The top job at money management firms isn't just for investment professionals anymore - finance and marketing executives have a shot at it.
While former portfolio managers or analysts still dominate the ranks, other executives with business management skills are gaining ground.
Among some recent appointments to top spots:
Denis McCarthy was named chairman, president and CEO of Fidelity Management Trust Co., Boston. He was chief financial officer of FMR Corp., Fidelity's holding company.
Gary Thomas, finance director of Kleinwort Benson in London, was appointed CEO of Kleinwort Benson Investment Management Americas, New York.
Frank P.L. Minard, who was recently appointed to head Bankers Trust Co.'s U.S. operations, was the marketing chief at Mitchell Hutchins Asset Management, New York, in 1993 when he was tapped as chairman of the firm, his last post before Bankers Trust.
Francis D. Antin, director of marketing at State Street Bank and Trust Co., Boston, became vice chairman and chief operating officer of Boston Co. Asset Management Inc.
Penny Zuckerwise, chief operating officer of Chancellor Capital Management, New York, was named president.
The size and shape of the organization play a role in the selection of top management, said Edward Oppedisano, chairman and CEO of Oppedisano & Co. Inc., executive recruiters in New York.
Among the large multiproduct fund complexes, the senior people being promoted to top management are clearly coming from the distribution side. But at institutional money management firms with $10 billion or less under management, he said, the top person still usually comes up the ranks from the investment side.
Who gets the top spot is also a function of the variety of products firms are offering, said Richard S. Lannamann, managing director in charge of investment management at Russell Reynolds Associates, New York.
Firms are offering an increasing array of products that require a variety of disciplines, said Mr. Lannamann. In that environment, no one investment professional will be an expert in all of the products, so it becomes less important to have an investment professional at the helm, he said.
The top person won't necessarily be the best money manager, but rather the leader who can set priorities for the group, said Peter Kindler, partner in the executive recruiting firm Kenny, Kindler, Hunt & Howe, New York.
As organizations grow, the top management gets pulled further away from investment issues, he said. And, because of the increased complexity in the industry, large companies' top staff often will include persons strong in such disciplines as information systems, marketing and product development.
Following the maxim that a firm's assets go down in the elevator at the end of the day, the recruiters note the ability to manage the investment staffers and delegate to them is key.
"The people running the company need to know how to run people running money and need to be sophisticated about marketing and broad business issues," said Mr. Lannamann.
Recruiters point out that a person who is merely a good business manager - without investment savvy - can't expect to run a money management firm successfully.
"There's still an awful lot of art involved not only in finding the products and investment methodologies that work, but (also) managing a group of artists - be they investment managers or sales people - requires a bit different approach than you find in a typical corporation," said Mr. Kindler.
Operations professionals - specialists in the systems, finance and other internal functions that are becoming increasingly critical to managing the business - are also rising in importance.
The ideal CEO candidate today is more likely "the well-trained, well-grounded investment person who's had to think about marketing, who's had to work with clients, has thought about the broad business issues and has proven himself as a solid manager of people," said Mr. Lannamann.
For example, Mr. Kindler noted Stephen Canter has an investment background, but he had been working mainly in administration as chairman of Kleinwort Benson before being named vice chairman of Dreyfus Corp. last year.
"The majority of investment organizations are still led by former investors, and I think that will continue for the foreseeable future," said Mr. Lannamann. "They are often seen as the people more credible to investment professionals and more knowledgeable about investment products."
Conversely, Mr. Lannamann noted the professional with the marketing background also needs to do some work on the investment side.
"People with marketing backgrounds have to prove that they're highly knowledgeable about investing before they have the credibility to run serious teams of investment professionals," he said. "Good investment people want to work for other smart investment people."
Still, sales and marketing executives have a better shot than ever at becoming chief executive of their money management firm.
The increasing importance of distribution channels and asset gathering, both of which require more marketing attention, is behind the subtle shift, recruiters say. Skill at managing a business, rather than a portfolio, are critical in this period of consolidation and shrinking margins.
"Distribution people have certainly come a long way in the last 10 years," said Mr. Oppedisano.