So they launched Atlanta Life Investment Advisors Inc. When Brown came on board, he worked with the asset management team to boost its pension fund advisory business. In fact, by 2005, Atlanta Life Investment Advisors inked agreements that gave the company management of $150 million of MetLife Inc.’s assets — 3% of the financial giant’s equities and other limited partnerships.
In 2007, the four portfolios in the company’s asset management business — large cap value, large cap growth, large cap core domestic, and large cap core international — all ended with positive gains. “Last year in value, we outperformed our benchmark [the Russell 1000 Value Index] by about 1,000 basis points, or 10%,” says Randell A. Cain Jr., a principal who oversees the large cap value strategy portfolio that makes up about 70% of the firm’s managed assets. Cain made the right move to invest in energy and natural gas and shun the financials, which pumped up the firm’s returns and limited its subprime exposure last year.
Through strategic alliances, relationship-building, and sheer performance, assets under management have grown substantially in four years, from $53.9 million in 2003 to $1.1 billion in 2007, earning a berth on this year’s BE ASSET MANAGERS list.
By 2007, Brown was ready to put in place the third component of his master plan: an acquisition. Jackson Securities was almost a perfect fit. Both companies were based in Atlanta, and Jackson Securities had preserved excellen
t relationships cultivated by its late founder, the former mayor of Atlanta, Maynard Jackson.
The iconic black politician and entrepreneur had passed away in 2003 and the company struggled after he was gone. Reuben R. McDaniel III, president of Jackson Securities, says the loss of Jackson was devastating for the business. Jackson was the personal guarantor for all the firm’s credit lines, which dried up after his death. According to McDaniel, the company actually went two years without a working capital line. Furthermore, without Jackson’s presence, employees worried about whether the firm was going to make it. “One major issue was he could make any phone call you needed. He could make that first phone call and make that first meeting in a way that was much easier,” McDaniel reflects.
Those were hard times for the firm Jackson launched in 1987. “By the beginning of 2004, it was rough,” McDaniel recalls. “We had a couple of clients who were able and willing to pay us early and stepped up and worked with us, and we just managed cash flow just as tight as a tick. You do what you have to do.”
But even so, Jackson Securities was in a rut. From 2003 to 2006, total managed issues for the firm dropped 45.4%, from $44.1 billion to $24.9 billion. While it was getting municipal and corporate bond underwriting deals, it didn’t have the capital to participate in larger and more lucrative transactions. It was a classic Catch-22: It takes money to make money since government regulations require relative levels of net capital for every underwriting deal. Jackson Securities