By Steven R. Strahler
CHICAGO — Strange as it seems, John Rogers is pining for a market correction.
Mr. Rogers is founder, chief executive officer and chief investment officer of Ariel Capital Management LLC. The Chicago firm's total assets under management dropped more than 20% to $16.8 billion for the year ended June 30, the biggest decline in more than 10 years.
Some investors antsy for better returns are ditching the firm.
The $36.8 billion Illinois Teachers' Retirement System, Springfield, pulled its $452 million portfolio in May. Ariel also was dropped by the $1.5 billion Milwaukee County Employees' Retirement System. Others — including the $11.2 billion Illinois State Board of Investment, Chicago, which has $166 million with Ariel — are reviewing their relationships with the firm.
Mr. Rogers blames the three-year market expansion that has lifted indexes such as the Standard & Poor's 500 by more than 10% per annum.
"We would like to see hot markets cool," said Mr. Rogers in an interview. "The last three years, the wind has not been at our back. The steady-Eddie, quality-type companies have done terrible."
Ariel isn't the only value manager to struggle during the recent bull market. And its size and long-term track record give Mr. Rogers time to turn things around.
But it's clear his patience is wearing thin. He said he'll call for action at a couple of the more troubled companies in Ariel's portfolio — a radical switch for the company whose slogan is "slow and steady wins the race."