T Rowe Price Group Inc updates
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T Rowe Price is changing chief executive, with Rob Sharps promoted to replace the retiring Bill Stromberg at the helm of a $1.6tn asset manager that has consistently delivered strong returns for clients.
A 35-year veteran of the company, Stromberg told the Financial Times that retirement was a “bittersweet moment” and after a multiyear succession planning process, this was a “good time for a transition”.
Analysts have long viewed T Rowe as a disciplined asset manager with a long-term focus that has steadily grown its business while generating good returns.
“They have been a very well-run company for decades across multiple CEOs. Historically, they have grown the executive ranks from within, and today’s announcement is consistent with that philosophy,” said Kyle Sanders, senior equity research analyst at Edward Jones.
Rob Sharps, currently chief investment officer, has been with T Rowe for 24 years. He said his priorities included maintaining solid investment performance for clients, expanding the asset manager’s digital presence and launching new products in exchange traded funds and using environmental, social and governance metrics.
Sharps said the asset manager would expand globally including in China. “There is a large opportunity in China and there are unique risks and challenges,” he said. “As a global asset manager we need to navigate the ebb and flow of policy decisions and our approach to China has been long term.”
The shift in leadership coincides with the launch of T Rowe Price Investment Management by the second quarter of 2022. The new entity is designed to alleviate capacity constraints. A number of T Rowe funds are closed to new investors or have reached limits in terms of owning shares in specific companies.
In other management changes, Céline Dufétel, the current chief operating officer and chief financial officer is stepping down from her roles, to assume a leadership position with a fintech company. Jen Dardis, currently head of finance, will become CFO and treasurer and join the management committee.
The reshuffle came after the Baltimore-based asset manager recorded solid earnings during the second quarter boosted by investor inflows and buoyant financial markets. Assets under management rose one-third over the past year to $1.6tn, reflecting “favourable market tailwinds”, said Stromberg.
Net revenues of $1.9bn rose 36 per cent over the past 12 months. Net income applicable to the company rose more than 35 per cent to $816m, or $3.46 per share, beating estimates.
Sharps acknowledged that asset managers face a testing period after a surge in client inflows, with elevated market valuations likely to be challenged by less monetary policy support and a deceleration in the economy’s rebound.