Wetherly Capital emerging as leading fund placement firm.

The intersection of business and politics has been a profitable one for Dan Weinstein, managing director of Wetherly Capital Group.

The Brentwood firm has emerged as one of the top 10 placement agents in the United States, raising $1.5 billion from large pension funds like the California Public Employees' Retirement System.

Placement agents are politically connected matchmakers who help hedge funds, private equity firms and real estate funds attract investments from public and private pension funds.

Weinstein, one of three managing partners at Wetherly, has raised money for nearly a dozen private funds, including Ares Capital Management, Freeman Spogli & Co., billionaire Ron Burkle's Yucaipa Cos. and Aurora Capital Partners, whose founder, Gerald Parsky, led President Bush's reelection campaign in California.

Weinstein has been a longtime Democratic fundraiser, working for former Gov. Gray Davis and former dtate Treasurer Kathleen Brown. But he says he's strictly non-partisan.

"If we think a firm has a strong team and an impressive track record and investment strategy, then we can believe in them," he said. "With so much competition out there, all of these funds are competing for money and they need someone who is going to advocate on their behalf."

Independent placement agents are the underdogs in a field long dominated by investment banks such as Merrill Lynch & Co. and Credit Suisse First Boston. But they have made progress in the past five years, as pension funds change their investment mix. The funds are reducing their exposure to stocks, where Wall Street firms have an advantage, while increasing investments in alternative asset classes like real estate.

A survey of 125 global pension fund managers by consulting firm Watson Wyatt found that investments in private equity, which includes real estate and hedge funds, jumped 14 percent last year to $17 billion. Private equity funds now account for $193 billion of pension fund assets, or 19 percent of the total $1 trillion invested in alternative asset classes.

Sean Harrigan, who was ousted as president of Calpers' board last year, said placement agents have taken over the job of marketing private equity funds, leaving the critical work of investing the assets to the general partners. "They can be an asset for the (pension) staff who are doing due diligence and screening various proposals," he said.