CHICAGO — Executives at Ariel Capital Management LLC are strategizing for what could be an inflection point for the Chicago-based money manager, one in which the minority-owned firm significantly increases its focus on the retail and defined contribution marketplaces.
After weeks of discussions and research, executives for Ariel gathered Jan. 5 to discuss the direction for the firm's growth, and both the retail and defined contribution markets appear to be the areas the firm's officials have identified as the most considerable opportunities.
"You need to play to your strengths," said Mellody Hobson, president of Ariel. "We've already been in these markets, but we need to hit them harder than we ever have before."
Ms. Hobson said this strategy could lead the firm to issue new institutional share classes of its existing mutual funds, which would allow Ariel's funds to be offered on more defined contribution platforms. Currently, of Ariel's $16.3 billion in assets under management, roughly $7 billion is in its three mutual fund strategies.
Ms. Hobson also said Ariel could choose to expand its managed accounts offerings, which currently make up $679 million, or 4%, of its total assets under management.
The new push would ultimately outfit Ariel to further target defined contribution plans, an area Ms. Hobson said might prove to be the most appropriate long-term market for the firm.
"If you preach patience in investing as much as we do, you will want to focus on those parts of the market that also value patience in the same regard," said Ms. Hobson. "The defined contribution mindset is long-term. Investors tend to stick with the funds they choose over long periods of time and patience is really embraced."