Piedmont advisors reaches $1 billion in assets: company philosophy stresses diversification and trustworthiness.

DURHAM, NORTH CAROLINA-BASED PIEDMONT INVESTMENT Advisors L.L.C. recently hit a milestone. The company that once had a hard time attracting clients is now enjoying the fervor of customers who are increasing its funds under management--causing the firm to spill over the $1 billion mark. The cherry on top for Piedmont was landing a $5 million investment from St. Louis-based Amalgamated Transit Union Local 788.

"Such an accomplishment opens the door for other sponsors who did not have interest [before] or the flexibility," says Isaac H. Green, Piedmont's president and chief executive officer, adding that many institutional clients, including pension plans, college endowments, charitable funds, and foundations, hesitate to do business with companies less than 5 years old or that have less than $1 billion in assets.

Green, who left his six-figure salary at Loomis Sayles in 2000 to start the business with two colleagues, says the investment firm emphasizes a risk-aware portfolio strategy that can produce attractive returns and a high degree of consistency for clients. Many in the institutional investment arena were taking more risks in the late '90s. "There was a need for a new voice in the marketplace. The idea that got us started was that you really had to emphasize diversification in portfolios so that the volatility of your returns would be acceptable."

Cashing out his stock options at Loomis provided Green with $500,000 to cover the subscription costs of the research services needed to examine the industry and to develop the company's unique product and proof statement. But the initial investment was hardly enough to pay for start-up costs and fuel the momentum to grow the company. What little money was left went toward salaries for the company's two partners, Dawn Alston Paige and Sumali Sanyal, who both left Loomis to become senior vice presidents of Piedmont and who, along with other management staff, subsequently invested $750,000 in the company. Green and his partners knew they'd have to find investors quickly to get the company off the ground.

They talked to several African American-owned financial institutions and ultimately landed investors such as North Carolina Mutual Life Insurance Company and Mutual Community Savings Bank, which contributed $1.5 million combined. "These two companies had significant corporate asset portfolios, and they hired us to run and manage them. So that gave us better than $100 million in assets under management. That was kind of table stakes," recalls Green. "With $100 million in assets under management, people would at least talk to us. If you have less than $100 million, you are not really in the game."

The company's second major break came in 2002, when the State of North Carolina hired Piedmont to manage a portion of its $60 billion pension plan. Prospective clients that had waited in the wings started signing on, including the Detroit General Retirement System, Howard University, and Progress Investment Management Co. Piedmont, primarily an institutional firm, turned its first profit in 2004, and in June had almost 40 clients and $854 million in assets under management.

In July, four of those clients increased the amount of assets that Piedmont would manage, in total about $170 million. Then $5 million from Amalgamated Transit Union Local 788 pushed Piedmont to $1.029 billion in assets under management.

"The investment business is based on trust," says Green. "The most important criteria to have, to give your money to somebody to invest, is trust. That means you have to believe that their investment strategies make sense and that they have the expertise to carry them out successfully."

--Nicole Marie Richardson

Additional reporting by Mashaun D. Simon