Gerald B. Smith blazed a trail in bonds

At 73 years old, Gerald B. Smith can look back at a career in which he drove change on Wall Street, launched a multibillion-dollar investment management firm and gave back to his community.

The company he co-founded, Smith Graham & Company Investment Advisors, opened in 1990 and grew into one of the largest Black-owned asset management firms in the country with nearly $7 billion in primarily fixed-income investments from institutional clients. The firm sold its bond portfolios to Loop Capital two years ago. However, Smith has firmly built a legacy in his hometown of Houston, his alma mater of Texas Southern University and as a former board member with the Dallas Fed, the New York Life Insurance Company and the Charles Schwab Family of Funds — among many other companies and organizations. 

"I always felt that Houston, for me, would be a fertile place to start a business, primarily because I had access to some of the most important people here in the city in the CEO suite and also within city government," Smith told Black Enterprise magazine in a 2017 interview. "Having those relationships, I thought, would assist me in being able to open doors and to leverage those relationships that would be beneficial in the long run."

Smith started in finance in the mid-1970s in the Houston office of investment banking firm Hibbard, O'Conner & Weeks. He relocated in 1979 to New York, where Dillon, Read & Company hired him to its fixed-income unit as the company's first-ever African American employee. A year later, Smith was a founding member of the New York Futures Exchange. 

After tenures with Westcap Corporation and Underwood Neuhaus & Company, Smith and Ladell Graham opened Smith Graham in Houston. Within 10 years, the company became the largest African American-owned asset management firm focused on fixed income and "the only black firm with a substantial reach overseas," author Gregory S. Bell wrote in the 2001 book, "In the Black: A History of African Americans on Wall Street."

In a 2020 interview with the Houston Hispanic Chamber of Commerce, Smith credited his grandmother with teaching him about business as the owner of a soda fountain and his mother with inspiring him by catching the bus every morning at 5 a.m. to go to her job at a pharmacy. 

After deciding to switch careers away from a retail executive job with his first employer, Foley's, he struggled to find employment in finance. Then he came up with the idea for a business plan to manage investments on behalf of Black-owned companies that he read about in the pages of Black Enterprise.

"You have to understand, this was a different time. This was 1975, OK? There were no people of color, no women who were really in investment banking. … I started sending out my résumé and I, luckily, got interviews. But, once they found out I was a person of color, it kind of changed a little bit and really no one would give me an opportunity," Smith said. 

"I told them, 'Here's a business plan. There's about a billion dollars in assets that I'm sure you knew nothing about, your firm knew nothing about.' I said I could be that person to go out and help these firms and manage their money, and I said to him, 'I think the only reason why you won't hire me quite honestly is because I'm Black. But, if it's something else where it makes sense to me that you don't think I can make it, if you give me a valid reason, you never have to hear from me again.' I knew they were tired of me knocking on the door. One thing is I was very persistent. But I said to him, 'If I'm right, if the only reason why you won't hire me is because I'm Black, I expect you to give me the opportunity. And he said, 'OK, you're hired.' And that's how I got in the door."

The Texas Business Hall of Fame inducted Smith in 2021. He and his wife created the Gerald and Anita Smith Endowed Scholarship at Texas Southern, which also awarded him an honorary doctorate in 2012 and later hosted the Gerald B. Smith Center for Entrepreneurship and Innovation. Smith has also served on the boards of the Museum of Fine Arts – Houston and the Houston Metropolitan Transit Authority. Investopedia named him last year among a group of legendary Black investors that included Robert Smith of Vista Equity Partners and John Rogers and Mellody Hobson of Ariel Investments.

Read the other stories in this series: 

• Legendary role models whose achievements laid the foundation
• How LeCount Davis, history's first Black CFP, is still giving back
• June Middleton made history on Wall Street, then left the industry
• Maggie Lena Walker triumphed in the Jim Crow era
• Stanley O'Neal's rise to top of Merrill was against all odds