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‘The world is ready and open’ for more diversity among investment firms, says Wall St director after new business launch

Pivotal Advisors founder Tiffany McGhee told CNBC on Tuesday that increasing opportunities for various companies begins with recognizing the historic barriers that were in place, especially in the financial services industry.

“If you are interested in working with a company that is owned by various groups, traditional measures may not work. We may not have a 50-year track record,” McGhee said in an interview. But, she stressed, “that doesn’t mean we don’t know what we’re doing.”

McGhee officially launched New York-based Pivotal Advisors this week after nearly a decade at Momentum Advisors, where she served as CEO and co-CIO of her Institutional Investments practice. Pivotal, which manages the CIO functions on an outsourced basis, specializes in working with institutional clients such as pension plans and foundations, McGhee said.

Pivotal is the first company in its class to be run by an African-American and Afro-Latina woman, according to a press release. McGhee, whose Wall Street career began 16 years ago, said she believed the racial justice calculation that took place in 2020 helped create an opportunity for the founding of Pivotal.

“There has never been a better time to start a business, I believe, for someone like me because it seems like the world is ready and open,” said McGhee, who is also a CNBC contributor. She pointed to the Black Lives Matter protests that swept the nation this summer and subsequent commitments by companies to increase board diversity, for example.

Businesses can still do more to tackle the economic inequalities that exist in the United States, for example by hiring companies from various groups for professional service contracts, she said. “If you want to move the needle, this is how you do it.”

John W. Rogers Jr., Co-CEO and Chief Investment Officer of Ariel Investments, has offered a similar roadmap for driving the success of businesses in diverse groups. In an interview Tuesday on CNBC’s “Halftime Report,” Rogers said organizations established in the US economy have a role to play.

“If you really want to grow a great business, you have to have access to customers as well as capital. And many of us in the financial services industry who have started our own businesses, we fondly remember those early customers, ”said Rogers.

For Ariel, which Rogers founded in 1983, those first clients were the city of Chicago and Howard University, a historically black university located in Washington, DC, he said.

“They gave us an opportunity and once we got those first clients, it gave us the confidence to get more clients, and it got more clients, so access to clients is essential,” he said. said Rogers, whose Ariel was the first African-American headed company to have a family of mutual funds.

McGhee agreed with Rogers, especially for financial firms owned by various corporations. “In the investment industry, nobody likes to be first. And I think when you’re a fund, people kind of think you’re starting from scratch,” she said. . “When you’re an investment advisory firm, it’s hard to get that first client because the first thing they’ll ask you is, ‘How much money do you manage? “”

Typically, Rogers said organizations have focused their efforts on creating opportunities for minority-owned businesses through contracts with vendors. However, in today’s knowledge-based economy, Rogers implored policymakers to take a broader view.

“This is why we want institutions anchored in our country – whether it is a university, a museum, a hospital or a large company – to ensure that they really do business with minority-owned companies in everything we do. “

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