T. Rowe Price CEO Rob Sharps Talks Private Assets and AI Adoption

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Romaine Bostick** (0:07)
Of course, the person that all of this rolls up to is Rob Sharps. He's been with the company for three decades, almost his entire career, and a third of the lifespan of T. Rowe itself, starting as an analyst and rising to become chairman and CEO of one of the pillars of the American retirement system. Let's face it, if you have a 401k in this country, there's a decent chance one of Rob's deputies has a hand in managing some of that money. Rob, great to have you here.

**Rob Sharps** (0:31)
Great to be here.

**Romaine Bostick** (0:32)
And 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 what that actually meant within these walls.

**Rob Sharps** (0:44)
Yeah, it's a significant responsibility that we're deeply focused on. I would also point out that two-thirds 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.

**Romaine Bostick** (1:13)
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?

**Rob Sharps** (1:27)
Yeah, 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 a 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.
The deep expertise that we bring across asset classes, across geographic markets, that ultimately allows us to deliver, again, those really compelling investment outcomes for our clients. The stronger that engine is, the stronger we are as an organization.

**Romaine Bostick** (2:16)
I'm always surprised at your career. You've been here for 29, 30 years. You started as an analyst, worked your way up. 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?

**Rob Sharps** (2:31)
In some ways.

**Romaine Bostick** (2:32)
Yeah.

**Rob Sharps** (2:33)
I certainly didn't have the classic backdrop or experience set to be the CEO of an enterprise, the scope of T. Rowe Price in the sense that I really only been on the management committee and the leadership team at that point for a little over four 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 many of our counter parties, our clients, our competitors as a research analyst. I spent the bulk of my career building a large cap growth franchise. So had the opportunity to really master the craft of investing but also get a sense for the commercial aspect, finals presentations, fees, positioning and performance updates. You got a sense for what was really important to the clients that we serve in terms of consistency of philosophy and process and ultimately delivering those great returns. So it did give me a real sense for the essence of what we do.
I was ready for a new challenge and I had the opportunity to run our global equity business then ultimately run all of investments as our group chief investment officer. So I'm not sure that I was surprised but certainly very flattered by the opportunity.

**Romaine Bostick** (4:03)
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'm curious if you can talk a little bit about what's your vision for growth and getting T. Rowe Price back on sort of a track for organic revenue growth. I mean, you have an AOM 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.

**Rob Sharps** (4:32)
Yeah, I'd say record gross inflows and record AOM. But we have faced some headwinds that are consistent throughout the industry in terms of outflows from active equity within funds in the US in the equity asset class. Passive now has about 64% market share and it's picking up 2 to 3%. 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 best performance.