Taking Over.

Veteran investment banker Scott E. Wendelin, soon to be ensconced in new quarters in the Water Garden office complex in Santa Monica, has quietly assumed duties as head of investment banking for regional brokerage Sutro & Co. Inc. He will also take a board seat at the parent company, Boston-based

Like many other investment bankers, Wendelin finds himself and his troops more active today in private debt and equity markets than in initial public offerings or other public issues, the traditional domain of securities firms.

"Our business mix has changed dramatically," Wendelin said. "Four years ago we were weighted heavily toward public offerings... Our model today is one of raising private equity and debt for private and public companies."

Even mid-cap and small-cap public companies often find it expedient to turn to private equity, an arrangement sometimes called PIPE, or private investment in public equity. In a PIPE, a large block of unregistered stock might be sold to one or several large investors, usually at a per-share price a few ticks below the current public trading price.

Along those lines, Wendelin recently helped underwrite a $10 million private placement of shares in Digital Lava hc., a Nasdaq-traded company with a market cap of $25 million that develops streaming videos for use on the Web.

While Wendelin has his 14 investment bankers deep into the tech world, he is also high on Old Economy companies, including real estate investment trusts. He said REITs such as West Los Angeles-based Arden Realty Inc. are having banner years, and that income producing stocks may have a good run ahead. A key reason is that America's investors are aging (think income), and federal surpluses may lower yields on Treasury bills -- or even eliminate federal debt from public markets.

Relatively safe REIT stocks offering 9 percent dividends might start to look pretty sexy in just a few years.

Contributing columnist Benjamin Mark Cole writes about the local investment community for the Los Angeles Business Journal.