The color of money.

Maceo K. Sloan admits NCM Capital is a company built on guilt, and business couldn't be better.

In 1987, Maceo K. Sloan and his right-hand man, Justin F. Beckett, went to Louisiana to scare up some business for their new NCM Capital Management Group Inc.

No one said it would be

But Louisiana had just passed a law directing government bodies to do 10% of their business with minorities. So Sloan and Beckett kept visiting pension-fund managers of public agencies and other groups.

Then one night at a public hearing, Sloan recalls, they got a taste of how hard it was going to be. "One of the members of the board stood up and said, 'I know that the law says we have to do 10% of our business with minorities. But we're going to have to find out some kind of way to get some janitorial supplies from them or let them cook us some food. We can't let them mess with our money, because if they mess it up, we're all in trouble.'

"This is the attitude we were up against," Sloan says. "Black folks are OK in their place, and money management is not their place."

But Sloan, who is so confident he's just short of cocky, was prepared for buyer resistance: "We had a lot of people tell us, 'It sounds like a decent idea, but I'm not going to be your first customer.'"

Although eight months passed before NCM Capital got its first two accounts, which turned out to be unions rather than government agencies, NCM Capital now has more than 50 clients, including IBM, K mart, Pacific Gas and Electric and the city of Dallas. Its six portfolio managers -- five blacks and one white -- baby-sit more than $1 billion in assets. Pensions and Investments magazine named NCM Capital the nation's fastest-growing money manager for 1987-91.

But the real stamp of approval came in July, when IDS Advisory Group, an American Express Co. division, acquired a 40% stake after NCM Capital's bought the company from N.C. Mutual.

All this just confirms what Sloan, 42, set out to prove: that gray matter means more than skin hue. "Money is green. The predominant color of America is green," he says. "If you go to someone and show them how you can help them do what they want to do for less money or less hassle, they'll do business with you."

But as green as Sloan's money may be, there's no denying that NCM Capital's niche is white guilt -- in the form of minority set-asides.

"What it's called is taking advantage of an opportunity you see in the marketplace," Sloan says. "It's called entrepreneurship. ...

"We're not saying give us anything just because we're black," he says. "We say stop not giving it to us just because we're black. ... |We're saying~ give us a chance to be fired."

Says NCM Capital's Director of Research Isaac Green: "If America really felt guilty, it would cut black folks a check for the 300 years they worked for them and didn't get paid."

NCM Capital's track record is good on bonds, analysts say, and average for stocks. And that's all right because the company doesn't really need stellar performance to succeed. NCM Capital is "clearly a marketing success story," Green says. "Maceo Sloan invented a whole new product.

"People knew they didn't want it. They thought they didn't need it. And it was his job to make sure they couldn't live without it. And that's exactly what he's done."

Whatever the source of NCM Capital's success, Sloan figures there's plenty more where that came from. He estimates the amount of money in all pension funds is something like $4 trillion. Ethnic minorities easily make up 20% of the population. To be on the conservative side, Sloan divides the 20% in half because most minorities make less than whites. That means there's $400 billion out there, and NCM Capital has only 1/400th of that.

Minneapolis-based IDS was taken with those numbers and NCM Capital's growth, says Morris Goodwin, vice president and treasurer of IDS Advisory. "What really got our attention was that the company had done extremely well in developing client relationships," he says, "and they did it in a manner and in a form that was consistent with the way we like to do business -- i.e., building long-term relationships."

Did American Express go for the deal because it would help sell credit cards to minorities? "Oh, no," Goodwin says, "our point of view is much more selfish than that. ... People who were qualified minorities in the investment business are not going to think of Minneapolis, Minn., as the first place to go to build a long-term investment career. So we were hoping that through our association with NCM that people would form a more positive image of working for a company way up here in Minnesota."

But what really impressed IDS, Goodwin says, was Sloan and the people he's hired.

Take Isaac Green, for instance. After earning an undergraduate economics degree from Duke, the Henderson native got his M.B.A. from Columbia University. Green figured he'd have to work in New York City, but when NCNB made him an offer, he jumped at the chance to return to his home state. In four years, he had worked his way up to senior research analyst.

Like Sloan, Green got into money management because it was different: "It's an industry that black folks aren't participating in and don't know about." Says Beckett, who is now the company's senior vice president: "We are all anomalies. If you said to the average Joe on the street, 'I've got a black guy under 35 years of age making over $50,000. What's his profession?' You'd get athlete, drug dealer or entertainer. But money manager? That'd be the last thing you'd hear."

In 1988, Green took a pay cut to join NCM Capital. "In my mind, I was coming back to work for North Carolina Mutual -- or, as we used to say, we were coming back to play for the home team."

N.C. Mutual was founded in 1898 by John Merrick, a barber, and Dr. Aaron McDuffie Moore, Sloan's great-granduncle. Working at first out of Moore's office, they insured blacks unable to find reasonable premiums through white companies. The company "with a soul and a service" grew by selling life, health and fire insurance and by making mortgage loans.

It spawned banks, a fire-insurance company and a host of small businesses. But its biggest local contribution may have been to make Durham's blacks financially independent enough to speak out and aggressively stand up for their rights. Ironically, the very civil-rights movement that N.C. Mutual supported has wound up denting its business.

Competitors went after middle-class blacks, who, like others, buy insurance based more on price than the race of the salesman. Over the years, N.C. Mutual lost some of its best customers. And because a majority of its policyholders are blacks -- who tend to get sick more often and die younger than whites -- N.C. Mutual's profit margin is slimmer than competitors'.

Sloan grew up hearing about N.C. Mutual's difficulties from his family. His father, Maceo A. Sloan, joined N.C. Mutual in 1938 after getting his bachelor's degree at Prairie View College in Texas. He began as an agent in Richmond, Va., and moved with the company to Petersburg, then to Philadelphia.

He met Charlotte Kennedy, daughter of William Kennedy Jr., who would later become president, at a company conference in Durham, and they married in 1943. It was in Philadelphia, where his father was an assistant district manager, that Maceo K. Sloan was born.

The elder Sloan moved to the home office in 1955 and advanced rapidly. He earned a reputation as driven, dedicated and determined to succeed. "North Carolina Mutual was his life," says Bert Collins, president and CEO of N.C. Mutual.

"He was very focused and expected people who worked for him and worked around him to work hard and be dedicated like he was," Collins says. The senior Sloan climbed the ladder at N.C. Mutual, becoming executive vice president and chief operating officer before he retired in 1983.

Not bad for a Newport, Ark., farm boy. "Dad picked cotton," says Sloan, a grin slowly spreading across his face, "before he went to school and after he came home. And he walked to school each day -- both ways uphill." Joking aside, Sloan says his father was determined to succeed in everything, and he made sure his son learned that trait. The elder Sloan's nickname at N.C. Mutual was "the Ayatollah."

"His dad used to say anybody who sleeps over four hours in a 24-hour period is lazy," says Cicero M. Green, who worked with the Sloans at N.C. Mutual as treasurer and then senior vice president.

Says his wife, Melva Sloan: "He grew up with a father who had a work ethic that evolved from starting from nothing and striving for everything." His mother, on the other hand, inspired her children to develop inner strength. Durham's black community also expected a lot from the descendants of the founders of N.C. Mutual.

"With these examples growing up and knowing a lot of the executives in these various companies," Sloan says, "I believed that being black did not keep me from doing anything. ... You grew up believing opportunities would come along, and what you needed to do is to concentrate on being sure you were prepared to take advantage of them when they did come along."

To get that preparation, Sloan's parents sent him to Morehouse College, a prestigious Atlanta school for black men founded in 1867. Sloan started out in math so he could be an actuary, but "I realized I didn't have the type of personality to sit and work with numbers all day." Early on, he switched his major to business administration and economics with an emphasis on extracurricular activities.

"I had more fun in college than at any other time in my life," he says. "I made all the parties, pledged the fraternity, did all the fun things you're supposed to do in school and was not the most serious student in the world."

Although well on his way to 6-foot-7, he didn't make the basketball squad. "I was rail thin," he says. Instead he became the team's statistician, played tennis and was captain of the bowling team.

Business and economics, he says, turned him on: "It made a lot of things that I'd been doing -- and didn't know why -- make sense." As a child, he was quite an entrepreneur, he says, washing and waxing cars, selling Christmas cards, hawking magazine subscriptions and peddling seeds door-to-door.

A month after he graduated in 1971, he married Melva Wilder, a junior design student at Spelman College, and took a job with Prudential Insurance Co. in Atlanta while his wife finished school.

"I was a multimillion-dollar producer my first year," Sloan says. Most beginning agents would have taken the easy route and sold policies to friends and relatives. Not Sloan. "Not only does he march to a different drummer," his wife says, "but he plays his own tune."

Sloan went after small businesses, particularly start-ups that were doing well, and sold them policies for group plans, key-man insurance or buy-sell agreements in the event of a partner's death.

After a year, Sloan decided to go to night school at Georgia State University and pick up an M.B.A. After all, everyone else in his family had an advanced degree. His manager at Prudential pooh-poohed the idea: "What basically he was saying is, 'Black folks don't need advanced degrees. You're doing fine. You're making enough money right now. Stay in your place.' ...

"I told him to take his job and shove it."

Sloan didn't just want an M.B.A. He wanted one his way -- ASAP. So he approached Georgia State officials and told them he'd figured out how to complete an M.B.A. in finance in a year. No way, they said. But he talked them into letting him carry a double load as long he maintained a B average. He started in September 1972 and finished with honors the following July.

As Georgia State's only black M.B.A. graduate that semester, he got several offers from major financial institutions, manufacturers and insurance companies. But he had already promised his parents that he'd give N.C. Mutual a try.

Sloan's first job there, in '73, was as an investment-analyst trainee. He spent about three years learning the operation.

"It took some adjustment," Sloan says. Indeed. Sloan -- impatient, quick to question, full of ideas and ever one to do things his own way -- was uneasy with the bureaucratic, ultraconservative, paternalistic, earn-your-stripes ways of a policy-holder-owned insurance company.

"One of the problems with coming back to where you grew up is everyone remembers you as a child and wants to treat you as such," Sloan says, frowning. "And that goes on for years after you've come back. ... They think you should sit back, be quiet and wait your turn.

"And I've never been the type of person to sit back and be quiet and wait my turn." Still, Cicero Green says, Sloan did well at N.C. Mutual because he was bright and willing to learn a little forbearance. "He's never been a conformist, and there are those who view his not readily conforming as a mild form of arrogance," says Green, who was Sloan's boss when he joined the company. "But at the same time I find he is a wonderful team player.

"He just questions everything. If you satisfy his curiosity, you'll find there is no one more supportive of a project than he is."

Says Green: "He came in ready to run the company and take the company off into being the greatest insurance company on the face of this earth. I just had to sit on him and hold him down and tell him, 'These things can be done, but not in the period of time you think they can be done.'"

"He kept me from doing anything stupid," says Sloan of his mentor. "I was somewhat impetuous."

Sloan climbed through the ranks at N.C. Mutual. In 1977, he was promoted to assistant to the treasurer -- at that time, Green. In 1983, when Green became senior vice president of finance, Sloan moved up to treasurer. His job at N.C. Mutual must have kept him only moderately occupied, though. While working there, he earned a law degree at North Carolina Central University in 1979, lectured as a financial analyst, served as an expert witness, plus taught and practiced law.

Sloan was vice president and treasurer when he quit to set up NCM Capital. He eventually hired Green, who, after retiring from N.C. Mutual, joined NCM Capital in 1990 as chief operating officer. He is now a senior vice president.

Sloan's success is in marked contrast to N.C. Mutual's declining fortunes. The insurance company has reported an operating loss for five consecutive years, including $981,451 in 1990. Since 1986, N.C. Mutual's surplus -- the equivalent of equity in a stock company -- declined from $21.5 million to $9.5 million on Dec. 31, 1991.

Sloan, N.C. Mutual and IDS Advisory Group decline to disclose NCM's sales price. But if revenues were in the $3 million range and the company had about $900 million under management, NCM Capital would be valued at somewhere between $8 million and $11 million based on the price of 34 investment-management companies that were sold in 1989.

Sloan says he thinks N.C. Mutual sold NCM Capital because "they needed the money to put back into the insurance arm. ... It's as simple as that." Collins says, "It was good for both parties. It was win-win." But, Collins adds, the money "helped the surplus." In fact, N.C. Mutual showed an operating gain for the first six months of '91 of $1.2 million and a rise in surplus to $16 million.

Sloan first approached N.C. Mutual about starting a money-management division in 1973, when the company was getting into the reinsurance business. Throughout the '70s and '80s, N.C. Mutual successfully persuaded some Fortune 500 companies to allocate 1% to 5% of their group coverage to N.C. Mutual. Although the prime carrier still collected the premiums, paid the benefits and handled the paperwork, N.C. Mutual got a share of the loss or profit as a reinsurer.

In the late '70s, Green and Sloan had an inspiration: If big companies would give a minority-owned insurer a piece of their group coverage, why not get them to turn over part of their pension fund to a minority-owned money manager?

The idea was slow to sprout in the company's chilly, conservative climate. "It was approved by the finance committee in 1978," Sloan says, "but it was not funded until 1986. ... They didn't believe it could be done. Some thought it was a pipe dream."

John W. Rogers Jr. helped change their mind. In 1983, he took $500,000 and two years of experience and within six years turned it into a minority-owned money-management business with a portfolio close to $1 billion. His Chicago-based Ariel Capital Management Inc. searches out small and medium-sized companies with low stock prices and big futures. The company now manages $1.5 billion.

Others, including NCM Capital, followed. Sloan says his company was one of three minority-owned investment managers when he started. Now, more than 100 are operating, including a start-up by Detroit Pistons star Isiah Thomas and ex-Piston Dave Bing.

NCM Capital has a good reputation, and Sloan is charismatic, says Bob Marren, a senior research analyst with Chicago-based SEI Capital Resources. Compared with the hundreds of other money managers Marren's company follows, NCM Capital's track record is "right in the middle of the road." Compared with other minority-owned companies, its performance is a little better than average, he says.

NCM Capital's investment strategy has been to find sound companies that are out of favor with most investors. This is done by using computers and a team approach.

"Maceo insists that we're not going to have a star system," Beckett says. "We're the Boston Celtics of old -- not the Lakers. We don't have a Magic Johnson. ...

"One of the curses of minority shops," he says, "is they have one person who does it all, and if that person gets run over by a bus or something, they're out of luck." A seven-member investment-policy committee meets each Monday and sets a course for the rest of the week. Sloan, though is clearly the leading force, Beckett says.

Twice a month, they rank about 1,000 issues, based mainly on value and earnings potential. A computer program drops those with erratic performance, market capitalization below $100 million, credit rating below Standard & Poor's BB or dividends that are too high. Investment managers then cull the survivors.

Michael Blair, director of Interstate/Johnson Lane's investment-consulting services, says NCM's bond-market performance is good, but calls its equity management "mediocre" -- a reflection of Sloan's strategy.

"Value has sort of been out of favor for the past two years," Blair says. "Every investment style has its day in the sun, and value will come back."

Sloan says IDS, as a 40% investor, has no more than 40% control of NCM Capital, with two of five board seats. Twelve of NCM Capital's 30 employees own stock in the company. IDS does oversee its finances. (One of the IDS representatives on the board has to vote yes before NCM Capital's budget is approved.) And NCM Capital can't do certain things -- such as sell out -- without IDS's approval.

But Sloan insists that IDS will let the company alone. NCM Capital, on the other hand, will have access to IDS's expertise as it expands.

"We don't intend to be involved in the day-to-day management of the company at all unless he needs us," IDS's Goodwin says.

Now Sloan is ready to branch out. Ideas range from a real-estate branch eager to acquire Resolution Trust Corp. properties, to a separate division to manage personal portfolios or set up a mutual fund.

Though still involved with outside activities, Sloan stays too busy at NCM Capital to do as much moonlighting as he used to. He is on the boards of visitors for UNC-Chapel Hill, the Center for International Studies at Duke and N.C. Central's law school and the boards of directors for Durham's United Way and Urban Ministries.

Former civic affiliations take up two pages of his five-page resume and range from the American Dance Festival and Art Guild to the Girl Scouts.

As friends and associates will tell you, Sloan is a very private person. He does not like to talk about himself or his family. He belongs to an integrated church -- the Cole Mill Church of Christ.

He is a "scratch bowler." ("I had aspirations to go on the pro tour, but my family discouraged it.") He says he plays golf to network and tennis for enjoyment. But what he focuses on after hours, he says, is his family. He has two children, a son, 16, and a daughter, 9.

For vacations, he favors skiing in Colorado and Utah, summer trips to Martha's Vineyard and infrequent jaunts to Europe. But there's another side to Sloan. He has a foster son, whose mother is a single parent unable to afford some of the advantages Sloan's family can offer. Sloan is paying for his college education.

That fits with his belief that the troubles plaguing many black Americans -- drug abuse, poverty, single-parent households, unemployment and all the rest -- are really economic problems. "If you separate out poor whites from the rest of whites, you'll find the same kind of problems poor blacks have -- it's an economic thing rather than a racial thing," he says.

The way to get off that treadmill, he says, is through entrepreneurship. "The only way we're going to be able to break that cycle is by developing a significant number of minority-owned businesses so we have economic independence.

"The color of power in America is green," Sloan says.

That's why he would like to make a lot of money: "I would like to get to the next level," he says. "I want to do what Bill Cosby did -- to give $20 million to Morehouse like he gave $20 million to Spelman."

Says Sloan: "If this thing works, I can make an impact on this country. We have the opportunity to make the same type of impact that N.C. Mutual made when it was started ... and that's a rare opportunity."

Maceo K. Sloan

Education:

Morehouse College, 1971, B.A., business administration and economics Georgia State University, 1973, M.B.A. (with honors) North Carolina Central University, 1979, J.D. (cum laude)

Work experience:

Prudential Insurance Co., 1971-72, agent North Carolina Mutual Life Insurance Co., 1973-86, investment analyst, treasurer, vice president and chief investment officer NCCU School of Law, 1979-86, adjunct visiting professor NCM Capital, 1986-present, chairman, president and CEO

Other affiliations and experience:

Institute of Chartered Financial Analysts, 1979-present Employee Retirement Income Security Act, advisory council, June 1991-present College Retirement Equities Fund, board of trustees, August 1991-present Mechanics and Farmers Bank, chairman of trust committee, 1986-present PBS's Wall Street Week in Review, panelist, 1989-present Durham City Council, 1981-83 Durham Board of Adjustments, chairman, 1979-81