Philadelphia-based money manager FIS Group has agreed to acquire Durham, N.C.-based Piedmont Investment Advisors LLC to form one of the largest African American-owned investment companies in the United States, with a combined $10 billion in assets.

FIS, a 27-employee firm founded by the city's onetime chief investment officer Tina Byles Williams, will continue to be based in Philadelphia while Piedmont, a 21-person firm that invests for the North Carolina state pension plan and other mostly government-run retirement clients, will keep its name and operate as a wholly owned subsidiary. Employees will keep their jobs, Byles Williams said through a spokeswoman.

Ariel Investment Partners, Chicago, with assets of $13.1 billion, is the largest African American money manager, according to Crain's business publications.

FIS sells "manager of manager" investment funds. As with Piedmont, most of its clients are governments, according to its annual SEC report. For example, FIS was hired in February by the $29 billion-asset Pennsylvania State Employees' Retirement System (SERS) to manage $200 million.

The recommendation was backed by State Sen. Vincent Hughes (D., Phila.) and a majority of fellow trustees, over an objection from state treasurer Joe Torsella, who would prefer to shift most state investments to lower-cost indexed funds such as those sold by Vanguard Group.

Money management can be lucrative. SEI Corp. of Oaks, Montgomery County, and Federated Investments, of Pittsburgh, both publicly traded companies that invest for pension plans and big institutions, each reported net after-tax profits totaling  26 percent of revenues last year. Hamilton Lane, a Philadelphia firm that advises pension funds and other institutions on investments, reported a profit margin of nearly 50 percent when it sold shares in a public offering on the Nasdaq Stock Exchange (corrected) last year.

But it's also an industry dominated by large, well-funded corporations, and remains hard for new firms to break into. While African American executives in recent years have served as chief executive officers at Merrill Lynch, American Express, TIAA-CREF, and other big financial firms, black and female elected officials, investment managers and their political allies have continued to press government agencies to direct public assets to qualified minority- and woman-owned firms to help them grow and integrate the field.

Both FIS and Piedmont are managed and owned by predominantly African American staff. FIS Group says it now manages about $5.6 billion "in innovative portfolio solutions across the global public equity spectrum through entrepreneurial managers worldwide." Piedmont says it expects to manage $4.7 billion in "active, passive, and structured beta equity and core fixed-income management" by June 30.

The Piedmont total used to be larger — $6.8 billion as of March 28 — according to the SEC. The North Carolina pension system, which accounted for nearly half of Piedmont's total assets as of last year, announced plans to "reallocate" some of that money to a new in-house indexed-investments program, Pensions & Investments Magazine reported in November.

Piedmont CEO and principal owner Isaac Green has known Byles Williams and FIS president McCullough Williams, a former Ohio state deputy auditor who later worked for the former Philadelphia-based African American-owned investment bank Pryor, McClendon, and Counts, "for decades," Green said in a statement. He said Piedmont employers are "excited to join forces" and expand sales and investment strategies.

The two firms have "similar investment beliefs" and "client-centric, entrepreneurial, and innovative cultures," said McCullough Williams, adding that together they will sell "a full complement of equity (active and passive), fixed income (active), U.S., non-U.S., and global strategies," with stronger "investment capabilities, talent, technology, and resources."

The merger makes FIS a "strong multi-asset management firm," said Byles Williams, who serves as both chief investment officer and chief executive officer, in a statement. The firm, which was founded in Philadelphia in 1996, says it finds "high-skill, high active-share entrepreneurial managers that have gone largely undiscovered by the institutional-investment community."

Tina Byles Williams founded FIS after serving as chief investment officer (when she was Tina Byles Poitevien) for the Philadelphia pension system and the Philadelphia Gas Works pension plan. She is also a former member of the Pennsylvania Public School Employees' Retirement System board (PSERS).

FIS, along with a larger Philadelphia firm, Public Financial Management, whose best-known salespeople include former Philadelphia Eagles star tight end John Spagnola, later served as a consultant to the Philadelphia pension system to find investment firms run by women, minorities, and disabled people, but the city pension board voted to terminate FIS and PFM in 2013 after a staff, board, and consultant review noted underperformance by money managers they hired.