AJO, LP Profile
AJO, which stands for Aronson, Johnson, and Ortiz, is an employee owned institutional investment manager that was established in 1984. The company is based out of Philadelphia and also has offices in Boston, and is currently wholly owned by 18 active principals. The company utilizes “an active, value-oriented approach and a highly disciplined, quantitative process to build diversified, fully invested portfolios of U.S. and emerging markets equities for large, tax-exempt institutions.” AJO currently provides its services to a variety of clients including pension and profit sharing plans, which make up a third of its total client accounts alone, and state and municipal entities, investment companies, charities, corporations and other businesses, pooled investment vehicles, insurance companies, and banks, among others, listed in order of decreasing client accounts. The company currently holds 128 accounts in total with almost all of its accounts being discretionary accounts. The company has approximately $26 billion in total assets under management, which averages out to around $200 million per account. Although its number of accounts hold has been going down since 2010, its total assets under management has increased from $15.9 billion five years ago to its current amount today. The company’s investment philosophy is value oriented but also considers management, momentum, and sentiment. AJO believes that the stock market is reasonably efficient and complex, noting that “opportunities are best exploited with a systematic, quantitative approach.” The company’s fundamental valuation focuses on earnings yield as one of the most robust measures of a stock and examines price driven measures from both the balance sheet and income statement, benchmarking its portfolio performances against the various Russell Indexes, S&P 500 Indexes, and Citigroup 3-Month T-Bill Index. The company mainly invests in the finance sector, which along makes up over a quarter of its total assets allocated. Its line of products include the AJO Top Cap, Large Cap, Emerging Markets, and Managed Volatility funds.