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Lawrence Lever
Founder and executive chairman, Citywire
Asset management CEOs tend to be a polished bunch. They are well-trained when talking to the media and rarely show signs of the stress that must come with running multi-billion (or even trillion) dollar businesses. So, when a group of these executives gets together and uses words like ‘killer’, ‘failure’ and ‘hate’, something unusual is going on.
It could be that they have gathered for an oddly specific group therapy session. Or (spoiler alert: this is the real reason) they might have come together for Citywire’s World of Asset Management CEO Summit; a unique event that invites some of the most influential names in the investment industry to discuss pressing issues of the day. As the vocabulary used above suggests, it is also an event that elicits a level of candour unseen by these leaders in most public settings. When everyone else on the call does the same job as you, there’s little room for spin or sidestepping.
This year’s CEO Summit was our biggest yet. It brought together 21 executives from asset managers across the US, the UK and Europe who oversee a combined $21tn (£15tn). The Summit was held over three sessions in January, with each one attended by seven CEOs. The sessions were chaired by Lawrence Lever, Citywire’s founder and executive chairman, Angus Foote, director of European editorial, and Alex Steger, editor of Citywire USA.
The strong words mentioned earlier were spoken during a debate on mergers and acquisitions. The CEOs were equally frank when discussing efforts to improve workforce diversity, the need to do ESG well, the growth of private assets, the future of mutual funds and the importance of China.
Lawrence, Angus and Alex share their views on the most important points to come out of the Summit on a podcast, tune in directly from the top right corner.
Watch the films of the sessions and read our published articles below:
Session 1
Scroll down
CEO clips
Click the images to watch each CEO’s videos
Session 2
Session 3
Back to top
Robert Higginbotham
Head of global distribution,
T. Rowe Price
Jean Raby
CEO, Natixis Investment Managers
Anne Richards
CEO, Fidelity International
Frédéric Janbon
CEO, BNP Paribas
Asset Management
Douglas Sieg
Managing partner,
Lord Abbett
Andrew Telfer
Joint senior partner,
Baillie Gifford
Mark Versey
CEO, Aviva Investors
Nils Bolmstrand
CEO, Nordea Asset Management
J. Christopher Donahue
Chairman, Federated
Hermes, Inc
Hamish Forsyth
President, Europe and Asia, Capital Group
Mike Freno
Chairman, CEO & President, Barings
Yie-Hsin Hung
CEO, New York Life
Investment Management
Daniel
Simkowitz
Head of investment management, Morgan Stanley
George Walker
Chairman & CEO,
Neuberger Berman
Hendrik du Toit
CEO, Ninety One
Marty Flanagan
President & CEO, Invesco
Andrew Formica
CEO, Jupiter Fund Management
David Hunt
President & CEO, PGIM
Rachel Lord
Head of Europe, Middle East & Africa, BlackRock
Jose Minaya
CEO, Nuveen
Peter Sanderson
Group CEO, GAM Investments
Articles
Asset managers should use the carrot-and-stick approach to encourage better corporate behaviour.
Clients will increasingly see through shortcuts, like selling polluters to achieve net-zero portfolios, and will want managers to improve firms.
Good data is essential for doing ESG
well but beware of an arms race
between managers.
ESG
Listen to the podcast
Talking
points
Across the three sessions, six key themes emerged.
Click on the boxes to see the main takeaways of each topic.
ESG
Private
markets
Diversity and
inclusion
Mergers and
acquisitions
Mass
customisation
China
01 /
02 /
03 /
Firms should coordinate more, particularly on external initiatives. Regulators need to step
up here too.
Asset managers don't believe being ESG-compliant makes them moral or political arbiters. They say their focus is on risk and reward based on data and science.
They will be expected to have a voice on certain issues but view this as a separate matter to how they act on behalf of clients.
04 /
05 /
06 /
Private markets
Asset managers are in regular conversations with regulators about making private markets more accessible to retail investors.
They argue that it is an issue of equality and that ordinary investors should not be left out.
They acknowledge that private equity fees will broadly come
down, but some popular outperforming firms will always command a premium.
01 /
02 /
03 /
One CEO said the tax treatment
of carried interest is unfair and should change.
It is hard but not impossible to combine private and public investing in one firm.
One CEO has changed private equity incentive packages to be based on income generation rather than capital gains.
04 /
05 /
06 /
Diversity and inclusion
Asset managers are collecting a broad range of diversity data on gender, race, ethnicity, sexual orientation and disability. This seems to be easier to do in the US than in other countries.
This data is needed for firms to measure improvement on workforce diversity and inclusion.
It should also be used to push for improvement at portfolio companies.
01 /
02 /
03 /
CEOs must ensure diversity does not tail off in more senior positions.
Male asset management CEOs are more attuned to diversity now than three years ago, but it is much too early to declare victory on the issue.
One of the women on our panel urged the male participants to get themselves replaced by women.
04 /
05 /
06 /
Mergers and acquisitions
Most deals do not work out, except for the seller, some CEOs said.
Mergers are much harder to make work when the two firms have significantly overlapping investment and distribution teams.
Putting two very similar groups together is a move that ends up being hated by clients, employees, and shareholders, one CEO said.
01 /
02 /
03 /
All deals result in short-term disruption and it can be hard to demonstrate their value initially.
There was more positivity on strategic deals, those that add specific functions or investments skill sets to a firm.
Some CEOs dismissed the idea of wholesale consolidation happening, arguing that the industry was naturally fragmented because it is people- and skills-based.
04 /
05 /
06 /
Mass customisation
Customisation of strategies will increase and is being driven by
new technologies.
Asset managers will be able to customise everything for clients above a certain size, who will not need to buy funds.
Separately managed accounts will thus be increasingly popular for these clients, who will get tailored tax management, factor exposures, and ESG tilts.
01 /
02 /
03 /
Customised sustainable strategies are tipped to be a big growth area.
Some CEOs argued that widespread customisation already exists, citing the fact that there are about four million indices.
While mutual funds have inefficiencies, do not write them
off yet as pooling is valuable to many clients.
04 /
05 /
06 /
China
If you want to be a global asset manager, you must get China right, the CEOs said.
There are challenges to doing so, not least the tense relationship between China and the US.
Managers going into China must think long term and commit a lot of resources.
01 /
02 /
03 /
To a degree, the Chinese government is inviting overseas asset managers to help manage money for locals.
04 /
The CEOs:
Session 1
Main page
Session 2
Watch video
‘Compared to three
years ago, the change is
just phenomenal’
Robert Higginbotham
Head of global distribution, T. Rowe Price
Frédéric Janbon
CEO, BNP Paribas Asset Management
Jean Raby
CEO, Natixis Investment Managers
Anne Richards
CEO, Fidelity International
Douglas Sieg
Managing partner, Lord Abbett
Andrew Telfer
Joint senior partner, Baillie Gifford
Mark Versey
CEO, Aviva Investors
‘We will need to prove we are adding value by reducing emissions’
‘As we decarbonise and electrify large parts of industry, these are great investment opportunities for us as asset owners’
‘The more we all change… the more our industry will be attractive to young graduates
of all kinds’
Session 1
Session 3
Watch video
The CEOs:
Nils Bolmstrand
CEO, Nordea Asset Management
Chris Donahue
President & CEO, Federated Hermes, Inc
Hamish Forsyth
President, Europe and Asia, Capital Group
Mike Freno
Chairman, CEO & President, Barings
Yie-Hsin Hung
CEO, New York Life Investment Management
Daniel Simkowitz
Head of Investment Management, Morgan Stanley
George Walker
Chairman & CEO, Neuberger Berman
Session 2
‘If you just look at the history, the average deal has not added value’
‘If you have a lot of overlap, the bar [for mergers] to excel is extraordinarily high’
‘We can achieve everything that everyone’s talking about here without trying to be the Pope’
‘We’re asking [employees] to self-identify if they’re a member of the LGBTQ+ community, disabled,
or a veteran’
Session 2
Articles
Watch video
The CEOs:
Hendrik du Toit
CEO, Ninety One
Marty Flanagan
President & CEO, Invesco
Andrew Formica
CEO, Jupiter Fund Management
David Hunt
President & CEO, PGIM
Rachel Lord
Head of Europe, the Middle East & Africa, BlackRock
Jose Minaya
CEO, Nuveen
Peter Sanderson
Group CEO, GAM Investments
Session 3
‘Next time some consultant comes [to me] and says, “the world is going to be dominated by five big managers”... I just throw them out immediately’
‘I’ve learned from all of the deals, and therefore I’d do things differently each time’
‘Just try harder and get yourself replaced with women’
‘If you’re not doing ESG well, you’re just not going to get the money’
Click on the boxes to read our published articles
Session 3
Main page
‘Most M&A deals are failures’
Firms seek LGBTQ data
Lad culture vs polite old men
Asset managers are not the Pope
‘I throw
them out immediately’
Enough ESG posturing
PE for the people!
Articles
Sessions
Main page
‘Most M&A deals are failures’
Firms seek LGBTQ data
Lad culture vs polite old men
Asset managers are not the Pope
Enough ESG posturing
PE for the people!
‘I throw
them out immediately’
Articles
Click on the boxes to read our published article
Articles
Main page
CEO clips
Click the images to watch each CEO’s videos
Robert Higginbotham
Head of global distribution,
T. Rowe Price
Frédéric Janbon
CEO, BNP Paribas
Asset Management
Anne Richards
CEO, Fidelity International
Jean Raby
CEO, Natixis Investment Managers
Douglas Sieg
Managing partner,
Lord Abbett
Andrew Telfer
Joint senior partner,
Baillie Gifford
Mark Versey
CEO, Aviva Investors
Nils Bolmstrand
CEO, Nordea Asset Management
J. Christopher Donahue
Chairman, Federated
Hermes, Inc
Hamish Forsyth
President, Europe and Asia, Capital Group
Mike Freno
Chairman, CEO & President, Barings
Yie-Hsin Hung
CEO, New York Life
Investment Management
Daniel
Simkowitz
Head of investment management, Morgan Stanley
George Walker
Chairman & CEO,
Neuberger Berman
Hendrik du Toit
CEO, Ninety One
Marty Flanagan
President & CEO, Invesco
Andrew Formica
CEO, Jupiter Fund Management
David Hunt
President & CEO, PGIM
Rachel Lord
Head of Europe, Middle East & Africa, BlackRock
Jose Minaya
CEO, Nuveen
Peter Sanderson
Group CEO, GAM Investments