Ex-Treasury chief brings new twist to a conglomerate

Remember William E. Simon? He was secretary of the Treasury under Presidents Richard Nixon and Gerald Ford. Before that he was a bond trader at Salomon Brothers, earning a six-figure salary. Now he's making another splash on Wall Street, this time running a fast-growing conglomerate called Wesray Corporation.

Already, Wesray has purchased the Gibson Greeting Cards division from RCA Corporation, for $80 million, and is in the process of acquiring the Wear-Ever Aluminum division from Alcoa and the Heekin Can subsidiary of Diamond International.

Besides these companies, Mr. Simon and his partners own more than half a dozen others, ranging from the Long Island Oyster Farm, which ships bluepoint oysters all over the country, to Michael Scott Inc., which makes an expensive line of attache cases and leather goods. All totaled, the conglomerate now has sales of about $750 million.

One of Simon's more interesting deals surfaced last week when Wesray and Eastdil Realty Ltd. announced the formation of a $250 million limited partnership called Eastdil Corporate Partners, which the partners said is designed to ''provide pension fund capital to American corporations.''

What Simon and Eastdil Realty have in mind is to provide a real estate limited partnership - for pension funds - with some unusual twists. According to Benjamin V. Lambert, president of Eastdil Realty, the fund will acquire properties - factories, offices, warehouses - from liquidity-squeezed midsize corporations. These assets will be leased back to the original owners for a specific fee, i.e., rent, and the costs of running the building.

According to Ray Chambers, a partner of Mr. Simon's at Wesray, Eastdil-Wesray will then negotiate an equity participation for the partnership in those corporations, such as through stock options or warrants. This separates it from other funds set up to invest pension money in real estate.

It also is a ticklish legal area. The new partnership cannot fully disclose what it intends to do until it negotiates with each company. Thus, the prospectus has to be left vague - something the Securities and Exchange Commission usually frowns on - concerning this subject. Presumably, however, prospective pension fund clients are being told that they may get some equity ownership as well as real estate.

According to Michael Clowes, editor of Pension & Investment, the equity part of the deal should be attractive to pension funds which have recently soured on the idea of investing in real estate.

''Many pension funds bought real estate as a hedge against inflation,'' Mr. Clowes explains, ''and if inflation is now turned off, real estate returns may not be as good. This new deal gets around that problem. If inflation is down, companies ought to prosper, and the warrants or options the investors get could be a nice plus.''

Easdil Realty, formerly a part of Blyth Eastman Dillon, and Wesray are the general partners and advisers in this deal. Eastdil has a relatively long history of real estate investing. According to Mr. Lambert, Wesray has been brought in for its expertise in corporate finance - presumably to structure the stock deals that will take place and analyze whether or not a corporation is worth investing in.

''You may think Bill Simon is part of this as window dressing,'' Lambert said , ''but he has a very active role. He must look at this from the point of view of the corporation and their business and whether or not it can meet its obligations.'' Mr. Chambers, who was formerly an accountant with Price, Waterhouse & Co., and established his own investment banking firm, Hampshire Capital Investment Banking Corporation (since merged into Wesray), has experience in real estate syndication.

Lambert says he expects that investors should see an annualized rate of return of 14 to 20 percent. But Mr. Chambers adds that ''if there are warrants in a high-technology company that has a couple of good years, it could distort the return.''

As general partners in the deal, Wesray, like Eastdil, stands to benefit no matter what the return. It will receive management fees for its roles and also have a participation in the partenership.