Holland Capital Management, a prominent Chicago money management firm that is both African-American- and female-owned, will close after 26 years in the investment business.
The firm, named for one of its founders, Lou Holland, has notified clients that it is winding down the investment business, said Rekha Misra, chief operating officer. The firm manages about $2.5 billion, primarily for pension funds and other institutions in the Chicago area, Misra said.
Most of the firm's assets are in a portfolio of large cap growth stocks. It also manages a midgrowth portfolio and the Lou Holland Growth Fund, a mutual fund that belongs to the American Beacon Advisors Family of Funds. On Friday, assets in the mutual fund totaled about $95 million.
Lou Holland began the firm with Monica Walker in 1991. Holland died last year after retiring in 2008 following an Alzheimer's diagnosis. Walker is the current chief executive and chief investment officer, and is interested in working outside the investment business after the firm closes, Misra said.
While winding down accounts over the next 60 days, Walker will continue to handle investments along with co-portfolio manager Carl Bhathena and three analysts, Misra said. Senior analysts Dan Romanoff and Nick Zimmerman recently resigned, although Zimmerman is continuing to work on the wind-down.
The company, like others that manage large-cap and mid-cap stock investments, has been challenged by shrinking fees and a change in investor preferences, Misra said.
During the last few years, index funds have increasingly been in demand and investors have used fewer active managers. Active managers, who try to pick the best stocks, tend to charge more than index funds, which simply copy the stock market or a portion of the stock market.
"We don't know how long the trend will last, although we think it will eventually abate," Misra said.