m going to raise issues and see whether or not the audience gets engaged. Right now I think capitalism is a very important issue, and I have some statistics to share with everyone. I’ve concluded that the American public is generally kind of confused about what capitalism is, or isn’t. They’re also confused about other political theories, like socialism. What I’ve learned over time is that the more engaged you are, the more you read, the more you pay attention to the serious issues, the more informed you are as a voter. And that makes a huge difference.

NN: Given the events of fall 2008, when the country’s financial system was on the brink, it seems that people are thirsting for financial and business knowledge right now, perhaps more than ever before. Does it present an opportunity for people in your business, or people in Dean Mosier’s business?

Villalobos: I do believe that the political class is in for a big shock. Because of the instant knowledge available through the Internet, and the incredible ability for young people to access data almost instantaneously … the ability to check information and the veracity of that information … this is something that has not existed before. I’ve heard a lot of parents complain about Twitter, Facebook and MySpace, but the truth of the matter is that is just a side phenomenon. What really interests me is the tremendous amount of data available for anyone to check or read or learn instantly.

Now, I’m a dinosaur. I don’t send email. But I do read a lot. Some of my colleagues are data-overload freaks. Their phone buzzes and they’re on it. Immediately. And I just hope it doesn’t make them anti-social (laughs).

For Greg’s business, let me tell you how this has changed everything. A professor can now be checked by his or her students, instantly. The moment a statement is made in class, and before class is over, a student can say, ‘Well, the statement you made earlier wasn’t exactly correct.”

It’s a multi-edge sword. Access to all of this instant information has a tremendous amount of good, no doubt. But whether or not people learn manners and remember that other things are going on, is another thing. They need to be careful that they don’t become – what has someone called them? – ‘Twitter-nators’ (laughs).

NN: You went to Whittier College in the 1960s as an undergraduate student and business school at Pepperdine. How has business education changed?

Villalobos: There was no instant data. You couldn’t compare, and everything was traditionally assigned. The data-gathering process was much more laborious then. In the old days, you might read four or five books before writing a report. Now you can access 50 or 60 books on the same subject, and include data points from different countries. It’s just amazing. It’s whether or not you can digest the data and comprehend it in relation to your view of a particular subject that becomes important.

NN: You are Trustee at Whittier and have for many years been involved with the advancement of higher education in this country. Why has this been important to you?

Villalobos: I come from a family where education was very important. We have 11 lawyers, a dozen doctors, and probably 30 teachers. Our family is very college-oriented. Above all, I remember discussing college when I was a little kid. I’m the youngest of 54 cousins, but I remember having dinner or lunch and I remember hearing discussions about what my cousins were going to do, and what college they were going to. For me, it wasn’t whether I was going to college or not. It was what college we were going to go to.

Two of my children are lawyers, one wants to be a professor and is still in school. My three granddaughters are all in college. I happen to believe that the more knowledgeable the population is, the better it is for the society at large. I think that with education comes reasonableness, understanding and compassion. While you can get those things without an education, generally it’s hard to have the understanding of why these things matter unless you’ve delved into a great education.

We are also big givers. We also give as much as we can to the things we believe in.

When you look at the statistics for global giving, you’d be shocked at how generous a people we Americans are, compared to other nations. Do you know that we give almost five times more than the rest of the world combined? Think about it. Last year, we gave $308 billion. The nearest country, United Kingdom … Great Britain, gave $18.7 billion. You’d be shocked how many countries give nothing. For example, Russia gives next to nothing. The American people are very generous souls … it’s just amazing.

NN: Is it because we are a nation of immigrants and we are thankful for what the country has given us?

Villalobos: No, it’s because we’re a nation of capitalists. We have the resources, so we can give. Other countries that are building their resources are learning to give, but that’s different than the American experience. We are the givers. We’re teaching the rest of the world to share.

Even though our disposable income is not that far ahead of the next four or five nations, our giving is 10 times what they give. It’s kind of hurtful to me to read about so-called ‘greedy capitalists’ and ‘greedy wealthy people’ because I don’t see it. I see successful, wealthy people trying to figure out how they can give more. These are the people I know.

When you stop to think about it, why does America have the greatest higher education system in the world? Because of the givers. If it wasn’t for the givers, there would be no Harvard, no Yale, no Princeton, no Stanford, no Whittier … you can go on and on.

NN: Greg, having a speaker like A.J. on our campus, how does that help your college?

Mosier: We really want A.J.’s message to resonate with the community because he lives what he’s talking about. People throughout the history of our country have pulled themselves up by their bootstraps and have worked hard, and capitalism has been an important part of that story. These people have gone out and made it on their own … and then they’ve turned around and helped the guy behind them. It’s the kind of message that we need to reaffirm in our community and our country, and maybe we should re-embrace some of these values.

Villalobos: And I’m not saying capitalism should have a free rein … oh no, no, no. You have to have regulation and control and you have to have laws. However, it’s very important to keep it balanced. Because you do not want to destroy the incentive. If you destroy peoples’ incentive to do well, or to do better, or to do something no one else have ever done, then why would they ever do it?

NN: You sound like quite the optimist.

A.J.: I am an optimist. It doesn’t mean we don’t have our bumps in the road, but I’m definitely an optimist. I’m a great believer in the generosity and the commonsense of the general American public.


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