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September 12, 2002
Wells Fargo to Acquire Silicon Valley Investment Boutique with SRI Expertise
    by William Baue

Wells Fargo recently inked an agreement to acquire Nelson Capital Management, an award-winning private money manager that specializes in socially responsible investing.


Earlier this summer, Wells Fargo and Company (ticker: WFC) signed a definitive agreement to acquire Palo Alto-based Nelson Capital Management. Nelson Capital is an investment advisory firm that offers socially responsible investment (SRI) services to high net worth clients. The firm manages approximately $600 million for more than 400 clients, predominantly from the Silicon Valley region of northern California. Wells Fargo Private Client Services, the division of the diversified financial services company that will absorb Nelson Capital, manages $134 billion in assets, including $38 billion for high net worth individuals.

"The size of the acquisition is not what's important. It's the strategic fit," Daphne Larkin, senior vice president of public relations for Wells Fargo Private Client Services, told SocialFunds.com. "By partnering with Nelson Capital Management, we increase our presence in the Silicon Valley and we amplify our investment management expertise in the area of socially responsible investing."

Nelson Capital customizes its services according to client preferences, according to Socially Responsible Investment Services and Research Director Carol Malnick. The company uses a comprehensive questionnaire to help clients define their social priorities. Nelson Capital employs over 30 screens in the categories of community relations, environment, military/defense, employee relations, international issues, women and minorities, and company products or services.

Business Ethics magazine cited this detailed questionnaire as a primary reason for granting Nelson Capital its 2001 Private Money Manager Award. Business Ethics also lauded Nelson Capital's use of both exclusionary and supportive screens, which helps the firm avoid poor social and environmental performers while supporting socially and environmentally progressive companies.

Nelson Capital's social priorities could be a boost to Wells Fargo's internal commitments to corporate social responsibility (CSR). While KLD Research & Analytics rates Wells Fargo's employee relations as a "strength" because of its promotion of women and minorities, it notes that Wells Fargo has been involved in community investment controversies regarding the Community Reinvestment Act.

Nelson Capital offers diverse investment vehicles, including growth-oriented equity and intermediate-term fixed-income securities. The firm manages both the Nelson Capital Socially Responsible Equity Portfolio, a composite of all-equity portfolios, and the Nelson Capital Socially Responsible Balanced Portfolio, a composite of portfolios with a fixed asset allocation of more than 20 percent. Ms. Malnick told SocialFunds.com that approximately 15 to 20 percent of the firm's clients choose to apply SRI strategies to their portfolios, which represent about $110 million in assets managed.

Business Ethics recognized Ms. Malnick's SRI experience in creating award-winning services. Ms. Malnick has also been a member of the Social Investment Forum (SIF) for a decade. Furthermore, the award cited her service on the board of the Northern California Community Loan Fund as indicative of her expertise in community investing.

 

 
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