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Charles Schwab Investment Management
Jonathan de St. Pael, president of Charles Schwab Investment Management
- Charles Schwab Investment Management's assets under management jumped 84% to $362 billion in just eight years under chief executive officer Marie Chandoha.
- As the CEO prepares to retire, her successor, Jonathan de St. Paer, explains how the firm continues to scale differently than its peers.
- Rather than offer "hundreds and hundreds" of products, as some of Schwab's competitors do, de St. Paer said the firm is focused on offering a core suite of investments.
Charles Schwab Investment Management has seen a few years of rapid growth, tacking on $165 billion of assets in eight years - 84% growth.
"We used to describe ourselves as the largest asset manager that a lot of people haven't heard of," Jonathan de St. Paer, the San Francisco-based firm's president, said in a recent interview with Business Insider.
The firm hit $362 billion in assets as of August 31, with growth stemming from a focus on high-quality, low-cost products in categories that scale, de St. Paer said.
"When you hear us say we're not trying to be all things to all people, we're really proud of that," he said, noting the division has, in some cases, only 5-10% as many products as its competitors. For example, the firm offers 22 exchange-traded funds and 85 mutual funds, while BlackRock lists 345 ETFs and 599 mutual funds.
"We see others with hundreds and hundreds of products," de St. Paer said. "Focus and transparency is something we're trying to help investors with."
In March, de St. Paer will take over as chief executive officer from retiring CEO Marie Chandhoa. She turned the business around after the firm lost $1.1 billion in a bond fund that tanked and drew fines from regulators after the financial crisis.
Now, despite the pending change in leadership, it's business as usual with a continued focus on simplicity, de St. Paer said.
"I'm not looking to make big, major changes," he said. "I've been involved in this strategy for quite a long time."
Like JPMorgan Asset Management, CSIM reorganized some of its fund lineup this year, combining some of its mutual funds and separately-managed accounts and ensuring that its products are priced competitively.
Success in 2019 and beyond looks like "continued growth," particularly through deepening client relationships that leads to CSIM managing more of a client's portfolio.
Going forward, de St. Paer said he is focused on maintaining the company's culture - its "secret sauce" - and on positioning the firm for consistent performance regardless of market conditions.
"We recognize that the next 10 years are probably not going to look like the last 10 years," he said.