Principal Global Investors, the asset management subsidiary of insurance and financial services giant Principal Financial Group, offers a range of equity, fixed income and real estate investments, in addition to specialized advisory services. Its roots go back to 1879 to the founding of Bankers Life, the predecessor of the Principal Financial Group. The company took on its first retirement plan client in 1941 and its assets under management reached $1 billion by 1960. By 1985, assets hit $10 billion, and by 1995, they reached $50 billion. The company’s goal is to reach almost half a trillion dollars in assets by 2012.
Principal Global Investors manages the assets of 11 of the 25 largest pension funds in the United States, and more than two-thirds of its assets under management represent pension funds. The firm’s fee mandate has also increased 20 percent in the fourth quarter of 2007, compared with the same quarter in 2006 and 44 percent for the entire year, reflecting strong growth in third-party assets under management. It now employs 1,147 people, including 418 investment professionals.
Going for growth
In September 2007, Principal Global Investors announced an objective of reaching $500 billion in assets under management within five years. The firm said it plans to ramp up its headcount by 25 percent in the same period. The announcement follows rapid growth. Principal Global Investors had just $8 billion in third-party assets at the end of 2001 when it decided to pour resources into building its asset management unit so it could handle more than just assets from its parent firm. On June 30, 2009, the firm remained about halfway to its goal, with $200.8 billion in assets under management that focus on retirement plans and institutional clients.
Expanding through acquisition
In May 2007, Principal Global Investors purchased Portland, Ore.-based Morley Financial Services from Nationwide Mutual Insurance Company for $75 million. Morley Financial Services, through its wholly owned subsidiary Morley Capital Management, manages more than $14 billion in institutional stable value assets. Morley continues under the management of Jill Cuniff, its managing director and chief investment officer for the past several years.
The buy was one of many acquisitions that Principal Global Investors has made since 2001. Others have included Spectrum Asset Management, Post Advisory Group and Columbus Circle Investors. Principal has allowed these firms to keep their name and culture while providing financial and back office guidance and support. Those acquisitions have tripled the assets under management at Principal Global investors.
801 Grand Avenue
Des Moines, IA 50392-0490
Phone: (800) 533-1390
Employer Type: Private
CEO: James P. McCaughan
2008 Employees (All Locations): 1,147