In this episode of Capital for Good we speak with Mellody Hobson, one of the country’s preeminent investors and business and civic leaders. Hobson is the co-CEO of Ariel Investments, a board director of several Fortune 500 companies and nonprofit organizations, and a nationally recognized advocate for financial literacy and economic inclusion.
We begin with a discussion of the formative childhood experiences that would shape Hobson’s personal and professional trajectory. Hobson recalls how, as a young girl on the South Side of Chicago who regularly experienced economic insecurity, she was driven to work very hard and “to understand money” as a path to economic security for herself and for others. “My purpose was sealed very early,” she says.
After graduating from Princeton in 1991, Hobson joined the Chicago-based Ariel Investments. In the thirty-five years since, she has traveled from intern to co-CEO, building a $14 billion asset management firm with a mission to “transform the lives of everyone who entrusts us with their financial futures.”
Hobson walks us through her evolution as a leader, and describes Ariel’s signature approach to long-term investing in companies and sectors that are “misunderstood, ignored and underfollowed,” where vigorous and original research allows the team to identify mispriced securities and the opportunity to outperform. According to Hobson, Ariel’s success has derived from the principles and practices of active patience (“being patient is really hard, it requires great restraint, great study, great discipline”), bold teamwork, and independent thinking – the focused expertise that supports the “conviction to have a different opinion.” This approach made Ariel a pioneer, first in small cap stocks, where the firm’s founder John Rogers tested the long-term value investment thesis, and later in mid cap and international markets. In 2021, Hobson launched Ariel Alternatives, which included its inaugural private equity fund, Project Black, focused on building to scale minority businesses that will be tier one suppliers to Fortune 500 companies, and Project Level, a new vehicle focused on “changing the game” in women’s sports. Given the seismic and secular shifts in the industry, Hobson believes women’s sports are “the next big growth opportunity… the small cap of sports.”
Hobson speaks passionately about all she has learned as a corporate director. Today, she serves on the board of JP Morgan Chase, and was a director of Estée Lauder Companies, DreamWorks Animation, and Starbucks, which she led as chair. She is equally animated by her civic commitments, learning early on it was “part of your job to be of service to others… it was sewn into my DNA.” We discuss the inspiration she finds in her work with a number of nonprofit organizations, including After School Matters, Bloomberg Philanthropies, and the Lucas Museum of Narrative Art, a new cultural institution she has created with her husband and filmmaker George Lucas. Hobson is fervent about the power of storytelling, and her and Lucas’s belief that “everyone’s story matters.” Hobson has captured part of her own story in the New York bestselling Priceless Facts about Money, an immaculately researched and illustrated children’s book that makes learning about money and finance accessible — and fun. And it is in young people that Hobson sees hope, even in challenging times, as they affirm her faith in the wonder and promise of human potential. “If you believe that is true,” she says, “then everything is possible. Not anything — everything.”
Mentioned in this episode:
- John W. Rogers, Jr., Ariel Founder, Chairman, and Co-CEO
- A Random Walk Down Wall Street, (Burton Malkiel, 2024)
- Ariel Alternatives: Project Black, Project Level
- After School Matters
- Bloomberg Philanthropies
- Lucas Museum of Narrative Art
- Priceless Facts about Money, (Mellody Hobson, 2024)