Where Do Asset Management Ceos Come From?
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WHERE DO ASSET MANAGEMENT CEOs COME FROM? KEY FINDINGS FROM AN ANALYSIS OF CEO CAREER DYNAMICS METHODOLOGY This study presents key findings from an analysis of the profiles and career paths of CEOs in the asset management industry Our analysis included 96 CEOs across 46 large firms and 46 boutique asset management firms. Summary of key findings CEOs of large asset management firms: Of the 48 CEOs profiled1, 37 (77%) have been appointed since 2006. Spikes in CEO appointments occurred in North America during the financial crisis and in 2012 in Europe, possibly due to profits failing to recover to pre-financial crisis levels. Approximately 29% were externally appointed, roughly in line with other industries. While buy-side experience is prevalent among these CEOs, over half have never held an investment role in their career. There are differences in profiles between CEOs of independent, bank-linked and insurance- linked firms. Bank-linked CEOs often come from buy-side and other non-asset management- related parts of financial services. In contrast, CEOs at both independent and insurance-linked firms tend to come from within the asset management industry, most commonly serving as the CEO with a smaller firm prior to assuming their current role. Only one in five CEOs have international experience, which is notably lower than in other parts of financial services. For comparison, in insurance three in five CEOs have international experience. CEOs of boutique asset management firms: While the CEOs of boutique firms on multi-manager platforms are primarily promoted internally (similar to large firms), the majority of CEOs of independent asset managers are founders. Investment roles are the most commonly-held positions immediately prior to being appointed CEO. Furthermore, the vast majority of CEOs have held investment roles at some point in their careers. This is a reflection of many boutiques still being run by founders who are often investment professionals. Unlike CEOs of large asset management firms, CEOs of both multi-boutique and independent boutique firms tend to have ongoing, direct involvement in the investment process after being appointed to the CEO role. Recent shifts in CEO profiles: Approximately a quarter of appointments have taken place since 2012. Our analysis reveals three shifts in the profiles of recently-appointed CEOs: 1. Recently-appointed internal candidates: All recently-appointed CEOs of boutiques were promoted from within, as were four in five CEOs of large firms. This is likely a reflection of the need for candidates to know both the product, investor base, as well as being familiar with firm-specific challenges. 2. Sales experience, at the expense of investment experience: This trend is especially visible for boutique firms. It is likely a reflection of the need to have a more client-centered strategy and of investment professionals wanting to remain hands-on portfolio managers, which can become challenging if that person is also to successfully fulfil their CEO responsibilities. 3. Rising emphasis on international experience: This shift only applies to large firms, which already tend to be global or multi-regional institutions. 1. Where applicable, we profiled co-CEOs 2 CEOs OF LARGE ASSET MANAGEMENT FIRMS There are significant differences in CEO profiles across different types of asset management firms AN OVERVIEW OF THE LARGE ASSET MANAGEMENT FIRMS INCLUDED IN OUR ANALYSIS Aberdeen Edinburgh 5 The Hague London 2Frankfurt Toronto Zurich Boston Paris Beverly Chicago Malvern Newark San Francisco Des Moines San Baltimore Mateo Los Angeles New York Newport Beach Atlanta 30 16 NORTH AMERIca EUROPE Company Category Location Company Category Location BNY Mellon Investment Management Bank-Linked New York, NY, USA Deutsche Asset & Wealth Management Bank-Linked Frankfurt, Germany Goldman Sachs Asset Management Bank-Linked New York, NY, USA HSBC Global Asset Management Bank-Linked London, UK JP Morgan Asset Management Bank-Linked New York, NY, USA BNP Paribas Investment Partners Bank-Linked Paris, France Lazard Asset Management Bank-Linked New York, NY, USA Natixis Global Asset Management Bank-Linked Paris, France Morgan Stanley Investment Bank-Linked New York, NY, USA Credit Suisse Asset Management Bank-Linked Zurich, Switzerland Management UBS Global Asset Management Bank-Linked Zurich, Switzerland Wells Fargo Asset Management Bank-Linked San Francisco, CA, USA Standard Life Investments Insurance-Linked Edinburgh, UK Ameriprise Financial Insurance-Linked Boston, MA, USA Allianz Global Investors Insurance-Linked Frankfurt, Germany MFS Investment Management Insurance-Linked Boston, MA, USA (Part of Allianz Asset Management) Old Mutual Asset Management Insurance-Linked Boston, MA, USA Aegon Asset Management Insurance-Linked The Hague, Putnam Investments Insurance-Linked Boston, MA, USA Netherlands Principal Global Investors Insurance-Linked Des Moines, IA, USA Aviva Investors Insurance-Linked London, UK PIMCO Insurance-Linked Newport Beach, CA, USA Prudential plc Insurance-Linked London, UK (Part of Allianz Asset Management) AXA Investment Management Insurance-Linked Paris, France MetLife Investment Management Insurance-Linked New York, NY, USA Aberdeen Asset Management Independent Aberdeen, UK Prudential Investment Management Insurance-Linked Newark, NJ, USA Legal & General Investment Management Independent London, UK Manulife Asset Management Insurance-Linked Toronto, ON, Canada Schroders Independent London, UK Invesco Independent Atlanta, GA, USA Amundi Independent Paris, France Legg Mason Independent Baltimore, MD, USA T.Rowe Price Independent Baltimore, MD, USA Affiliated Managers Group Independent Beverly, MA, USA Eaton Vance Management Independent Boston, MA, USA Fidelity Investments Independent Boston, MA, USA State Street Global Advisors Independent Boston, MA, USA Wellington Management Company Independent Boston, MA, USA Northern Trust Asset Management Independent Chicago, IL, USA TCW Group Independent Los Angeles, CA, USA The Vanguard Group Independent Malvern, PA, USA For bank- and insurance-linked asset managers, the CEO was defined BlackRock Independent New York, NY, USA as the member of the management team with responsibility for the Neuberger Berman Independent New York, NY, USA asset management business. TIAA-CREF Asset Management Independent New York, NY, USA For asset management firms that are subsidiaries of larger financial Franklin Templeton Investments Independent San Mateo, CA, USA institutions, company category was determined based on the parent company’s largest business line by revenue. Note: The co-heads of Credit Suisse Private Banking & Wealth Management, Goldman Sachs Asset Management and Allianz Asset Management were profiled 4 ROUTE TO THE TOP FOR CEOs AT LARGE ASSET MANAGEMENT FIRMS YEAR OF APPOINTMENT FOR CURRENT INTERNAL VS. EXTERNAL CEOs APPOINTMENTS A notable share of current CEOs at North American The majority of group CEOs are internally appointed, firms were appointed in the midst of financial crisis. A with few founders at the top. Women represent 8% of similarly notable share of CEOs at European firms were current CEOs. appointed in 2012. In total, 37 of 48 (77%) have been appointed since 2006. Founder No female CEO turnover at North 4% founders American firms spiked during CEO turnover at European the financial crisis firms rose as profits failed to recover to pre-financial 6 crisis levels 5 Internally appointed 4 4 67% 3 females internally appointed = 9% of all internal appointments. Externally 2 2 2 2 appointed 1 female externally 1 appointed = 7% of all 29% external appointments. 1 1 1 1 1 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD ROLE PRIOR TO APPOINTMENT TO CEO Immediately prior to being appointed to their current roles, roughly half of the CEOs in our analysis either held senior investment positions or served as the CEO of a smaller asset management firm. 28% 21% 18% 13% 10% 10% CEO of Asset Investment Senior role COO of Sales Others Management within Financial Asset Management Firm1 Institution2 Firm3 1. Includes regional subsidiaries of global asset managers 2. Financial Institution includes banks, insurance companies and private banks 3. COO of Asset Management Firm includes the titles COO, Deputy CEO, Vice Chairman and Head of Global Strategy 5 CORE EXPERIENCES OF CEOs OF LARGE ASSET MANAGEMENT FIRMS PRIOR BUY-SIDE AND SELL-SIDE EXPERIENCE BUY-SIDE Sell-siDE BOTH NeiTHER The vast majority CEOs without of CEOs have buy- buy- or sell-side side experience. experience come Nearly half from a variety of have sell-side backgrounds, experience. And including law, fully 40% have strategy consulting, both buy- and sell- private banking, side experience. corporate banking, 81% 46% 40% 19% and retail banking. A CLOSER LOOK AT THE NATURE OF BUY-SIDE EXPERIENCE PRIOR TO APPOINTMENT AS CEO While a clear majority of CEOs have buy-side experience, less than half have investment experience. Investment & Other No Prior Buy- Buy-Side Side Experience Functions1 19% 23% OF ALL GROUP CEOs 54% HAVE NOT HELD AN INVESTMENT ROLE IN THEIR CAREER Non-Investment Buy-Side Buy-Side Investment Only Experience Only 23% 35% GENDER DIVERSITY While gender diversity is a concern, asset management has more women at the top than many other industries. For comparison: 8% of global asset management CEOs are female, compared with 6% for global banks and 2% for insurance companies 8% 6% 2% All women were 45 50 40 92% appointed after 2008 8% Global Asset Global Global Insurance