The unsinkable Mellody Hobson (pg. 3)
Rogers was initially taken aback by Hobson's suggestion - not to mention her moxie - but ultimately agreed. "She went out and did a lot of heavy lifting and convinced our board and myself it was the right thing to do," says Rogers. Hobson decided to prove her commitment to Rogers by borrowing $1 million, which she put directly into Ariel stock. It was during that period, she says, that "Ariel became my firm."
By 2000, when Hobson was 31, she had worked her way up to president of Ariel. Mutual fund compensation is not publicly disclosed, but Hobson says she owns about 10% of the business, worth an estimated $25 million. And despite his title, CEO Rogers says the two are equal partners in the leadership of the business, not to mention best friends.
Hobson has also been an important brand ambassador for Ariel, thanks in part to her regular gig commenting on financial matters on Good Morning America and in columns for Black Enterprise magazine. Some might see a conflict in the notion of a fund executive giving personal finance advice, but Hobson says she rarely recommends particular stocks and never pushes Ariel funds. She does acknowledge, however, that investor calls expressing interest go up on days she's on the air. "As a byproduct, it strengthens the Ariel brand," she says, "but that's not why I do it."
Hobson's profile also has grown because of her increasing presence on the film and awards circuit on the arm of Lucas, whom she has been dating seriously for about two years. The two were an item at the Cannes Film Festival this year, and Lucas accompanied Hobson to this winter's Hip-Hop Summit Action Network awards dinner, where she was honored for her work with the black community, along with the likes of rapper Snoop Dogg - not exactly a regular on the financial rubber-chicken circuit.
Politics and education are Hobson's twin passions. She hosted her first fundraiser for Barack Obama back in 1995, when he was running for the Illinois state senate, and worked on friend and fellow Princeton alumnus Bill Bradley's campaign for President in 2000. In the current cycle she's been an active fundraiser for the Obama campaign and openly supports him for President, as does Rogers. The two held an event at Ariel's offices in July, with Warren Buffett as a special guest.
Some have hinted that Hobson - or Rogers, who is very close to Michelle Obama's brother - could end up with an economic advisory role in Washington. Hobson demurs, saying only that she'd "never be so presumptuous," and underscoring the fact that she is loyal both to Ariel and to her mission to improve financial literacy for underprivileged groups. "I'm the only one of my Princeton classmates who still has the same work phone number I had after graduation," she says. "That's not an accident."
In 1996 she and Rogers, working with a Chicago public school district, started Ariel Community Academy, a public school on the South Side of Chicago focused on financial matters. Using money provided by Ariel, the school has developed a curriculum that teaches investing and grants each class $20,000 to manage. By the time the students are in sixth grade, they control the entire portfolio. When the kids graduate from eighth grade, the principal is returned to the first graders, who reinvest it. Profits are split between the kids and a charity they choose (although Ariel gives an extra $1,000 to each student who agrees to put his share of the profits into a fund for college). Although the class that graduated in 2008 made almost $8,000 - only a 4.3% average annual return - the impact goes beyond the kids.
"Mellody was really instrumental in teaching me and several of the teachers about personal finance," says Lynnette Coleman, Ariel's principal. "She's been like a mentor to a lot of us here." Hobson visits the school frequently and invites students to the office; she donates her pay from appearances on Good Morning America directly to the school.
Although Hobson relishes her role as a trailblazer for both women and minorities in her field, she also admits that it is not often easy. She says she refuses to be defined by race or gender, yet she feels that some people still judge her that way on a regular basis. "I can't tell you the number of times I've been in a room, and the expectations are so low. I see people looking at me, going, 'Oh ... she is smart.'" Her role - and her perfectionism - also put more pressure on her to succeed. "We cannot afford to fail," she says. "I feel pressure to not disappoint the community. A lot of people sacrificed for us to get here. So if I screw up, it's on me."
If those feelings lurk below the surface, it's not obvious a few weeks later, as the markets go into free fall and investors begin to wonder whether they should pull their money out of the market and put it under the mattress. Cool as can be, radiant in a red suit, Hobson looks straight into the camera from the set of Nightline and utters the kind of soothing words people want to hear. "No one assumes that Galveston, Texas, will never come back," she says. "The only way to get rich is to be a contrarian."