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Statewide: Charlotte region, September 2015

DFA hearts CLT

Charlotte landed a heavy hitter in finance when Austin, Texas-based Dimensional Fund Advisors said it will open its East Coast headquarters in the city. While not a household name, Dimensional is among the fastest growing money managers nationally, with more than $400 billion under management. The company plans to create 316 jobs through 2020, paying an average annual wage of $147,025. That’s about two-and-a-half times Mecklenburg County’s average annual pay. The state could pay Dimensional as much as $10.3 million over 12 years if it follows through on its promises. Jobs will include information technology, investment management and sales.

Dimensional’s investing strategy is mostly quantitative and based on research by University of Chicago economist Eugene Fama, who won a Nobel Prize in 2013. The company uses a mix of active and index-like investing, while emphasizing a view that stock pickers rarely beat indexes. Many of its U.S.-oriented mutual funds have slightly outperformed the S&P 500 index over the last five years, according to data listed on its website. “We buy into the way they invest,” says Chris Sutherland, principal at the Charlotte office of Trust Company of the South, a Burlington-based investment management company. “It frees me up to focus on the things where I can make a difference.” About half of the stock managed by Trust Company is invested with Dimensional, which is mostly owned by its employees and founders.

Adding a Charlotte headquarters will be convenient for meetings with potential East Coast clients. Charlotte’s deep financial talent pool makes it attractive for investment companies, says Dave Perkins, a financial planner at Charlotte-based Carolinas Investment Consulting and chairman of the Financial Planning Association of Charlotte. “What you’ve seen is these really big asset managers, like TIAA-CREF, Babson Capital, MetLife, etc., they’ve all grown and expanded what they have in Charlotte.”

Dimensional, which declined interview requests, picked Charlotte over other cities because of its finance sector, quality of life and big airport, CEO David Booth said in July. The company will spend $105 million on a building to house as many as 600 people, he said. Charlotte’s relatively low costs makes it a natural fit for Dimensional, Perkins says. “DFA was founded by people whose research and philosophy said the market is very efficient and you can’t over time outperform the market. There’s certainly something to be said about keeping it simple.”


Briefs

CHARLOTTEPremier plans to acquire Pittsburgh-based CECity for $400 million, funded by $250 million in cash and $150 million in credit, by Sept. 30. CECity provides cloud-based services such as continuing education for health care companies. Based here, Premier also acquired Healthcare Insights, a Libertyville, Ill.-based software company, for $65 million, its seventh acquisition since raising $874 million in a 2013 initial public offering (cover story, August).

CHARLOTTE — Swisher Hygiene will sell its U.S. operations to St. Paul, Minn.–based Ecolab for $40 million in cash. The deal is expected to close in the fourth quarter. The company, which provides sanitizing products and services to the foodservice and hospitality industries, also sold off its Canadian operations for  $2.8 million.

GASTONIA — Germany-based filter-maker Mann+Hummel will buy Affinia Group Intermediate Holdings, which makes filters and chassis components for automobiles, other vehicles and heavy machinery for $513.3 million. Affinia employs about 5,500 people in 10 countries, including about 1,200 people in Gaston County and has $1.5 billion in annual revenue.

CHARLOTTE — Sonic Automotive named B. Scott Smith, president since 2007, chief executive officer, replacing O. Bruton Smith, his father. The elder Smith, CEO since the company’s initial public offering in 1997, will become executive chairman. Sonic has more than 100 car dealerships in 14 states.

CHARLOTTE — Duke Energy named David Fountain president of North Carolina operations. Fountain, who received bachelor’s, MBA and law degrees from UNC Chapel Hill, joined the legal team of Carolina Power & Light, a predecessor company, in 2000 and has been senior vice president of enterprise legal support. He replaces Paul Newton, who is retiring.

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