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Investment Icon John W. Rogers Jr Develops First Black-Owned Mutual Fund

Pharaoh


Considered an investment icon by BLACK ENTERPRISE, John W. Rogers Jr. created the first family of equity mutual funds managed by African Americans. He is also celebrated for leading a legacy fueled by his fight for diversity on corporate boards and better financial opportunities on behalf of Black firms.

As we look back at the world of Black business, Rogers’ monumental formula to architecting and achieving a $1.6 billion portfolio landed him No. 1 on the BE ASSET MANAGERS list with $11 billion in assets under management. He was also recognized at number 19 on our 40 “Titans: The Most Powerful African Americans in Business–and How They Shaped Our World” list.

A young stock-building lad turned investor

When it came down to shopping for Christmas and birthdays, Rogers’ Dad had an unusual gift idea in mind: brand new stocks and a growing portfolio. By the age of 12, Rogers’ passion for investing had begun to take flight.

As a Princeton college student, Rogers saw his interest in equities grow while pursuing an AB in economics. On his path to wealth building, Rogers leveraged his passion for something greater.

The recent grad went on to work as a stockbroker at William Blair & Company over the two-and-a-half years after acquiring his degree. But it took three years for Rogers to act on a need to invest in undervalued small-and medium-sized companies that show a strong potential for growth.

In 1983, Rogers founded Ariel Capital Management, now Ariel Investments L.L.C., the first African American firm to develop a mutual fund: the Ariel Fund. With offices in New York and Sydney, the Chicago-based firm manages more than $16 billion in assets and offers investors six no-load mutual funds and nine separate accounts.

Rogers remains Ariel’s chairman, chief investment officer and stock-picker, co-managing funds such as: Ariel Appreciation Fund, Ariel Small Cap Value, Ariel Small Cap Value Concentrated, Ariel Small/Mid Cap Value, and Ariel Mid Cap Value.

The Ariel Fund, on the other hand, serves as Rogers’ $2.5 billion flagship. Launched in 1986, the fund reigned as the longest-running of its kind in Morningstar’s mid-cap value category.

Multi-billion dollar milestones and investments

In spite of the 1987 crash known as Black Monday, Ariel invested into cheap stocks, encouraged clients and brokers to jump on the wave, and outperformed with double-digit gains. The winnings took a hit during the 2008 financial crisis, and still managed to progress slow and steady.

In 2003, Ariel achieved an investment milestone when 17 major corporations selected the company’s mutual funds for its 401k plans, BLACK ENTERPRISE previously reported. The firm reported assets under management of more than $15 billion–the nation’s largest African American asset manager.

Today, Ariel solidifies its place in the future of Black wealth with its first foray into private equity in its four-decade history. The company announced the historic close of Project Black at $1.45 billion on the first day of Black History Month.

One of the largest first-time private equity funds of all time, Project Black seeks to close the racial wealth gap by creating minority-owned businesses of scale that can serve as Tier 1 suppliers to the Fortune 500.

(Twitter / @ArielInvests)

Acting on a responsibility

For close to 30 years, Rogers has dedicated his time to promoting financial literacy and wealth-building through investing using the Ariel Education Initiative.

While our research capabilities have since expanded, Rogers’ patient approach still anchors the firm today.

Beyond Ariel, Rogers advocates for diversity as co-founder of the Black Corporate Directors Conference, which which brings together scores of African American business leaders to focus on their role in corporate governance. But he discovered that too many “weren’t fighting for the civil rights agenda once in the boardroom.”

“Too often, we were just happy to be there. We were uncomfortable making the white leadership uncomfortable. So we sort of sat there and, in effect, gave cover for the status quo to stay the same,” Rogers previously told Derek Dingle, BLACK ENTERPRISE Sr. VP/Chief Content Officer.

Meanwhile, Rogers actively fights for Black firms to gain access to opportunities to manage corporate, pension fund, and endowment dollars. By requiring inclusivity among portfolio companies, Ariel has successfully diversified corporate board and leadership positions.

“We remind people that it takes courage to speak out to make a difference. We have a responsibility,” he added.

Beyond Ariel, Rogers is a member of the board of directors of McDonald’s, Exelon Corp, NIKE, The New York Times Company, Ryan Specialty Group Holdings and the Obama Foundation. He also serves as Vice Chair of the board of trustees of The University of Chicago.

 

Black Enterprise Titan John Rogers is the founder of Ariel Capital Management, now Ariel Investments, the first family of equity mutual funds managed by African Americans.

In 2017, Rogers represented exemplars among those found on the 2017 BLACK ENTERPRISE Registry of Corporate Directors, which included 292 board members from the S&P 500.

Rogers once said if BE 100s asset managers and other firms demand companies in which they invest “look like America and live up to values they say they care about, they will change.”

“Unfortunately, most money managers talk about profit margins and growth, and what’s happening with the stock price and valuation but not pressing that management team on those issues.”

 





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