67 WALL STREET, New York - March 28, 2014 - The Wall Street Transcript has just published its Investment Banks and Asset Management Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Investing in Financial Services - Regulatory Outlook Gains Clarity - Asset Growth - Capital Flow Into Equities - Active Management - Alternative Asset Management
Companies include: Principal Financial Group Inc. (PFG) and many more.
In the following excerpt from the Investment Banks and Asset Management Report, the Chairman, President and CEO of Principal Financial Group, Inc. (PFG) discusses company strategy and the outlook for this vital industry:
TWST: In the fourth quarter, 63% of your earnings were from fee-based business, and that's the direction you're moving in. Can you talk a little bit about your effort to move in that direction?
Mr. Zimpleman: One of the lesser-known facts is that the principal has been on offense and has done these seven deals with $2.2 billion in capital. I think the other perhaps lesser-known feature is that we fairly dramatically reshaped the businesses, not necessarily because of the financial crisis, because this reshaping actually started in 2007. If you look at our 2013 operating earnings, which is the best measure of financial performance, we had basically $1.06 billion in earnings. That was a record, just surpassing the prior record, which was like $1.058 billion in 2007.
But here comes the point to your question about fee-based. In the period of time from 2007 to date, we've replaced about $150 million of spread-based and risk-based earnings with fee-based earnings, making up 63% of earnings being fee-based. In 2007, we had only about 45% of the earnings being fee-based. So we've made a fairly dramatic transition over that period of time, and we plan to continue that transition with higher percentages of earnings coming from fee-based business.
TWST: What are the regulatory issues on the horizon that could create either opportunities or obstacles for you?
Mr. Zimpleman: The largest regulatory issue for us - and it's...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.