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Apart from his parents, John W. Rogers, Jr., CEO and founder of Ariel Investments, most loves to quote his former basketball coach at Princeton University: "It's unacceptable to think of yourself first. You always have to think of the team first."
Ariel Investments was founded in 1983 and now manages over $11.5 billion in investments for individuals, major companies and organizations across the country, including $25 million it manages for AARP. In 2013, Rogers was featured alongside legendary investors Warren Buffett and Sir John Templeton in the book “The World’s 99 Greatest Investors,” and investor Meb Faber cites Rogers in another book on 20 top investors. The secret to Ariel’s success? "It's all about the team," he says. "And our customers are part of the team." For starters, Rogers attracts some of the top talent in the country to Ariel, including Mellody Hobson, the firm’s president, and Arne Duncan, the former Secretary of Education who Rogers had recruited to run the Ariel Education Initiative in 1992. In addition, Rogers invests considerable resources and time into crafting a positive environment at the company. "My goal is to make sure that independence and creative thinking are valued and rewarded."
An asset manager for AARP since 2009, Ariel’s goals are to deliver a high-level of customer service and outperform all of their benchmarks. Rogers notes that the key for AARP is to look at long-term and contrarian investors, which is important to retirees. "Very often people get too conservative too early," He says. Americans in general are living longer lives, which he sees as an important variable for AARP's investment strategy. For example, if someone retires at age 65, it is possible they could live another 30 years. As a result, he indicates that when there is volatility in the market that is the time to take full advantage of it, with a long-term perspective in mind. Rogers sees Warren Buffett as a genius when it comes to investing and referred to Buffett's oft-quoted mantra relative to market volatility: "Be fearful when others are greedy, and be greedy when others are fearful."
Rogers notes that it has been a privilege working with the “smart and talented team” at AARP. Approximately half of Ariel’s total assets under management represent investments managed for non-profits, endowments and foundations. Ariel is happy to count AARP among this group of tax-exempt organizations, “especially because of its vast membership and reach.” As Rogers explains, “I appreciate AARP highlighting some of the diverse professional firms that it partners with, especially since these are among the hardest industries to crack into.” Ariel also goes above and beyond to make sure its management and junior ranks reflect the diversity of the country.
Rogers is also a prolific writer and speaker. A regular contributor to Forbes, Rogers wrote a piece last year on "How to Avoid the Index-Hugging Syndrome." In the article, he takes on the idea that passive investing is the “theme of the moment” as money pours into index funds and exchange-traded funds (ETFs). He refers to a recent paper by K. J. Martijn Cremers of Notre Dame, who created the Active Share metric. Cremers compares active fund managers to managers whose investment strategy only focuses on the largest corporations. Rogers sums up the paper with the following: "Don’t be afraid to deviate from the norm, invest in contrarian stocks in which you have high conviction, and be very patient." This is core to Ariel’s philosophy, and embodied by the turtle that forms part of the company’s logo.
Rogers is not only adamant about achieving the highest possible returns for his clients and cultivating a highly-talented team to deliver on that promise, but he is also committed to supporting rising entrepreneurs. "It's a core value I believe in," he says. Acknowledging trailblazers among Chicago’s business leaders, Rogers states, "The Lester Crowns, Jay Pritzkers and Andy McKenna's of the world always put others first. I always try to find a way to get to yes and to be helpful. When you help others, good things come back to the firm."
Ariel is one of the few investment firms in the country that is owned by its employees, 85 total. "Everyone owns stock in our company that is unusual for a private company." And he knows that translates into a higher level of teamwork and performance. "You can always bench people on a basketball team if they don't perform,” he says. His answer to that in a business context: "When you share equity with all your teammates, you show you care about them." That, as Rogers sees it, translates into many winning seasons.
Mia Wenjen, Aquent
Daisy Exposito-Ulla, d exposito & Partners
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