Black Owned Investment Firms

William Huston, AIF®, AIFA®

by in Published on July 14, 2021

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Black-Owned Investment Firms

Black owned banks

When it comes to investing and stock market participation, people in the Black community and other people of color in the U.S. have faced challenges in occupying these spaces. This has been caused by systemic racism, discrimination, financial illiteracy, among other challenges.

Out of the 92,000+ CFP® professionals that were recorded in 2021, only 1,652 are Black. This accounts for only 1.8% of all CFP® professionals. As much as this marked a 10% increase, the numbers are still significantly low.

Despite these barriers, Black investors and professionals continue to penetrate and occupy space in the investment industry, a field that has predominantly been White male dominated.

What Is an Investment Firm

Black owned banks

An investment firm is a company that collects capital from various investors and then re-invests that pool of capital in financial securities like equity, debt and various money market instruments.

The investment company shares any profits or losses incurred with the investors, depending on each investor’s interest in the company.

Investment companies fall under 3 categories:

  • Closed-end funds
  • Mutual funds
  • Unit investment trusts

Each of these three investment companies must register under the Securities Act of 1933 and the Investment Company Act of 1940.

If you are looking to work with an excellent Black-owned investment firm, here are the top 10 that you should consider.

10 Excellent Black-owned Investment Firms

Bay Street Capital Holdings

Bay Street Capital Holdings is an independent investment advisory, wealth management, and financial planning firm headquartered in Palo Alto, CA. The firm manages portfolios with the goal of maintaining and increasing total assets and income with a high priority on managing total risk and volatility.

As a fiduciary, they invest on the behalf of their clients with integrity, focus, and careful stewardship of their capital. The company is on a mission to inspire the next generation of diversified investors through the investment of alternative asset classes with priority on managing total risk and volatility.

The company is dedicated to empowering minority communities by guiding them through their investment journey. Among the services that they provide their clients include wealth management, introduction to real estate opportunities, tax efficiency, estate planning among others.

Advent Capital Management

Advent Capital Management was founded by Tracy V. Maitland in 1995. The company's mission is to provide its clients with investment strategies that offer long term returns as well as capital preservation. seek to provide long-term investment returns with an emphasis on capital preservation.

Guided by ESG principles, the company uses this as a guide to create individual, tailored client solutions that create a positive impact.

In 2022, the company has approximately $9+ billion in assets under management.

Ariel Investments

Ariel Investments is the largest operating Black-owned mutual fund in the U.S. that was founded in 1983 by John W. Rogers Jr. It is currently the largest minority-owned investment fund. The major focus of the fund is to provide capital so as to enable minority-owned businesses to set up their operations and scale and also to improve financial literacy among people of color.

John W. Rogers, Jr. is the Chairman, Co-CEO, Chief Investment Officer and Lead Portfolio Manager. Mellody Hobson is the Co-CEO & President of the company and is responsible for management, strategic planning and growth for all areas of Ariel Investments outside of research and portfolio management.

The company maintains assets for individual and institutional clients in mutual funds and separately managed accounts. With a strong focus on cultivating a learning culture that helps to improve internal processes, Ariel Investments also puts a lot of emphasis on diversity, equity and inclusion in order to empower underrepresented minorities and promote fairness across the board.

In 2022, the company has approximately $17.8 billion in assets under management.

Bronze Venture Fund

Founded in 2009 by Stephen DeBerry, Bronze Investments is a venture capital firm in California that focuses on making and managing innovative investments that align strong financial returns with positive social impact; economically, socially as well as environmentally.

Based in East Palo Alto, California the company has approximately $25 million in assets under management.

Brown Capital Management

Brown Capital Management is a Black-owned investment firm in Baltimore that was founded in 1983 by Eddie Brown. It is one of the oldest African-American founded asset management companies in the U.S.

The company's investment strategy is based on identifying exceptional growth companies and patiently holding them as they transform their sustained revenue growth into increasing earnings. The four equity strategies in separately managed account and mutual fund vehicles that they manage are:

  • U.S. Small Company
  • U.S. Mid Company
  • International Small Company
  • International All Company

In 2022, the company has approximately $10.6 billion in assets under management.

Channing Capital Management

Channing Capital Management is an investment management boutique that was founded in 2003 by Rodney B. Herenton and Wendell E. Mackey, CFA.

Based in Chicago, the company offers investment advisory services to institutional investors using the small-cap value, SMID-cap value, all-cap value and large-cap value strategies. The company invests in international mid- and large-cap companies, focusing on high-quality value stocks.

In 2022, the company has approximately $3.2 billion in assets under management.

GenNx360 Capital Partners

Founded by Ronald Blaylock and Lloyd Trotter in 2006, GenNx360 is a private equity firm that invests in companies within the manufacturing and business services space.

Their portfolio consists of U.S. based middle market industrial and business services companies with solid business models that have the potential to grow and expand sustainably.

In 2022, the company has approximately $1.8 billion in assets under management.

Pugh Capital Management

Pugh Capital Management was founded in 1991 by Mary Pugh and Scott Greiwe. Based in Seattle, Washington, their mission was to create a diverse and independent institutional fixed income firm.

Over the last 30 years, the company has rapidly expanded to build a diverse national client base that includes some of the largest corporations, endowments, foundations and public pension plans in the U.S.

As the company continues to grow, it remains committed to specializing in active fixed income management for institutional clients.

In 2022, the company has $11.7 billion in assets under management.

Vista Equity Partners

Founded in 2000 by Robert F. Smith, who is Vista’s current Chairman and CEO, Vista Equity Partners is a company that invests in businesses that develop and use technology, software and data to promote economic equity, ecological responsibility and diversity and inclusion to ensure the success of all parties involved.

They use:

  • Private equity
  • Permanent capital
  • Credit
  • Public equity

As investment strategies in order to fulfill their mission of creating opportunities by leveraging the power of technology.

In 2022, the company has approximately $94+ billion in assets under management.

Williams Capital Group

Williams Capital Group was founded in 1993 by Christopher Williams with the aim of providing investors with a stable and consistent income stream while still preserving their capital.

The company specializes in private and alternative lending secured by real estate. They have built out a full-service lending and loan servicing platform to make sure that there is a steady flow of investments for their funds.

Pros & Cons of Investment Funds

Pros

Among the advantages of working with an investment company as opposed to saving yourself include:

  • Investment firms usually hire qualified and specialized fund managers to manage the investments. They do bring in their expertise on investment management as well as proper research that helps them make informed decisions when weighing their options on how best to manage the funds.
  • Managed funds are controlled by experienced investment specialists - fund managers who make investment decisions on behalf of the investors after undertaking thorough research and weighing all the available options.
  • The maintenance cost of investment funds is on the lower side and so you won't be required to put in a lot of effort and resources towards this.

Cons

Some of the cons include:

  • In a case where there is market underperformance, the return on investment may be very low, and this in turn trickles down to the investors.
  • Investment funds that are active usually charge higher management fees as the return on investment tends to be higher. Therefore, for the investors to get a good return on investment, it is important that the active funds perform well in the market.

Conclusion

Investment funds are a good way to invest your resources in order to get good ROI at low maintenance costs.

Black owned firms in the investment space are continuing to emerge and take up more space in order to serve marginalized communities, promote equity and inclusion as well as promote financial literacy.

Bay Street Capital Holdings

Bay Street Capital Holdings is an independent investment advisory, wealth management, and financial planning firm headquartered in Palo Alto, CA. They manage portfolios with the goal of maintaining and increasing total assets and income with a high priority on managing total risk and volatility. Although many advisors may focus on maximizing returns, they place a higher priority on managing total risk and volatility.

Our founder, William Huston founded Bay Street after 13 years of supporting the United States' largest retirement plan ($650B) Thrift Savings Plan. He is recognized as Investopedia’s Top 100 Financial Advisors for 2021. In California, only two black-owned firms out of nineteen firms received this recognition. In Scottsdale Arizona, Ekenna Anya-Gafu CFP, AAMS is recognized among the Best Financial Advisors for his responsiveness, friendliness, helpfulness, and detail. Bay Street was founded to advocate for diverse and emerging fund managers and entrepreneurs. In 2021, Bay Street was selected as a finalist out of over 900 firms across the US in the category of Asset Manager for Corporate Social Responsibility (CSR).

Sources

https://www.investopedia.com/terms/i/investmentcompany.asp

https://www.wallstreetmojo.com/investment-company/

https://www.investor.gov/introduction-investing/investing-basics/glossary/investment-company

https://www.cfp.net/news/2022/01/cfp-board-surpasses-92000-cfp-professionals-increases-gender-and-racial-diversity-of

https://www.theguardian.com/business/2021/nov/05/black-investment-firms-racial-finance-gap

https://www.cfp.net/news/2022/01/cfp-board-surpasses-92000-cfp-professionals-increases-gender-and-racial-diversity-of

https://www.theguardian.com/business/2021/nov/05/black-investment-firms-racial-finance-gap

https://www.investopedia.com/legendary-black-investors-5112666

https://www.theguardian.com/business/2021/nov/05/black-investment-firms-racial-finance-gap

https://www.adventcap.com

https://www.arielinvestments.com

https://www.bronze.vc

https://www.browncapital.com/aboutus/

https://www.channingcapital.com

https://gennx360.com

https://www.pughcapital.com/

https://www.vistaequitypartners.com

https://www.wcapitalgroupllc.com/investors

William Huston, AIF®, AIFA®
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