Financial Economics Institute
Trust Company of the West and The Capital Group Companies Visit
March 4, 2005
Fifteen students from the Financial Economics Institute at Claremont McKenna College traveled to downtown Los Angeles on March 4 to meet with executives at Trust Company of the West and The Capital Group Companies, two asset management firms headquartered in Los Angeles. In the morning, the students met with senior-level managers at TCW, of which CMC Trustee Robert A. Day '65 is CEO and chairman.
Coordinated by Stephen Burlingame '99, a Managing Director at TCW and a member of the FEI's Board of Advisors, the morning meeting was an opportunity for students to learn from portfolio managers, and also from the chief operating officer of the company, says Brian Dennis, FEI assistant director and associate director of CMC's Robert A. Day 4 + 1 BA/MBA Program.
The managers at TCW emphasized it was a results-oriented, meritocratic company. A portfolio manager has a few years to prove himself—depending on the results he could either be fired, or put in charge of millions of dollars of investments.
Mr. Burlingame told the group that successful portfolio managers need to be different from the market in some way, and must have creativity. At the same time they must ask a lot of questions and be willing to admit when they're wrong. He emphasized the importance of probabilistic reasoning, learned through statistics and econometrics courses. "Mr. Burlingame was very candid with us regarding what it takes to work in asset management, and in particular TCW," said Justin Hance, a junior who went on the trip.
Following a lunch hosted by Burlingame, students then drove to the headquarters of The Capital Group Companies for an overview of the firm and to learn about specific job opportunities. Students also heard from Todd Wagner '88, vice president of Capital Group's international assets division, who offered an alumnus perspective.
The Capital Group's representatives emphasized the firm's unique approach to investing as well as hiring. The company has a multiple manager system, with a group of managers controlling a particular portfolio. Their decisions are filtered through the Portfolio Control Group, which ensures the transactions meet the client's needs. In its hiring, Capital Group emphasizes their low turnover and long-term commitment to their employees. They seek skills such as knowledge of investments and legal experience, and prefer 1-2 years of prior experience. Another representative, however, said the skills they look for are mainly soft skills—adaptability, communication skills, and teamwork.
"The students benefited by having the opportunity to contrast two prominent asset management firms headquartered in Los Angeles, while receiving exposure to senior level managers and learning about potential career paths at each of the firms," Dennis said.