Preheat the oven to 350.
Grease and flour 3 8-inch cake pans. Set aside.
In a large bowl, cream the butter and shortening until smooth. Add the sugar and beat well.
Add the egg yolks and mix well.
Sift the flour and add into the sugar and butter mixture one-third at a time, alternating with the milk.
Stir in the vanilla, 1 cup of coconut and the pecans.
Fold in the egg whites carefully until no pockets remain.
Divide evenly between the three prepared pans.
Bake 25 minutes and turn out to a wire rack to cool completely
While the cakes bake, sprinkle one cup of coconut on a baking sheet and toast it in the oven alongside your cakes until brown and nutty, about 8 to 10 minutes. Stir it every couple of minutes to make sure it doesn’t burn. Then set aside to cool
For the frosting:
Cream the butter and cream cheese until well mixed. Add the vanilla and powdered sugar and mix until well combined.
Spread between layers of cake and on top and sides.
Use your hands to press the toasted coconut all around the sides.
Sprinkle pecans over the top.