In asset management, as in other endeavors, size really does matter.
Bigger is better. But growth in AUM drives growth in headcount and complexity; and that can overwhelm existing structures and challenge management.
Larry Fink figured it out at BlackRock and the company is adapting and thriving as it grows, up from eight people in 1988 to 12,000 employees and nearly $5 trillion in AUM today.
Mr. Fink hires top talent wherever he can find it, most recently Mark Wiseman, the CEO of Canada's CPP Investment Board (1,200 FTEs) to revitalize his active-equity business.
Bruce Karsh and his partners at Oaktree Capital, with headcount exceeding 900 employees, hired Jay Wintrob, a highly experienced corporate manager, as their first official CEO, leaving the partners free to focus on deal-making.
Ray Dalio, on the other hand, is an example of a founder struggling to manage the beast he created. Bridgewater Associates, born in Mr. Dalio's apartment in 1975, now tallies 1,200 employees and $150 billion AUM. But the transition to a more mature management structure hasn't been easy, and succession planning has been tumultuous.
CEO or CIO: What's in a name?
Two weeks ago in "Crunch Time for the Harvard Endowment" we referred to HMC's hunt for a new "CIO" although, technically, the top job at HMC is "CEO."
In this niche that's often a distinction without much difference, and we tend to use "CIO" generically; but for Harvard there's a real problem behind that equivocation.
A CEO, in proper corporate-speak, manages people, structure, and processes. A CIO, of course, develops and executes investment strategy to maximize returns.
The HMC board hopes to find a candidate who is both an outstanding investment strategist and a proven, effective manager - a CIO and a CEO.