T. Rowe Price CEO：AUM达1.9万亿美元

I do want to start off with that responsibility that comes with managing that money. You hit $1.9 trillion, a big milestone a few months ago. Talk to me a little bit about that what that actually meant within these walls.

Yeah. Um it's a significant responsibility that we're deeply focused on. I would also point out that 2/3 of that $1.9 trillion is retirement related in some way. I feel that retirement is a first order objective certainly for most individuals and many institutions around the globe. And I really think that we're incredibly well positioned to deliver great outcomes for retirement savers and retirees.

When you think about what your job is and more importantly what your job is for your clients, how much does that mesh with the original sort of idea and ethos that Thomas Rowe Price Jr. had when he founded this company 90 years ago?

Yeah, the the the founders vision was if you took care of your clients, they'll take care of you. And I still think that's very central to our culture and to our value proposition. I think we're very client-centric organization and deeply focused on delivering great investment outcomes for those clients. But I think the foundation of all of it is our integrated global investment platform. Right? The deep expertise that we bring across asset classes, across geographic markets that ultimately allows us to deliver again those those really compelling investment outcomes for our clients.

The stronger that engine is, the the stronger we are as an organization.

I'm always surprised at your career. I mean, you've you've been here for for 29, 30 years. You started as an analyst, worked your way up. What When you got tapped on the shoulder where you were going to be elevated to president, then CEO, and then ultimately chairman. Were you surprised?

Uh in some ways. I I certainly didn't have the classic backdrop or or experience set to be the CEO of an enterprise the scope of of T. Rowe Price in the sense that I'd really only been on the management committee and the leadership team at that point for a little over 4 years. But if you take a step back, I started my career as a research analyst following financial services. So I had the opportunity to cover

Yeah.

[snorts]

uh many of our counterparties, our clients, our competitors as a research analyst. Uh I spent the bulk of my career building a large cap growth franchise. So had the opportunity to really uh master the craft of investing, but also get a sense for the commercial aspect. Uh finals presentations, uh fees, positioning and performance updates. Uh you know, got a sense for what was really important to the clients that we serve in terms of consistency of philosophy and process.

And uh you know, kind of ultimately delivering those great returns. So I mean, it did give me a real sense for the essence of what we do. Uh I was ready for a a new challenge. And um you know, kind of had the opportunity to run our global equity business, then ultimately run all of investments as our group chief investment officer. So I'm I'm not sure that I was surprised, but certainly very flattered by the opportunity.

Well, I mean, well, you have to be because you also came in at a big inflection point, not just for T. Rowe, but really for the investment industry overall. And I am curious if you can talk a bit a little bit about what your vision for growth and getting T. Rowe Price back on sort of a track for organic revenue growth. I mean, you have an AUM that's obviously hitting record. You have gross inflows, but there's still a lot of concerns about net inflows and the transition from the mutual fund side of the business to all of these other elements, whether it's active ETFs, SMAs, private assets, etc.

Yeah, I'd say record gross inflows and and record AUM, but you know, we have faced some headwinds that are consistent throughout the industry in terms of outflows from active equity within actively within funds in the US in the equity asset class. Passive now has about 64% market share and it's picking up two to three percent. Some of that I really think has to do with the complexion of the market over a relatively long period of time now where the largest market cap companies have persistently delivered the the the best performance.

Um some of it also has to do with the open-ended mutual fund as a vehicle where we've been very very successful in the past and remain deeply committed, but it's become less central to many of our clients. So in response, uh we're really leaning in to ETF, uh SMA on the retirement side, trusts, so other vehicles. Uh we're growing in fixed income. We've had you know several years of very consistent growth in fixed income.

Our performance in fixed income strong. Uh and we have a very powerful retirement date franchise that has been a growth engine for us. We're the largest provider of active and blend target date funds. Uh and I think that positions us well going forward. We're also pushing into alternatives, Romaine. Um we acquired OHA right before I became CEO at the end of 2021. They're an alternative credit provider. They do uh stressed, distressed, structured, private, and multi-strat credit.

Um we uh have developed internally a late-stage venture capability that we're meeting significant success with. And we announced a partnership for uh public-private offerings for the wealth and retirement market with Goldman Sachs uh not quite a year ago. So we've got I I think we've got very significant opportunity to to to grow and to overcome eventually the headwind from active equity and from mutual funds.

And we'll talk about that bridge you from that from that Oak Hill acquisition in 2021. I mean, you were responsible for the Goldman partnership and a lot of people were like, "Okay, that's interesting." And I think you're finally going to have an interval fund uh just launched out of that here. But, give me a sense as to why partner rather than maybe try to go out and find someone to buy or maybe even build it yourself.

Well, we we're open to building things organically like we've done with that late-stage venture capability. We're open to acquisition like we did with OHA and we're open to partnering. In the instance of the Goldman Sachs partnership, we think they're a compelling partner in the sense that many of their strengths are complementary with ours. And they brought some capabilities that we didn't have in certain parts of private market alternatives that would allow us to bring these products to market relatively quickly.

I think the industry landscape is evolving pretty rapidly and speed to market was part of the decision with regard to partnering relative to building internally or organically or acquiring, both of which would take significantly more time.

Well, give me a sense here when we talk about Okay, so the interval fund came out pretty quickly. Give me a sense, are we going to start to see private assets actually in a target date fund in a in a T-row target date fund sometime

We are operationally

ready.

Yeah. To launch a trust that incorporates uh private market assets at certain points along the glide path. Uh we're seeing some client interest. Uh I think at the outset, it will be a subsegment of the market. There'll be a part of the market that's enthusiastic about incorporating the diversification and the elevated returns that you should be able to get by trading liquidity for return and incorporating those private market alternatives.

But, I think there are significant segments of the market that will want to watch and see ultimately how this plays out. Where there be a maybe be a greater focus on on fees and where there will be a little bit more hesitancy. So I do I do see adoption of private market alternatives in defined contribution plans. I think it will be a relatively slow evolution at the outset confined to a certain sub segment of the market.

What do you think speeds