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.

www.russellreynolds.com

© Copyright January 2015, Russell Reynolds Associates. All rights reserved

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