If you had $100 million to invest, you could have it managed by Lincoln Capital Management, the majority-owned firm that accepts nothing less than that amount. But thanks to John W. Rogers Jr. and his Ariel Capital Management Inc., individual investors with as little as $1,000, and institutional investors with only $1 million, can put Lincoln's investment expertise to work for them.
The secret is the recently formed Ariel Premier Bond Fund, the first fixed-income fund provided by a black-owned firm. While Ariel runs the fund and distributes its shares, Lincoln makes the investment decisions.
Everyone knows there are no guarantees when it comes to investing, but Lincoln's management style, roster of clients and track record should be comforting.
Lincoln manages over $30 billion for more than 90 clients. Of that, $17.5 billion is in three fixed-income portfolios, whose investors include New York City Public Employees Retirement System, Comsat and IBM.
Alexander B. Knowles, a Lincoln vice president, says Lincoln's cumulative return on investment for its fixed-income portfolios over the past five years has been 8.26%, significantly above the 7.66% return scored by similar funds in the Lehman Brothers Aggregate Index.
"Lincoln has been a top performer since it was established," says Philip Schneider, a director at Chicago-based Wyatt Investment Consulting. "Lincoln," he adds, "focuses exclusively on high-quality corporate fixed-income notes, mortgages and Treasuries." Schneider says such discipline is unusual even among top-ranked fixed-income money managers. He says most of them at times invest in lower-quality corporate or foreign bonds, "or try using derivatives."
Ariel's Rogers says the joint venture will "make Lincoln's expertise available to the individual investor, charity and the 401 (k) plan of a small or midsize business."
Rogers formed Ariel Capital Management a year ago when it split off from the Bethesda, Md.-based Calvert Group (see "Fund's Down, Not Out," Moneywise, Feb. 1995). Ariel is believed to be the first African American-owned equity mutual fund company.
The no-load, open-end Premier Fund will balance Ariel's equity side, the Ariel Growth and Ariel...