Philadelphia stock-and-bond firm Swarthmore Group started by lawyer James Nevels in 1991 is scheduled to close on Thursday, according to staffers and sources.
An anonymous employee told The Philadelphia Inquirer that the situation was “Very frustrating. (We were) only given two weeks’ notice.” This person was not authorized to talk about the impending shutdown.
The firm consists of about 10 staffers and as of March managed $1.5 billion. That includes nearly $400 million in stocks for clients like the City of Philadelphia and other governments, corporations, and charities.
In addition, city spokesperson Kevin Lessard explained that Swarthmore Group managed $122 million in Philadelphia’s airport debt-payment account up until last week. The money was sent to another firm after Swarthmore informed them “the city that they were closing” effective June 30, Lessard said.
Nevels graduated from the University of Pennsylvania’s Wharton and law schools. He started out as a bond lawyer at Buchanan Ingersoll in 1978, before serving as a municipal bond analyst for Wall Street firms, then starting Swarthmore.
President George H.W. Bush selected Nevels to the federal Pension Benefit Guaranty Corp., which he chaired from 2005 to 2007. In the past, Nevels was also a chairman of Hershey Co., the federal pension finance agency, the Federal Reserve Bank of Philadelphia and the former state-controlled school boards in Chester-Upland and Philadelphia.
SEC reports revealed that the value of stocks Swarthmore managed for its clients had been on the decline since 2015, from more than $1 billion to about $400 million. The firm altered fees from 0.25% of the bonds it bought for clients to 1% of the value of clients’ stocks, with discounts for clients who invested more than $5 million.
Some of the firm’s former clients include SERS, the state pension system and Chester, Bucks and Montgomery Counties.