BLACK FIRM AIMS TO ADD $1B IN MANAGED ASSETS WITH ‘INTRINSIC VALUE INVESTING’ APPROACH

By Jefferey McKinney

Having a clear understanding of a company’s investment value, forming partnerships, and expanding its client base—Channing Capital Management is applying those strategies to help fuel current and long-term growth. The Black-owned, Chicago-based boutique investment management firm is projecting assets under management will hit $5 billion in 2025, up from just over $4 billion last December. The firm also predicts a 20% gain in revenue this year. (No dollar figures were disclosed.)

Founded by Rodney Herenton and Wendell Mackey in 2003, Channing has blossomed from an initial $70 million in seed assets. Channing, which in January 2024 celebrated its 20th anniversary of landing its first client, has regularly made the BLACK ENTERPRISE Asset Managers list.

Now, the firm is positioning itself for sustained growth. It expects revenue growth this year will come from a continued emphasis on its research-intensive intrinsic value investing strategies led by small-cap investing and expanding its subsidiaries, Channing Global Advisors and Channing Alternatives LLC.  

BE connected with Herenton and Mackey via email to discuss their firm’s growth prospects. 

“We are energized as we look at the next twenty years of growth,” Herenton said. “From the day we launched, we were determined to build a firm focused on delivering exceptional value to our clients through a strategy grounded in intrinsic value investing.”

Mackey agreed, adding that approach has helped the firm navigate market fluctuations and yield success for its clients. As co-founders and co-CEOs, Herenton and Mackey complement each other. Herenton, a Memphis native, and Mackey, who has Chicago roots, are utilizing their talents to excel in one of the nation’s most competitive and volatile industries.

Generally, intrinsic value has been described as what a company is worth based on its fundamental business and other metrics. Legendary investor Warren Buffett supposedly uses the investment method. 

At Channing, Herenton oversees business development and business strategy. Mackey is the firm’s chief investment officer and lead portfolio manager of its flagship small-cap strategy.

Their efforts over the past two decades have helped Channing establish key partnerships with notable and reputable institutional investors. That includes working with large state, county and city pension funds, Fortune 500 corporations, endowments, foundations, unions, wealth management platforms, and family offices.

Channing intends to use its intrinsic value investing style to fuel growth over the next 20 years, Last October, the firm reported it made a powerful strategic move by launching Channing Alternatives, which fosters growth by making investments in asset classes non-correlated to public equity markets.

Channing reports its inaugural strategic ally, Preserver Partners, is among the industry’s rare African-American woman-owned hedge funds. “Preserver, through its collaboration with Channing, is strategically positioned to further amplify its growth in alternative investment strategies to meet burgeoning market demand,” Mackey says.

In 2017, Channing helped establish Channing Global Advisors, a provider of emerging-markets and international equity strategies to institutional clients. That business reportedly had assets over $500 million last December, making it poised to play a substantial role in driving Channing’s overall growth.

Still the main challenge for Channing is to continue to expand its customer base, where most of the firm’s clients are public and corporate pension funds.

“We want to bring in new clients from different areas like 401(k) plans, endowments and foundations, and individual investors,” Herenton said. “To tackle this challenge, we’re focusing on promoting our new investment options, like the small-cap value mutual fund we introduced in the last 48 months. This will give these investors a chance to use and benefit from our strategies.”