Richard A. Barone
Encyclopedia
Richard A. Barone is an American stock investor, investment advisor
Investment Advisor
The term Investment Advisor is an individual or firm who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities...

, financial analyst
Financial analyst
A financial analyst, securities analyst, research analyst, equity analyst, or investment analyst is a person who performs financial analysis for external or internal clients as a core part of the job.-Job:...

 and mutual fund
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...

 manager. After working for a regional broker/dealer in Cleveland, Ohio
Cleveland, Ohio
Cleveland is a city in the U.S. state of Ohio and is the county seat of Cuyahoga County, the most populous county in the state. The city is located in northeastern Ohio on the southern shore of Lake Erie, approximately west of the Pennsylvania border...

, he founded Maxus Investment Group in 1973, which he sold to Fifth Third Bank
Fifth Third Bank
Fifth Third Bank is a U.S. regional banking corporation, headquartered in Cincinnati, Ohio and is the principal subsidiary of holding company Fifth Third Bancorp ....

 in 2001. He is currently the Chairman of The Ancora Group, an investment company with Broker-dealer
Broker-dealer
A broker-dealer is a term used in United States financial services regulations. It is a natural person, a company or other organization that trades securities for its own account or on behalf of its customers....

 and Investment advisory
Investment advisory
An Investment advisory, in financial/investment organizations, is the unit linking the investment professionals in the central asset management unit to the relationship managers and/or to important clients of the asset management organization.Investment Advisors explain the investment ideas of the...

 subsidiaries.

Career in the 1990s

In 1992, Maxus purchased Daley & Company, a small Cleveland investment firm from Wedbush Securities
Wedbush Securities
Wedbush Securities Inc. is a privately-held financial services and investment firm that provides private and institutional brokerage, investment banking, equity research, fixed income, public finance, correspondent clearing, and asset management to individual, institutional and issuing clients...

. Daley was a discount broker/dealer, which was losing money in its effort to compete with the likes of Charles Schwab
Charles Schwab
Charles Schwab may refer to:*Charles M. Schwab , American steel magnate*Charles R. Schwab , founder of the eponymous brokerage*Charles Schwab Corp., an American based brokerage firm...

 and Scottrade
Scottrade
Scottrade is a privately owned American discount retail brokerage firm headquartered in St. Louis, Missouri. Its Founder, President and CEO is Rodger O. Riney. Scottrade has 500 branch offices around the U.S...

. The acquisition of Daley produced immediate profits, however, as Barone's Maxus Investment Group closed the Daley offices and substantially reduced its overhead by moving the entire operation to a single individual on the Maxus trading desk.

Maxus was able to expand assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...

 with the purchase of Gelfand Partners. The acquisition doubled the size of assets under management and diversified the product offerings to include fixed income. The combined companies would have $2.0 billion in assets under management. Terrence Johnson of The Cleveland Plain Dealer called Barone "a self-described dreamer that has single-handedly turned a three-man operation...into one of the biggest players in Cleveland's money management sector."

Recent career

Barone sold Maxus to Fifth Third Bank
Fifth Third Bank
Fifth Third Bank is a U.S. regional banking corporation, headquartered in Cincinnati, Ohio and is the principal subsidiary of holding company Fifth Third Bancorp ....

. In 2000, Fifth Third was looking to acquire a value manager as well as to reorganize its asset management operation. In January, 2001 Fifth Third completed its acquisition of The Maxus Group from Barone. The merger came at a time when banking reform law allowed banks, brokerages, and insurance companies greater freedom to merge. According to Barone, the purchase of his company by Fifth Third was necessary to compete in the current climate. "With what's going on in the industry today, we thought we needed to team up with a premier institution to be able to offer our clients a greater product line and services."

Barone is currently Chairman of the Executive Committee and Chairman of the Board of The Ancora Group which he founded in 2001. Ancora manages private wealth, institutional funds, and the Ancora Family of Mutual Funds. He continues to manage a variety of investment strategies and address audiences on a number of topics.

Business philosophy

Barone's investment philosophy that has been developed over the last 40 years is based on value investing
Value investing
Value investing is an investment paradigm that derives from the ideas on investment and speculation that Ben Graham and David Dodd began teaching at Columbia Business School in 1928 and subsequently developed in their 1934 text Security Analysis...

. Utlimately, it is about what a company is worth in a private transaction, according to Barone. There are several areas of value that Barone believes are important in an investment transaction. They include branded products, pricing power, and hard asset value. In addition to looking at these areas of value, Barone believes the use of EBITDA
EBITDA
EBITDA is an acronym for earnings before interest, taxes, depreciation, and amortization. It is a non-GAAP metric that is measured exactly as stated. All interest, tax, depreciation and amortization entries in the income statement are reversed out from the bottom-line net income...

 analysis is important to understanding what a company would look like in a private transaction. According to Barone, volatility and uncertainty are good for investment opportunities, not a detriment. "When we see prices drop, that just means we're buying businesses at even less."

Community projects

In 2002, Barone joined the Board of the Cleveland State University
Cleveland State University
Cleveland State University is a public university located in downtown Cleveland, Ohio. It was established in 1964 when the state of Ohio assumed control of Fenn College, and it absorbed the Cleveland-Marshall College of Law in 1969...

 Foundation. The Foundation works closely with Cleveland State's Office of University Advancement on fund raising projects. In 2008, Barone became Chairman of the Cleveland State University Foundation. In that same year, Barone became a community member of the Cleveland State University Board of Trustees.

In 2007, Barone was elected to the Board of Directors of The Stephan Company, a manufacturer and distributor of haircare and skincare products.

In January 2008, Barone was elected to the Board of Directors of The Brentwood Foundation. The Brentwood Foundation, now part of the Cleveland Clinic
Cleveland Clinic
The Cleveland Clinic is a multispecialty academic medical center located in Cleveland, Ohio, United States. The Cleveland Clinic is currently regarded as one of the top 4 hospitals in the United States as rated by U.S. News & World Report...

 Health Organization, was established in 1994 as a charitable trust dedicated to the promotion and advancement of medical education, clinical research, and community initiatives that impact health and wellness in the field of osteopathic medicine.

In the Fall of 2008, Barone was elected to the Board of Directors for the Hospice of the Western Reserve. He began serving his tenure in January, 2009. Prior to being elected to the Board of Directors, Barone provided both financial and investment consulting services to the organization, which provides hospice services throughout Northeast Ohio.

On March 31, 2009, Barone was elected to the Board of Directors of Mace Security International. Mace Security International offers personal defense sprays, home and business surveillance and security, automotive security and child safety and security. Dennis Raefield, CEO and President of Mace, said "we are excited to have Mr. Barone as a member of the Mace Board as he was elected by a unanimous vote. Mace is currently executing an aggressive turnaround strategy and we welcome Mr. Barone's guidance during this time as we strive to increase sales."

Residence

He lives in Sarasota, Florida
Sarasota, Florida
Sarasota is a city located in Sarasota County on the southwestern coast of the U.S. state of Florida. It is south of the Tampa Bay Area and north of Fort Myers...

 with additional residences in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

 and Cleveland, Ohio
Cleveland, Ohio
Cleveland is a city in the U.S. state of Ohio and is the county seat of Cuyahoga County, the most populous county in the state. The city is located in northeastern Ohio on the southern shore of Lake Erie, approximately west of the Pennsylvania border...

.

External links

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