Rob Sharps, who took over from Bill Stromberg as T. Rowe Price’s CEO at the end of 2021, is stepping into the role after what he called an unexpectedly tumultuous year, with the markets being affected by factors like the omicron variant of COVID-19, inflation and less accommodative monetary policy.
Sharps expects these challenges to continue into 2022, his first year as the company’s leader. At the same time, he is excited for the opportunity to watch a number of T. Rowe Price initiatives take shape under his leadership.
These include the integration of the newly acquired Oak Hill Advisors, L.P., an alternative credit firm. The companies closed the deal in late December after announcing the $4.2 billion acquisition, the largest in 20 years for T. Rowe, in October. The firm is also planning to launch T. Rowe Price Investment Management, or TRPIM, which will be a separate U.S.-based SEC-registered investment adviser, in March of this year.
Sharps also said he is excited to return to meeting with the company’s clients and employees in person. Although employees are currently working remotely, as a result of the highly transmissible omicron variant of the coronavirus, U.S.-based team members are expected to begin returning to the office as soon as late February.
Meanwhile, some associates overseas are beginning to return to the office, including the team in London, who will be returning within the next week and whom Sharps plans to soon visit.
“I’m very much looking forward to spending some time with that team for the first time since 2019 in person,” he said.
Unlike some employers, T. Rowe has not implemented an across-the-board vaccine mandate for its employees. However, the company is requiring all new hires to be vaccinated and is also requiring client-facing staff to be vaccinated, due to many of its clients having vaccine mandates in place for visitors.
Luckily, Sharps said, the omicron surge has not disrupted the progress of T. Rowe Price’s future headquarters, to be located in Harbor Point. Associates are still planned to begin working out of the facility in the second half of 2024, and a groundbreaking is scheduled for some time this quarter.
Despite the year’s challenges, T. Rowe had a strong 2021, ending the year with $1.69 trillion in assets under management, up 14.8% from last year. The company earned $1.96 billion in net revenues for the quarter and $7.67 billion for the year, both improvements over 2020’s numbers.
T. Rowe’s diluted earnings per common share were $3.18 in the fourth quarter of 2021, surpassing the Zacks Consensus Estimate of $3.07 per share.
The company struggled with short-term flows and performance in certain U.S. equity strategies, reporting that over a one-year period, the percentage of its U.S. equity funds that outperformed the Morningstar median was 38%, a dip from 65% in 2020. However, its performance over five- and 10-year periods remained strong.
Sharps attributed this trend to the narrow concentration of returns this year and emphasized that it is natural for strategies to experience occasional “down cycles.”
“You always have periods of time where your performance is not where you want it to be,” he said. “Ultimately, the talent that we have and the capability that we have will shine through. I’m very confident in our team in this area.”
Editor’s note: A previous version of this story incorrectly reported that T. Rowe Price earned $1.96 trillion in net revenues for the quarter and $7.67 trillion in net revenues for the year; the company actually earned $1.96 billion and $7.67 billion, respectively.