Lorenzo Esparza describes what it's like to manage assets for celebrities
Lorenzo Esparza, CEO of Manhattan West, is behind the growing wealth of many of our favorite musicians, athletes and celebrities. He won’t tell you who, however. That’s because Esparza — a son of Mexican immigrants who spent seven years working in film production at Paramount Pictures — is a class act. His firm is different from traditional wealth managers in many ways. Manhattan West provides clients access to exclusive alternative investments — including private equity, venture capital, real estate, private credit and private debt, in addition to equities and fixed income. Esparza talked about his white-glove-service approach to clients and his unique position in this fascinating world.
Describe your Hollywood clientele. Are we talking about famous actors?
We always want to be respectful of our clients' privacy, so we don’t name-drop clients. Having said that, we work with notable names in music that are globally recognized. We have clients from the world of sports, notable names in the NBA and NFL, to give you a couple of examples. Since we are based in Los Angeles, we work with actors and profit participants in the entertainment space. I think we have a good understanding of the industry, so we are well-suited to handle clients in that sector. Our tax and business management teams have been recognized by The Hollywood Reporter and Daily Variety.
How is wealth management for a celebrity different from a "regular" wealthy person?
I think there are more similarities than there are differences, but there are certainly nuances. In most cases, it’s related to the manner in which the talent receives their income. Profit participations have changed as new distribution channels have proliferated. Production has dispersed. A lot of what used to happen exclusively in Hollywood is now being done in other parts of the country, like Nashville and Atlanta. And in some cases, it’s gone international to Canada.
I would say the difference is that you need to think about multistate tax filings. In sports and music, you have artists and athletes performing all over the country, so you have to account for that. In music, we’re seeing catalogs get sold. Musicians are selling their publishing, which was unheard of 20 years ago. You have liquidity events that occur now, and artists need planning around how they invest that capital.
What are some of the unique needs you've had to work through with clients — any crazy stories?
I hate to be boring on this answer, but we are fairly corporate in how we deal with clients. I would say that we have spent time at the film and music festivals, and those can be very different from a day at the office. We do what we need to do. In terms of the needs, we have some athletes with interesting requests. We have some music clients who have interesting handlers around them that can create challenges.
What are your predictions for the future of family office investments?
I think you’re going to see more family offices emerge. It’s become in vogue for families of means to have their own family office. Years ago, you just didn’t see it as much. Now with tech and platforms, families are wanting to take more control of their financial affairs. I also think you’re going to see more proprietary investments. We look at a number of investments every year. We are seeing family offices back and lead deals more than ever before. I am not sure that is a good or bad thing, but it’s certainly happening.
Lightning round: Why do you love this job? How did you end up here? And what are the best and most challenging parts of it?
For as long as I can remember, I was always fascinated by the capital markets. I started watching CNBC as a kid, and I always felt attracted to it. I was raised in a modest-income household, which is code for saying we were poor. I imagined a different life, and through the markets, I saw a means of earning a living. My parents encouraged my brother and I to go to law school or medical school. That was their concept of upward economic mobility.
Today, my brother is a physician, and I went to law school. I knew right away I didn’t want to practice law, so I pivoted to financial services and joined Bernstein here in Los Angeles. I was at JPMorgan when I decided to launch Manhattan West, and I’ve never looked back.
I worked through the financial crisis and the failure of Lehman [Bros.], Bear [Stearns] and Countrywide. And of course the COVID crisis. Those were challenging times. In those moments, frankly, I was worried about everything. We went through COVID while here at Manhattan West, and that was probably the hardest period of my professional career. We survived it and have had our best years since, but I remember the anxiety and fear in those days.
The guy staring back in the mirror has more gray hair today as a result. But I firmly believe those challenges are what make you better. In the strangest way, I am glad we went through it.