For the first time in its 25-year history, a Black-owned investment firm had to layoff employees in part because of the soft economy.
For the first time in its 25-year history, a Black-owned investment firm had to layoff employees in part because of the soft economy. “We recently tightened our belt and laid off 18 employees,” said Mellody Hobson, president of Chicago-based Ariel Investments LLC. “What we did is no different from what other companies are doing in response to the weak economy.” Among those laid off was Controller Yvonne Towers, whose duties will be assumed by Chief Financial Officer Thomas Herman. Morgan Stanley Analyst Barry Thomas said while the soft economy had a lot to do with the layoffs, poor returns this year on some of Ariel’s mutual funds may have also caused the downsizing. “If your largest mutual fund (with $2.4 billion in assets) is down nearly 16 percent this year, you have no choice but to make changes,” Thomas said. “But a good thing for Ariel is that energy prices have begun to fall a little, so many of the consumer stocks Ariel holds in its portfolio should start to rebound.” Despite its small size ($39 million in assets) Ariel’s Focus Fund is geared toward large company holdings and remains a top performer, added Thomas. And Ariel’s Appreciation Fund (with $1.7 billion in assets) has returned 8.9 percent to investors so far this year, slightly better than the Standard & Poor’s benchmark. Ariel Investments, founded in 1983 by John W. Rogers, is one of the largest Black-owned mutual fund managers on Wall Street with over $16 billion in assets under management. ______ Copyright 2008 Chicago Defender. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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