Billionaires and millionaires in the US are arranging loans to have funds readily available so they won’t have to sell off investments in the event of an economic downturn, according to Jim Steiner, head of Wells Fargo & Co’s ultra-high-net-worth business.
“They always want to have lines in place for if markets do turn down and they get capital calls on private investments,” Steiner, who leads Wells Fargo’s Abbot Downing unit, said last Monday in a television interview.
“They want to be able to make those capital calls through use of the line as opposed to basically selling equities in the public markets.”
Steiner has expanded Abbot Downing into a $43 billion (R595bn) business since the brand started in 2012, and lending has increased by 5percent in the past year, according to a spokesperson.
Jon Weiss, head of Wells Fargo’s larger wealth and investment-management arm, said earlier this month that he plans to combine Abbot Downing with Wells Fargo’s private bank, which serves clients with at least $2.5 million, under one leader as part of his quest to streamline operations since taking over last year.