Ex-Nomura Superstar Joins Kennedy-Wilson

Ethan Penner, a former Wall Street superstar whose powerful real estate finance operation came crashing down after massive losses, has been named president of Kennedy-Wilson Inc., the Beverly Hills firm said Wednesday.

The real estate services and investment company said Penner, in the newly created position of president, will be responsible for planning, developing and directing the company’s various businesses, including property management and managing investment funds.

Kennedy-Wilson executives have “built an excellent, entrepreneurial platform to which I look forward to making a significant contribution,� Penner said in a statement. He was not available for additional comment.

People familiar with Penner, who reportedly once earned an estimated $45 million a year when he worked for Japanese financial giant Nomura Securities Co., were surprised that he had accepted a post at such a relatively small and low-key firm as Kennedy-Wilson. Company officials declined to reveal his salary.

During the early 1990s, Penner emerged as a key player on Wall Street and in real estate finance by aggressively expanding the use of commercial mortgage-backed real estate securities, essentially pools of real estate loans that were resold to investors as high-yielding securities. The securities proved popular and provided real estate developers and investors with a major new source of capital.

In addition to his financial savvy, Penner also was known for throwing huge and costly parties modeled on the Predators’ Ball hosted by junk bond financier Michael Milken during the 1980s. Penner hired such well-known music stars as Don Henley and Joni Mitchell to perform at his events.

The market for Penner’s securities suddenly collapsed in mid-1998 as a result of a worldwide financial crisis. Nomura was stuck with real estate loans that it couldn’t resell as securities and that were plunging in value. Penner resigned in September 1998. Soon after, Nomura Holding America Inc., the company’s U.S. subsidiary, reported a loss before taxes of nearly $1 billion, much of it stemming from its real estate operations.

Penner has since been involved in a variety of ventures, including Silicon Valley Internet firms and investment advisory work.

Kennedy-Wilson Chairman and Chief Executive Bill McMorrow said the former Nomura executive will prove valuable in expanding the company, which recently completed an initial public offering involving its Japanese operations. Penner also could play a key role in growing the company’s fund management business, which teams the company with institutional investors to buy property as well as distressed debt.

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Shares of Kennedy-Wilson rose 37 cents to $5.87 on Nasdaq.