T. Rowe Price Group plans to promote three executives to take on the responsibilities of chairman and president George A. Roche, who announced Thursday that he would retire in the fourth quarter.
The $269.5 billion Baltimore fund company said in a press release that it plans to elevate James A.C. Kennedy, its director of equities, to president and chief executive officer and Brian C. Rogers, its chief investment officer, to chairman of the board when Mr. Roche retires. The company’s board also plans to elect Edward C. Bernhard, the president of T. Rowe Price Investment Services, vice chairman.
Mr. Kennedy and Mr. Bernhard will handle day-to-day operations and Mr. Rogers will assume Mr. Roche’s responsibilities as chairman of the board, a spokesman said.
Mr. Kennedy, whose CEO post is newly created, said in an interview that Mr. Roche’s retirement will complete a leadership transition that began when he and Mr. Bernhard were added to T. Rowe Price’s management group in May 2000. In 2003, M. David Testa, a vice chairman, retired and Mr. Rogers was added to the management group.
Matt Snowling, a Friedman, Billings, Ramsey Group Inc. analyst who covers T. Rowe Price, said that by having three executives share Mr. Roche’s responsibilities the company will be returning to its roots of a more collaborative management structure. Mr. Testa, Mr. Roche, and James S. Riepe, a vice chairman who retired at the end of last year, led the company together for the past 15 years.
“There is a downside to this because it can be hard to govern by consensus,” Mr. Snowling said. “But T. Rowe has proven that it has the right culture for this to be successful.”
Mr. Roche, 64, has worked for T. Rowe Price since 1968. He has served on the board of directors since 1980 and was chief financial officer from 1984 through 1997. He became chairman and president in 1997, and since then its assets under management have grown from $100 billion to $269.5 billion as of Dec. 31.
Mr. Kennedy, 52, has been with T. Rowe Price since 1978. Mr. Rogers, 50, joined the firm in 1982, and was named chief investment officer in 2004. Mr. Bernard, 50, joined the firm in 1988. He has been nominated to succeed Mr. Riepe as a director of all the T. Rowe Price mutual funds when Mr. Riepe’s terms expire next month.
T. Rowe Price had inflows of $12.4 billion in 2005, while other large competitors like Janus and Putnam Investments suffered outflows of $12.3 billion and $20.95 billion respectively, according to data from Financial Research Corp., a Boston firm that tracks the fund industry.
Mr. Kennedy said the management transition is in no way timed to the market. “We grew up as long-term investors and we think long-term there here,” he said. “That is how I was trained and that is how Brian Rogers was trained and that is how we will operate this company.” He said it is unlikely the firm will look to make any major acquisitions or make any major strategic changes because of its new leadership.
“Growth for the sake of growth doesn’t appeal to us,” he said. “We have to protect our investors.”
He added, “Our growth from here will be a function of the market; we’ll grow with the market.”
