For Newark, New Jersey-based City National Bank (No. 8 on the BE Banks list with $358.4 million in assets), less lending caused assets to fall from $387.3 million in 2010. CEO Preston D. Pinkett III says the new strategy will be to focus less on commercial real estate lending and diversify into small business and consumer areas. The bank also seeks to raise new capital this year to cover additional loan losses as well as expand its business. Says Pinkett: “As the big banks are getting bigger and stronger, minority banks must find ways to serve their customers and stay viable.â€
In terms of private equity, the average deal size for global and U.S. deals–up 18% and 24%, respectively–helped drive 2011 levels higher, says Thomson Reuters. Given this environment, BE firms’ capital under management grew 80.99%. West Hartford, Connecticut-based Fairview Capital Partners (No. 3 on the BE Private Equity Firms list with $3.3 billion in capital under management) saw capital under management increase as well. Co-Managing Partner JoAnn H. Price says growth came mainly from a $250 million investment from three existing pension funds. The firm plans to raise another $750 million over the next two years, in part, through investing in deals in emerging markets such as Africa. Says Price: “You’ve got to be aggressive and pursue a variety of strategies to reach your ambitious targets.â€
The performance of Addison, Texas-based UrbanAmerica Principals III L.L.C. (No. 4 on the BE Private Equity Firms list with $989 million in capital under management) was essentially flat last year. CEO Richmond S. McCoy says it amounts to normal fluctuations in valuations. So now the firm is looking to seed two new $200 million private equity funds–one targeted at the senior assisted living housing sector, and the other for distressed faith-based bank loans.
For asset managers, the equity markets were volatile last year: the Dow Jones industrial average gained 5.53%, the S&P 500 was flat at 0%, and the Nasdaq fell 1.8%, according to SNL Financial in Charlottesville, Virginia. As a result, be money managers’ assets under management dropped 17.5%. Chicago-based Ariel Investments L.L.C. (No. 7 on the BE Asset Managers list with $4.4 billion in assets under management), saw assets under management decline from about $5.5 billion in 2010. In response to market performance in the aftermath of the worst economy since the Great Depression, Ariel Investments CEO John W. Rogers says: “I think it’s important we reinforce our message that slow and steady ultimately wins the race. We have to keep reminding investors to stay the course … that America’s best days are ahead of us and the stock market will recover.†To add future business, Ariel has launched three new funds: Ariel Discovery, a publicly traded mutual fund geared to invest in small-cap U.S. companies; Ariel International Equity Fund, its first international fund aimed at investing in foreign companies in developed markets; and Ariel Global Equity Fund, which will invest in foreign and U.S. firms.
(Continued on next page)