The nonstop from Durham

Black Enterprise, May, 1995 by Frank McCoy

THE ENGINE: SLOAN FINANCIAL

The continued success of Sloan Financial is critical to Sloan's ability to finance and maximize the potential of his other enterprises. Depending on the project, funding may be an extension of NCM Capital's business. Other ventures, such as PCS Development, are funded by loans, income from Sloan Financial and other investments.

In 1991 Minneapolis-based IDS Financial Services, now called American Express Financial Advisors (AEFA), purchased a 40% stake in Sloan Financial. Morris Goodwin Jr., an AEFA vice president and Sloan Financial director, says the company's 1993 returns matched projections, but 1994's fell short.

According to Mike Clowes, editor of the industry bible, Pensions & Investments, Sloan Financial ranked 238th in the 1,000-strong fund manager field in terms of tax-exempt assets. Sloan says the company has been in the black since 1991 and that profits have doubled annually since then, although they have not kept pace with asset growth. In 1994, Sloan Financial managed $2.97 billion from four client areas. Public pension funds provided 65%, or $1.9 billion; $740 million or 24% came from corporate pensions and disability trusts; 9%, or $250 million, from labor unions; the remaining 2%, $80 million, was invested for endowments and foundations.

According to Sloan Financial Senior Vice President and Investment Director Clifford D. Mpare, over the past three years the core equity investment performance had an annualized return of 9.15%, versus 6.27% for the S&P 500. The firm's 10 largest holdings are a mix of blue-chip, regional and cyclical stocks such as AT&T Corp., Florida-based Barnett Banks, Caterpillar, Inc. and Philip Morris Co., with one exception: their 10th largest holding, Telephonos de Mexico.

Mpare also allows that Sloan Financial's fixed-income holdings did not fare as well in 1994. In fact, SEI Capital Corp., a Wayne, Pa.-based pension fund analyst, reported that in 1994, the firm's fixed-income/government/corporate bonds were in the bottom quartile, down 4.05%. The intermediate index was down 2.65%. Mpare responds: "Clearly we have had some problems, but we have beefed up our resources, including hiring a new fixed-income director, and see improvements going forward."

NEW HEIGHTS FOR SLOAN

What's next for Sloan? A trio of projects are on tap. The first is Calvert Sloan Advisers, a company that will work with the Calvert Group to create new retail fund products. Second, Beckett will set up Sloan International, which will provide, for a fee, regional specialists to pension funds that want to expand their portfolios into global markets. And third is Sloan Financial Services. By the end of 1995, Sloan wants to create a nationwide network of individual financial planners.

He also admits, with a laugh and a twinkling eye, that this spring he and Beckett may attend the FCC's broadband auction for the next generation of cellular phone licenses. One thing is clear: Sloan intends to soar at altitudes frequented by few other high-flying entrepreneurs,