Where Do Asset MAnAgeMent Ceos
CoMe FroM?
Key FinDings FroM An AnAlysis oF Ceo CAreer DynAMiCs
2
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
Ceos oF lArge Asset MAnAgeMent FirMsThere are significant differences in CEO profiles across different types of asset management firms
4
An overvieW oF the lArge Asset MAnAgeMent FirMs inCluDeD in our AnAlysis
Aberdeen
Edinburgh
Frankfurt
ZurichParis
London
Los Angeles
San FranciscoSanMateo
Des Moines
Chicago
Atlanta
Toronto
Baltimore
Newark
New York
Malvern
BostonBeverly
The Hague
25
NewportBeach
30north AMeriCA
16europe
Company Category LocationBNY Mellon Investment Management Bank-Linked New York, NY, USA
Goldman Sachs Asset Management Bank-Linked New York, NY, USA
JP Morgan Asset Management Bank-Linked New York, NY, USA
Lazard Asset Management Bank-Linked New York, NY, USA
Morgan Stanley Investment Management
Bank-Linked New York, NY, USA
Wells Fargo Asset Management Bank-Linked San Francisco, CA, USA
Ameriprise Financial Insurance-Linked Boston, MA, USA
MFS Investment Management Insurance-Linked Boston, MA, USA
Old Mutual Asset Management Insurance-Linked Boston, MA, USA
Putnam Investments Insurance-Linked Boston, MA, USA
Principal Global Investors Insurance-Linked Des Moines, IA, USA
PIMCO (Part of Allianz Asset Management)
Insurance-Linked Newport Beach, CA, USA
MetLife Investment Management Insurance-Linked New York, NY, USA
Prudential Investment Management Insurance-Linked Newark, NJ, USA
Manulife Asset Management Insurance-Linked Toronto, ON, Canada
Invesco Independent Atlanta, GA, USA
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
BlackRock Independent New York, NY, USA
Neuberger Berman Independent New York, NY, USA
TIAA-CREF Asset Management Independent New York, NY, USA
Franklin Templeton Investments Independent San Mateo, CA, USA
Company Category LocationDeutsche Asset & Wealth Management Bank-Linked Frankfurt, Germany
HSBC Global Asset Management Bank-Linked London, UK
BNP Paribas Investment Partners Bank-Linked Paris, France
Natixis Global Asset Management Bank-Linked Paris, France
Credit Suisse Asset Management Bank-Linked Zurich, Switzerland
UBS Global Asset Management Bank-Linked Zurich, Switzerland
Standard Life Investments Insurance-Linked Edinburgh, UK
Allianz Global Investors (Part of Allianz Asset Management)
Insurance-Linked Frankfurt, Germany
Aegon Asset Management Insurance-Linked The Hague, Netherlands
Aviva Investors Insurance-Linked London, UK
Prudential plc Insurance-Linked London, UK
AXA Investment Management Insurance-Linked Paris, France
Aberdeen Asset Management Independent Aberdeen, UK
Legal & General Investment Management Independent London, UK
Schroders Independent London, UK
Amundi Independent Paris, France
Note: The co-heads of Credit Suisse Private Banking & Wealth Management, Goldman Sachs Asset Management and Allianz Asset Management were profiled
For bank- and insurance-linked asset managers, the CEO was defined as the member of the management team with responsibility for the asset management business.
For asset management firms that are subsidiaries of larger financial institutions, company category was determined based on the parent company’s largest business line by revenue.
5
route to the top For Ceos At lArge Asset MAnAgeMent FirMs
internAl vs. externAl AppointMents
The majority of group CEOs are internally appointed, with few founders at the top. Women represent 8% of current CEOs.
yeAr oF AppointMent For Current CeosA notable share of current CEOs at North American firms were appointed in the midst of financial crisis. A similarly notable share of CEOs at European firms were appointed in 2012.
role prior to AppointMent to CeoImmediately 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.
2006 2007 2008 2009 2010 2011 2012 2013 2014YTD
12
0
6
0
2
1
2
1 1
5
4
1
2
4
1
CEO turnover at North American firms spiked during
the financial crisis CEO turnover at European firms rose as profits failed to recover to pre-financial
crisis levels
In total, 37 of 48 (77%) have been appointed since 2006.
Senior role within Financial
Institution2
Sales
28%
Investment
21%18%
13%10%
COO ofAsset Management
Firm3
10%
OthersCEO of AssetManagement
Firm1
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
Internally appointed
67%
Externally appointed
29%
4%Founder No female
founders
3 females internally appointed = 9% of all internal appointments.
1 female externally appointed = 7% of all external appointments.
6
Core experienCes oF Ceos oF lArge Asset MAnAgeMent FirMs
prior buy-siDe AnD sell-siDe experienCe
The vast majority of CEOs have buy-side experience. Nearly half have sell-side experience. And fully 40% have both buy- and sell-side experience.
CEOs without buy- or sell-side experience come from a variety of backgrounds, including law, strategy consulting, private banking, corporate banking, and retail banking.
A Closer looK At the nAture oF buy-siDe experienCe prior to AppointMent As Ceo
Of ALL GrOup CEOs hAvE nOt hELd An InvEStmEnt rOLE In thEIr CArEEr
54%
While a clear majority of CEOs have buy-side experience, less than half have investment experience.
genDer DiversityWhile gender diversity is a concern, asset management has more women at the top than many other industries.
92%Men
8%WoMen
1. Includes functions such as sales, operations, finance and product development
Buy-SIdE SELL-SIdE
All women were appointed after 2008
No Prior Buy-Side Experience
Non-Investment Buy-Side
Experience Only
Investment & Other Buy-Side
Functions1
Buy-Side Investment Only
23%19%
35%23%
46% 40% 19%81%
BOth nEIthEr
For comparison: 8% of global asset management CEOs are female, compared with 6% for global banks and 2% for insurance companies
45Global Asset
Management Firms
40Global Insurance
Companies
50GlobalBanks
8%6%
2%
7
Ceo “route to the top” by FirM type
internAl vs. externAl AppointMentsBank-linked firms tend to appoint their CEOs internally, while insurance-linked tend to appoint their CEOs externally.
IndEpEndEnt
26%63%11%Internal ExternalFounder
BAnk-LInkEd
14%86%0%Internal ExternalFounder
InSurAnCE-LInkEd
47%53%0%Internal ExternalFounder
prior buy-siDe AnD sell-siDe experienCePrior sell-side experience is dominant for CEOs in bank-linked asset managers. In insurance-linked companies, almost all CEOs have buy-side experience.
32%
84%
Buy-side Sell-side Buy-side Sell-side
71%64%
Buy-side Sell-side
40%
93%BAnk-LInkEd InSurAnCE-LInkEdIndEpEndEnt
nAture oF buy-siDe experienCe beFore AppointMent to CeoOver half of CEOs at independent and insurance-linked asset managers have held prior investment roles; by contrast, roughly a third of bank-linked firm CEOs have previously held investment roles.
IndEpEndEnt BAnk-LInkEd InSurAnCE-LInkEd
No Buy-Side Experience No Buy-Side
Experience
No Buy-Side Experience
Non-Investment Buy-Side
Experience Only
Non- Investment Buy-Side
Experience Only
Non-Investment Buy-Side
Experience Only
Investment & Other Buy-Side
Functions1
Investment & Other Buy-Side
Functions1Investment & Other
Buy-Side Functions1
Buy-Side Investment Only
37% 7%20%16% 35%
7%
37%
40%
29%11%
Buy-Side Investment Only
29%
Buy-Side Investment Only
33%
1. Includes functions such as sales, operations, finance and product development
8
Ceo “route to the top” by FirM type
role helD prior to AppointMent to CeoIndependent and insurance-linked firms tend to appoint CEOs with recent asset management leadership or investment experience. Bank-linked firms, on the other hand, look more broadly within the financial services talent pools.
INSURANCE-LINKED
BANK-LINKED
CEO of AssetManagement
Firm1
CEO of AssetManagement
Firm1
CEO of AssetManagement
Firm1
Sell-SideInvestment Sales
14% 14%14%
30%
14%7% 7%
Investment
CEO of a Financial
Institution2
33% 33%
20%
CEO of a Financial
Institution2
7% 7%
Consulting
INDEPENDENT
LawyerSell-SideSales
21%
11%16%
37%
5% 5% 5%
Investment
COO ofAsset
ManagementFirm3
COO ofAsset
ManagementFirm3
OperationsFunction
within FinancialInstitution2
OperationsFunction
within FinancialInstitution2
COO ofAsset
ManagementFirm3
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
9
internAtionAl experienCe
pErCEntAGE Of CEOs wIth SAmE nAtIOnALIty AS COmpAny hQ
ExAmpLES Of fIrmS wIth CEOs whOSE nAtIOnALIty IS dIffErEnt frOm thEIr COmpAny’S hQ
Sarah RussellAustralian
Sridhar ChandrasekharanIndian
Andrea RossiItalian
Michele FaissolaItalian
Mark ZinkulaAmerican
Elizabeth CorleyBritish
internAtionAl experienCe
nAtionAlity
work experience in Europe and north America
Stephen Potter
James McCaughan
work experience in north America, Europe and Asia
Douglas Hodge
work experience in Europe and Asia
Sridhar Chandrasekharan
Sarah Russell
work experience in north America and Asia
Kai Sotorp
Peter Bain
work experience in north America, Europe and middle East
Andrea Rossi (Europe and Middle East)
Robert Leary (USA and Middle East)
19%
thE mAjOrIty Of CEOs wIth muLtI-rEGIOn ExpErIEnCE GAInEd It thrOuGh IntErnAL pOStInGS.
56%
100%
North AmericanFirms
EuropeanFirms
While all North America-based firms have CEOs who are from the region, the picture in Europe is more varied: 7 out of 16 Europe-based asset management firms have a CEO whose nationality is different from the company’s HQ.
Only 19% of CEOs have worked in more than one country.
Ceos oF boutique Asset MAnAgeMent FirMs Scale matters, as the profiles of CEOs at boutique firms differ significantly from those of large firms
11
An overvieW oF the boutique Asset MAnAgeMent FirMs inCluDeD in our AnAlysis
Edinburgh
Paris
London
Los Angeles
San Francisco
Chicago
Baltimore
Arlington
New York
Boston
1332 1
Teaneck1Rye1
1
24Milwaukee
Philadelphia
11
1Pasadena
San Diego1Overland Park1
9Geneva
Stavanger
33north AMeriCA
13europe
Company Category LocationSands Capital Independent Arlington, VA, USA
DoubleLine Capital Independent Los Angeles, CA, USA
Hotchkis & Wiley Independent Los Angeles, CA, USA
Artisan Partners Independent Milwaukee, WI, USA
Baron Capital Management Independent New York, NY, USA
Cohen & Steers Independent New York, NY, USA
Fred Alger Management Independent New York, NY, USA
Pzena Investment Management Independent New York, NY, USA
Waddell & Reed Financial, Inc Independent Overland Park, KS, USA
GAMCO Investors Independent Rye, NY, USA
Brandes Investment Partners Independent San Diego, CA, USA
Investment Counselors of Maryland Multi Boutique Baltimore, MD, USA
Babson Capital Multi Boutique Boston, MA, USA
Boston Company Multi Boutique Boston, MA, USA
Copper Rock Capital Partners Multi Boutique Boston, MA, USA
Loomis, Sayles & Co. Multi Boutique Boston, MA, USA
Harris Associates Multi Boutique Chicago, IL, USA
Nuveen Asset Management Multi Boutique Chicago, IL, USA
AllianceBernstein Multi Boutique New York, NY, USA
ClearBridge Investments Multi Boutique New York, NY, USA
Cutwater Asset Management Multi Boutique New York, NY, USA
Dreyfus Multi Boutique New York, NY, USA
Epoch Investment Partners Multi Boutique New York, NY, USA
Jennison Associates Multi Boutique New York, NY, USA
Oppenheimer Multi Boutique New York, NY, USA
Third Avenue Management LLC Multi Boutique New York, NY, USA
TimesSquare Capital Management, LLC Multi Boutique New York, NY, USA
Western Asset Management Multi Boutique Pasadena, CA, USA
Delaware Investments Multi Boutique Philadelphia, PA, USA
Highmark Capital Management Multi Boutique San Francisco, CA, USA
Mellon Capital Multi Boutique San Francisco, CA, USA
Wells Capital Management Multi Boutique San Francisco, CA, USA
Systematic Financial Management Multi Boutique Teaneck, NJ, USA
Company Category LocationEdinburgh Partners Independent Edinburgh, UK
Unigestion Independent Geneva, Switzerland
Colchester Global Investors Independent London, UK
Jupiter Fund Management Independent London, UK
Majedie Independent London, UK
Carmignac Independent Paris, France
Skagen Funds Independent Stavanger, Norway
Alcentra Multi Boutique London, UK
Baring Asset Management Multi Boutique London, UK
ECM Asset Management Multi Boutique London, UK
Insight Investment Multi Boutique London, UK
Newton Multi Boutique London, UK
Threadneedle Multi Boutique London, UK
12
Ceo “route to the top” by FirM type
role prior to AppointMent to Ceo
internAl vs. externAl AppointMents
Investment Sales
Sell-Side
60%
32%
4% 4%
CEO of AssetManagement Firm1
CEO of Financial Institution4
MULTI-BOUTIQUE SUBSIDIARY CEOs
Investment
75%
10%5% 5%5%
INDEPENDENT BOUTIQUE CEOs
COO of Asset Management Firm3
COO of Asset Management Firm3
Investment Sales
28% 21% 18% 13% 10% 10%
Others
LARGE FIRM CEOs
CEO of AssetManagement Firm1
COO of AssetManagement Firm3
Senior role within aFinancial Institution2
Senior role within aFinancial Institution2
While CEOs of large firms and boutiques on multi-manager platforms are more likely to be appointed internally, the majority of the CEOs for independent boutique asset management firms are founders.
Investment and COO roles are the most commonly-held positions prior to being appointed to CEO at boutique asset management firms.
3. COO of Asset Management Firm includes the titles COO, Deputy CEO, Vice Chairman and Head of Global Strategy4. Financial Institution includes banks, insurance companies and private banks
LARGEFIRM CEOs
MULTI-BOUTIQUESUBSIDIARY CEOs
INDEPENDENTBOUTIQUE CEOs
INTERNAL
EXTERNAL
67%10%
FOUNDER 4% 4%
35%
55%
89%
7%29%
1. Includes regional subsidiaries of global asset managers2. Includes functions such as sales, operations, finance and product development
13
Core experienCes oF Ceos, by FirM type
Unlike CEOs of large firms, CEOs of both multi-boutique and independent boutique firms tend to have continued direct involvement in the investment process.
shAre oF Ceos With DireCt, on-going involveMent in the investMent proCess
muLtI-BOutIQuE SuBSIdIAry CEOs
muLtI-BOutIQuE SuBSIdIAry CEOs
IndEpEndEnt BOutIQuE CEOs
IndEpEndEnt BOutIQuE CEOs
LArGE fIrm CEOs
1. Looks across the entire sample
CEOs of boutique asset management firms are much more likely to have investment experience when compared with CEOs of large firms – almost 85% of independent boutique CEOs have an investment background.
FunCtionAl experienCe beFore AppointMent to Ceo
LArGE fIrm CEOs
39% 60%0%
54% 21% 10%No Buy-Side Investment Experience
Buy-Side Investment Only 23% 58% 85%
23% 21% 5%Investment & Other Buy-Side Functions1
reCent shiFts in Ceo proFilesRecently-appointed CEOs are more likely to have been promoted internally, more likely to have sales experience, and less likely to have investment experience; at large firms, recently-appointed CEOs are also more likely to have international experience
15
three reCent shiFts in Ceo proFiles ACross All FirM types
1. Includes profiles of 41 CEOs where information was available
BOUTIQUES1
CEOs appointed before 2012 CEOs appointed since 2012
15% 33%LARGEFIRMS
SALES EXPERIENCE
0% 50%
18 p.p.
50 p.p.
BOUTIQUES1
CEOs appointed before 2012 CEOs appointed since 2012
12%
33%LARGEFIRMS
INTERNATIONAL EXPERIENCE
12%0%-12 p.p.
21 p.p.
BOUTIQUES1
CEOs appointed before 2012 CEOs appointed since 2012
55% 27%LARGEFIRMS
INVESTMENT EXPERIENCE
94% 50%
-28 p.p.
-44 p.p.
BOUTIQUES1
CEOs appointed before 2012 CEOs appointed since 2012
LARGEFIRMS
INTERNAL VS EXTERNAL APPOINTMENTS
19 p.p.
48 p.p.
Internal61%
Internal52%
Internal80%
Internal100%
1. groWing eMphAsis on internAl CAnDiDAtes
2. groWing eMphAsis on sAles At the expense oF investMent experienCe
3. groWing eMphAsis on internAtionAl experienCe, but For lArge FirMs only
Russell Reynolds Associates is a global leader in assessment, recruitment and succession planning for chief executive officers, boards of directors and key roles within the C-suite. With 350 consultants in 44 offices around the world, we work closely with both public and private organizations across all industries and regions. We help our clients build boards and executive teams that can meet the challenges and opportunities presented by the digital, economic, environmental and political trends that are reshaping the global business environment.
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