Playing to Our Strengths

Key to achieving our goals is our connected and collaborative investment culture. Ehret describes regular interactions across geographies and asset classes – for example, equity managers frequently attend fixed income team meetings, and vice versa, to leverage their market insights. These touchpoints around the globe from our offices across the Americas, the Middle East, Europe, and Asia-Pacific (where half of our assets are managed for Asia-based clients) form a communication infrastructure that differentiates us from larger players in the industry.

This sense of cohesion among the investment teams stems from having ridden the highs and lows of the previous market cycle together. PineBridge emerged from insurance giant AIG in the wake of the financial crisis, and the transition from AIG to PineBridge fortified the teams’ dedication to each other – and to helping clients thrive.

“Even though each of our investment teams has its own culture, everyone understands that we work better when we are open, transparent, and collaborative,” Ehret says. To further reinforce this dynamic, the firm recently moved its headquarters in New York City to a state-of-the-art open-plan space to deepen collaboration both within teams and across the organization.

The cohesion also comes from staff retention. Our senior investment professionals have an average tenure with the firm of 11 years.¹ And a culture of entrepreneurial spirit – the ability to get things done –generates a high level of satisfaction among employees. “It’s gratifying to see your hard work come to fruition and be recognized among your colleagues. This comes through in the feedback from the employee engagement surveys we conduct each year,” says Ehret.

Our broad employee base has consistently expressed strong satisfaction with their jobs, our values, our focus as a company, and our efforts to build a diverse and inclusive company culture. “Yet we recognize that there’s always room to do more, and we encourage our employees to invest in their own individual and their overall team development,” Ehret says.

“Consider large-cap equities. You have to be careful how you play in that space,” Ehret says. “You have to provide real differentiation, you can’t look like the index, you must be focused, you must have deeper portfolio holdings, and you must be more than benchmark-aware. If you can’t do it that way, then you shouldn’t do it at all.” That’s why we avoid US large cap as an overall strategy outside of our quantitative equity business. This group differentiates itself by using an active and systematic approach through a combination of quantitative modeling and a proprietary company lifecycle framework that values holdings according to where a company is within its lifecycle.

Differentiation also means a strong focus on our strengths, and a consequence of this strategic focus is that we’re positioned to avoid what Ehret sees as two areas impacting the asset management landscape. “One is US retail investing, where ETFs are taking market share at a rapid rate,” he says. “The second is US corporate defined benefit plans, which are quickly accelerating toward liability-driven investing (LDI) and away from the dwindling growth assets. Within the LDI space, a small percentage of assets are set aside for growth, and that’s a market where we can focus our efforts.”

Given the challenges that rapid technological changes bring, from a firm-wide strategy perspective we are active in asset classes and areas that are less susceptible to disintermediation through passive investing and technological change. “We’re not interested in running right into the passive territory of our competitors. We have conviction that our active approach can add the most value for our clients,” Ehret says.

At PineBridge, we believe that incorporating ESG principles in investing isn’t a zero-sum game. Ehret explains that this “is becoming more of a focus, not just because of our clients and their needs, but because there has been a shift among investors at large. People increasingly believe business models that improve their sustainability create value not only for society, but for investors in those businesses. This is why we take an analytical approach that considers how companies are seeking to improve upon ESG issues.”

But the effort goes beyond that. Says Ehret: “As active managers, we’re able to advocate for – and hasten – change in the select companies we invest in. This can generate meaningful results for our clients – both in investment returns and risk mitigation – over the medium to long term.”

We’re also a signatory to the UN Principles for Responsible Investment (UNPRI). Over 1,700 signatories are required to disclose their responsible investment process to the PRI each year through a detailed reporting framework. This report is reviewed and assigned a rating – ours is A+, a distinction achieved by less than 25% of our peers.⁷

Ehret notes that our investment teams have a long-standing focus on sustainability as part of their investment processes. “Whether they’re in equities or fixed income, our people are committed to strengthening and refining our approach to responsible investing.”

Sustainability also includes a focus on diversity, inclusion, our environment, and how we engage with our communities. “Just like our clients and prospects, we care about the diversity of our management teams and our workforce. Our goal is to value and leverage the unique backgrounds, talents, and perspectives that all our people bring to work. We believe diversity, in all its dimensions, is core to delivering the best outcomes for our clients,” said Ehret.

By being both an asset manager and an employer, we’re providing financial security to many different people. “We never lose sight of that,” Ehret says, “so delivering results for clients is the central part of our purpose.”