Why exactly a $1-billion LPL advisor thinks he's the guy to buy and turn around the Phoenix Coyotes?

Brooke’s Note: I get where Darin Pastor, grandson of the owner of an American Hockey League team that won the Calder Cup, is coming from in risking so much on a hockey “opportunity.” My father was team doctor for the Maine Mariners when they won the Calder Cup a couple of times in the late 1970s. It was a team with players like Wayne Schaab, Dennis Patterson (captain), Pete Peeters, Rick St. Croix, Paul Evans, Robbie Moore, Blake Dunlop, Al Hill, Terry Murray, Rudy Tajnar and Guy Delparte. The trainer was Sudsy Settlemeyer and the coach was Bob McCammon. Bringing sports glory to a small town that sees precious little of it beats winning the Stanley Cup. Pastor gets it that this effort at ownership of the Phoenix Coyotes might not work out. But he likes his chances — especially if he can get a few quality shots on goal.

To some people the Phoenix Coyotes may look like a bankrupt, ragtag ice hockey team in a Sahara-hot American town with an are-you-serious nine-figure price tag.

But to Darin Pastor, 42, it looks like a way to carry on a family tradition and make a nice return on investment for his trouble.

The CEO of Capstone Affluent Strategies Inc., based in Irvine, Calif., has close to $1 billion in assets under advisement. Capstone, an LPL-affiliated RIA, was started in October 2012 with Pastor and five other advisors bringing in $450 million in AUM. Pastor had been a managing director at Prudential Financial Inc. since early 2011 and was previously a senior vice president at JPMorgan Chase & Co., where he ran the Southern California retail market and says he was the top producing senior investment manager in 2009, 2010 and 2012. Prior to that, he owned American Mortgage Affiliates and the Pepsi-Cola Buffalo Bottling Corp. See: LPL adds a $1-billion firm with a family-office mindset and CPA rep base to its growing list of OSJs.

And, now, with a group of investors, Pastor wants to buy the Phoenix Coyotes of the National Hockey League.

“We’re not afraid to bite off more than we can chew,” he jokes after blasting out a press release Friday that announced his intentions both to the media and to the NHL. He is, reportedly, taking meetings this week with the NHL and with the city of Glendale, Ariz., to hammer out a deal. The league has been asking for $170 million to purchase the team.

11 offices, 65 advisors

Pastor, who calls himself a “serial entrepreneur,” lives by the motto, “less talk, more action.” He opted to leave Prudential and start his own RIA because he felt limited by the corporate firms’ sales models and packaged products.

“We couldn’t do what we wanted selling proprietary packaged products,” says Pastor. And, names such as JPMorgan — where he spent five years — have come to mean less with all the negative press and financial problems in recent years, making it even more tempting to break out on his own.

“Many of the iconoclastic brands have lost their appeal,” he says. See: JPMorgan breakaways make Page One of the New York Times after $9-billion loss puts spotlight on Dimon’s bank.

Capstone has expanded at a stunning rate since October, with 11 offices in markets such as Phoenix, San Francisco, San Diego, New Orleans, Houston, and Dallas and a new 10,000-square-foot headquarters in Irvine. The firm has also attracted 65 advisors around the country, a pace of recruiting that Pastor credits to the ownership stakes they receive in the company. He believes he can bring that same business-minded management to the struggling Phoenix Coyotes team.

'A poorly run business’

Since the NHL took over ownership of the Coyotes in 2009 following a bankruptcy declaration (and subsequent lawsuit) by owner Jerry Moyes, the team’s future has been up in the air. Legendary Wayne Gretzky was also a partial owner and the coach at the time, but quit in the wake of the bankruptcy proceedings. In the last four years the league has made it clear it intends to sell the team and a number of potential buyers have come forward and then disappeared, most recently San Jose Sharks executive Greg Jamison, who couldn’t assemble financing in time.

But, Pastor argues that doesn’t mean it’s a bad team or a bad business move. And, he believes he can succeed where others have failed. Pastor points out that “despite the fact that they’re in bankruptcy and the joke of the league,” the team still won the Western Conference championship in 2012. The players are young and dedicated, he says, the staff works hard and the arena location, next to the Arizona Cardinals stadium right outside Phoenix, is “fantastic,” he says.

And the games Pastor has watched are some of the best he’s seen in years. “They play great hockey, even if they don’t even know where they might end up next year. They have that kind of heart,” he says. “Those are the kind of people to have.”

It’s just the business end of things that needs help. If he purchases the team, Pastor’s plan is to keep it in Phoenix.

“We saw a poorly run business,” says Pastor — and a chance to turn it around and “fix something that’s broken. He emphasizes, however, that it is a “great investment for the long term.” In the short term, his bread-and-butter will continue to be Capstone.

Good Friday declaration

Pastor is heading up a consortium of interested buyers, whom he declines to name. “These are affluent business partners and some of them I consider friends,” he says. “It’s a tight-knit group.”

An NHL spokesman declined to comment on any potential buyers, saying it would be inappropriate. Since the Coyotes are owned by the league, management directed all requests for comment to the NHL.

The NHL, in the past, however, has frowned on public media blitzes, like the one Pastor engaged in this past Friday. An attempt by Jim Balsillie, former CEO of Research In Motion, BlackBerry’s parent company, to go public with his bid in 2009 backfired.

Pastor’s is not the only bid for the team that has emerged in recent weeks. ESPN reported last week that Ice Edge Holdings LLC founder Anthony LeBlanc, who has long been interested in purchasing the Coyotes, was joined by Greg Gosbee, the chairman and chief executive of Canadian financial firm AltaCorp Capital Inc., and a group of investors. That group is also working with the NHL and the city of Glendale to close a deal, possibly as early as this week. If a buyer is not found in the near future, the NHL has hinted that it may move forward with allowing the team to be purchased and moved to Seattle or Quebec.

Pastor’s group is, by comparison, relatively unknown to the sports community. But that doesn’t deter him. “We have thrown our hat into the ring,” says Pastor.

The competing offer and the fast-approaching deadline from the NHL may have prompted Pastor’s Good Friday declaration of intent. But, while negotiations are ongoing and confidential, he can say that he believes his group’s bid has a better shot than others’ because the investment bankers he’s working with have extensive experience with municipalities and what he calls the “intellectual capital.” One of the main hang-ups with past proposals has been working out a long-term lease with the city of Glendale. Pastor hinted that his team has been working with the city and is better prepared to reach a deal.

The Buffalo Bisons of 1970 were
good, hardheaded and nearly extinct.

“I don’t think anybody’s going to offer what we have,” he says.

A hockey history

Growing up in Buffalo, N.Y., hockey was a part of Pastor’s life. His grandfather and great-uncles bought the Buffalo Bison Hockey Club, an AHL team, in 1956 when the owner threatened to move the team. That franchise went on to become a farm team for the New York Rangers and Chicago Blackhawks and to win the Calder Cup in 1960, 1964, and 1970. The Pastors sold the team in 1971 after the Buffalo Sabres were granted an NHL expansion franchise.

His family, he says, taught him his love of sport and also how to balance business interests and take calculated risks. Now, he’s putting those lessons to the test.

“We’ve always taken risks where we saw opportunity — when it made sense,” says Pastor.

See: A hockey star went from being a Merrill Lynch client to a Merrill Lynch advisor to the latest Merrill Lynch breakaway.