Many well-intentioned changes. As new leadership makes its mark on Principal Asset Management, the firm retains an Average Parent rating.
Following roughly five years as Principal’s COO, Kamal Bhatia rose to CEO in 2024. Under his leadership over the past couple of years, Principal’s focus has shifted from growth by acquisition to consolidating in-house investment capabilities. It folded its numerous investment boutiques into a central investment platform divided by asset class. In 2023, George Maris and Michael Goosay joined to lead the centralized equity and fixed-income divisions, respectively. While organizational change can create undesired turnover, Principal structures portfolio-manager deferred compensation to support retention as well as alignment with fundholders.
Roughly one fifth of Principal’s USD 553 billion in assets under management (as of June 2024) is in its retirement offerings. The relative stability of this client base, together with the asset manager’s ownership by Principal Financial Group, gives the firm license to try new things. For instance, the firm recently launched a handful of direct lending strategies and promoted Todd Everett to lead the private assets division. While these efforts could bring benefits to Principal’s clients, more evidence is needed to determine their effectiveness.
Note: This share class' Parent Pillar rating is analyst-driven, as its Branding Name, Principal (Branding Name ID: BN000009RO), is covered by Morningstar Manager Research.
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