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Ariel Company Update

TO: Clients and Friends of Ariel Investments, LLC

FROM: John W. Rogers, Jr., Chairman, Co-CEO and Chief Investment Officer and Mellody Hobson, Co-CEO and President

DATE: March 23, 2020

RE: Company Update

We will be the first to admit, 11 years after the worst financial crisis of our generation, we did not expect to be in a foxhole again. But, here we are. While it may seem like the world is falling apart, we are writing to assure you that Ariel is not. Over our 37 year history, we have lived through the Crash of 1987’s 22% single day drop; the six day market shutdown during 9/11; the out of left field intra-day Flash Crash in 2010; the 19 month long Global Financial Crisis and now this. While a worldwide pandemic may be in a category all its own, we believe everything we have experienced up to this moment has helped prepare us for this new unknown.

The office is now at home

From a practical perspective, our business continuity plan went into full effect on March 20th in response to shelter in place orders issued by the governors of Illinois and New York. To that point, we want to assure you our staff is equipped to work from home. We are fully engaged and energized. Additionally, a handful of select team members are standing by in the event there is a need to be on premises to ensure essential technology and operations remain uninterrupted. Fortunately, we have been able to gradually move to this state over the last two weeks by giving teammates the option to work from home, with an increasing number doing so each day. Our “fully loaded” system is functioning well. We are working to make it feel like our offices are open. Information is the life-blood of an investment firm and, in our case, it is flowing. Calls and mail are being re-routed, portfolios are being traded, stock review and investment committee meetings are taking place. We are in regular and ongoing conversations with portfolio company managements and are striving to expeditiously respond to any and all client requests. Lastly, in order to maintain a high level of communication and troubleshoot any issues, our 11-person operating committee comprised of department heads checks-in with a group call every morning.

Opportunities will arise… for patient investors

We know this sudden bear market state is jarring and highly disconcerting. While we are not without emotion for the gravity of this crisis, we want to assure you that we are measured and deliberate when it comes to managing your money. This is when we rely on the Ariel playbook and execute. We are battle-tested, grizzled veterans committed to delivering exemplary performance to our valued clients. In order to do so, we know now is the time when we must have courage and conviction. Most of all, patience is everything. Today’s decisions will drive years of future returns. In the midst of the extreme volatility, we are carefully sifting through the wreckage with a laser focus on the balance sheets of our existing holdings as well as those of new, fresh ideas. The over-riding question in our research meetings is simple: does the company have the financial wherewithal to survive our most pessimistic, worst case scenario?

It is also worth noting that while we hate losing money, we take some solace in knowing our flagship strategies are outperforming their benchmarks so far this year. More detailed results are below for your information.

Brighter days will come

We realize it may get worse before it gets better—but one thing we know for sure, it will get better. One day, in the not so distant future, we will all sit in our offices working side-by-side. We will go to restaurants, movies, concerts and sporting events. Our children will go back to school. We will hug our friends and shake hands in professional settings. One day, in the not so distant future, life will normalize.

We remember standing together in 2009 at the market bottom with our eyes locked on a brighter, better future. And even with our high level of enthusiasm at that time, we underestimated the market and economic strength that would follow. We did not anticipate the longest bull market in stock market history.

So now, in the face of another daunting moment, the only way we can fail is if we waver. The great thing about Ariel is that we are our very best when confronting a challenge. We are our very best when we are the underdogs. We are our very best when we are aligned, bold and brave.

Please know our entire team is thinking of the health and well-being of humanity as we all navigate this historic moment.

Past performance does not guarantee future results. Results shown are preliminary. Performance results are net of transaction costs and reflect the reinvestment of dividends and other earnings. Net returns reflect the deduction of the maximum advisory fee in effect for the respective period. Actual fees may vary depending on, among other things, the applicable fee schedule and portfolio size. Fee information is available upon request and may also be found in Ariel’s Form ADV, Part 2. Returns are calculated in U.S. dollars. Click here to obtain performance for the composites and their indexes (including index descriptions and how each strategy differs from their respective index(es)) for the period ended 12/31/2019: Ariel Small Cap Value Tax-Exempt CompositeAriel Small/Mid Cap Value CompositeAriel Mid Cap Value CompositeAriel International (DM) CompositeAriel International (DM/EM) CompositeAriel Global CompositeAriel Focused Value Composite, Ariel Micro-Cap Value Composite, and Ariel Small Cap Deep Value Composite.

The intrinsic value of the stocks in which the portfolios invest may never be recognized by the broader market. Investing in micro, small and mid cap stocks is more risky and volatile than investing in large-cap stocks. The small, small/mid and mid cap portfolios are often concentrated in fewer sectors than their benchmarks, and their performance may suffer if these sectors underperform the overall stock market. Investments in foreign securities may underperform and may be more volatile because of the risks involving foreign economies and markets, foreign political systems, foreign regulatory standards, foreign currencies and taxes. The use of currency derivatives, ETFs, and other hedges may increase investment losses and expenses and create more volatility. Investments in emerging markets present additional risks, such as difficulties in selling on a timely basis and at an acceptable price. The focused value portfolio may be subject to greater volatility than a more diversified portfolio.

This update highlights information about the separately managed account strategies offered by Ariel Investments, LLC. These strategies are available to institutional clients, including public and private retirement plans, union plans, foundations and endowment funds, and high net worth individuals. Advisory services provided and the fees charged will vary depending upon the nature of the account under management. The performance of the Ariel Investments mutual funds will differ from the performance of the strategies discussed in this communication. Investors should consult their financial advisors before making any investment decisions.