LO Sentiment Check
For the folks who work at the big Long Onlys - what’s managements tone like these days? Was looking at some of the outflows / performance out of some of the publics (T Rowe, Franklin) and the numbers are uuuugly. Are they talking about cutting costs yet? Are heads going to roll?
what #s are you referencing?
They are public companies, you can look it up in their filings. T Rowe for example, $25B of net outflows in Q3 alone. Can also see how their flagship funds are doing on Morningstar, or you can take more word for it - not too hot
Anyone work at one of these? What’s the mood like?
Why has TRP in particular done so badly? $150b outflows since 2017. I haven't seen another major asset manager with such bad outflows
Work at a publicly traded large long only. Definitely cost pressure amidst outflows. Announced recent 5% staff reduction.
Work at a large (not publicly traded) LO AM. Performance has obviously not been great but haven't heard much in the way of layoffs. Bonus is expected to be smaller than in 2021 but comparable to 2020. C-suite's been vocal about desire to grow FI side of business over EQ since we're already so dominant in EQ. (probably also because there's more secular tailwinds here).
There's definitely pressure, but I would say it's tolerable. I work at a large public LO as well and internally it honestly hasn't been fun.
There has been cost cutting in some areas (i.e. cutting back on Market Data Services, spending less on associate functions, etc.) but not others (i.e. no laying off of staff, no cutting back on travel, etc.). I think there's worry companywide but not enough to cause people to quit or seek other work. Many people at the company remember 2008 and we survived that pretty well, so I have to think it can't be too much worse than that.
Edit: Also OP::Associate 3 in PE - LBOs , what causes you to bring the question up? There's a wave of consolidation taking place in the Asset Management sub-industry currently and wonder how you think the current market and the answers to the questions I've given you may affect that wave?
Simple
Those >+0% YTD to -10% = super year, living as if it is Tiger Global 2020 again, even hiring good analysts from failed funds, inflows as "window of opportunity in the markets" "we handle the crisis"
Those down -15 to -35 = keep going, cutting research exp as possible, maintaining key costs, avoiding hiring, "long-term it's fine"
Those down -40 or more = people incrementally leaving, not hiring at all, stress as lot of time spking to clients, insecurity, "does our strategy makes sense" "will quality stocks really outperform in the next 10y"
Work at a boutique LO. With mkts (and thus assets) down 20-30% depending on cap and style there are many funds, including ours, that are worried about being sub-scale and are looking to cut costs wherever they can. Expectations are low for bonuses this year but no staff has been laid off
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