treasurers and other institutional investors who are looking for managers who have good returns with low risk,” Smith says.
He maintains that the firm is focusing on accountability and empowerment. It’s in the process of buying back 24% of the firm’s stock owned by Progress Level Mimic, a venture fund. The move would make the firm 100% employee-owned, giving his staff the opportunity to become stakeholders and providing motivation to boost revenues and profitability. “We realize in order to keep good people, you have to incentivize your people to show that you appreciate their value,” Smith says.
But 2007 was a more challenging year for Chicago-based Ariel Investments L.L.C. (No. 3 on the BE ASSET MANAGERS list with $13.2 billion in assets under management), which saw its assets under management fall 18.2% and revenues drop about 14% to $91.5 million. President Mellody Hobson attributed the decline to clients with a short-term investment focus as well as a market driven by low commodity and cyclical stocks that the company avoids. A down year for small- and mid-cap stocks also contributed to the firm’s drop in assets. “Our long-term performance number remains outstanding, which is a function of looking at our performance over market cycles,” Hobson says.
One of the new additions to the BE ASSET MANAGERS list is Chicago-based real estate investment firm Capri Capital Partners L.L.C. (No. 4 on the list with $4.5 billion in assets under management). Headed by Chairman and CEO Quintin E. Primo III, the company manages a commercial real estate portfolio on behalf of
government agencies, corporations, and educational institutions. He notes that firms such as his have received huge inflows of capital as U.S. pension funds increasingly look for alternative investments such as real estate, private equity funds, and hedge funds to reduce the overall risk of their portfolios and increase returns. “A continued downturn in the economy will inevitably affect commercial real estate in the U.S.,” says Primo. “However, the fundamentals of the commercial real estate market still continue [to be] quite sound. There has not been excessive overbuilding as there was during the real estate boom in the late ’80s that caused a great glut. The commercial [construction] industry has learned from its mistakes.”
INVESTMENT BANKS BOUNCING BACK?
Donna Sims Wilson, executive vice president at M.R. Beal & Co., says 234 initial public offerings in 2007 were priced with total proceeds exceeding $54 billion, up 18% over the previous year. Black investment banks benefited somewhat from the bounce-back year for IPOs, according to Wilson. Among the IPOs with black participation were The Blackstone Group, a financial services company, and MF Global, a broker of exchange-traded futures and options, with deals worth $7.6 billion combined. BE 100s firms M.R. Beal, The Williams Capital Group L.P., Utendahl Capital Partners L.P., Toussaint Capital Partners L.L.C., Jackson Securities, and Loop Capital Markets L.L.C. participated in these offerings.
Chicago-based Loop Capital Markets (No. 2 on the BE INVESTMENT BANKS list) had a record year as it increased its total managed issues by 31.1% from