Wellington’s next CEO sees active management regain its influence

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(Bloomberg) — Jean Hynes knows the value of perseverance.

Hired after her university studies by Wellington Management in Boston as an administrative assistant, she rose through the ranks of research and portfolio management for three decades. In June, she takes over as CEO when Brendan Swords leaves the private company, whose roots date back to 1928.

The Boston-area native and daughter of Irish blue-collar immigrants will be the first woman to lead Wellington, which manages more than $1 trillion. She joins a growing list of female CEOs overseeing some of the world’s top fund managers, a group that includes fellow Bostonian Abby Johnson at Fidelity Investments.

Hynes, 52, faces a challenge as investors across the industry have been fleeing stock and bond pickers for cheaper index funds for years. Wellington is best known for serving institutional clients and sub-advising active mutual funds for companies such as Vanguard Group. It also has a growing $32 billion business in alternative assets, including private equity.

Hynes understands the task ahead. Wellington’s relationship with her biggest client, indexing giant Vanguard, dates back to the 1970s. She is the lead portfolio manager of the $49 billion Vanguard Health Care Fund, which has seen net outflows for the fifth consecutive year in 2020, according to data compiled by Bloomberg.

In excerpts from a Bloomberg interview, Hynes discusses active management, private equity, and the lessons she can offer other women on Wall Street.

As outflows from active equity funds increase, why are you confident Wellington can thrive amid secular change?

It goes back to our true north, our belief in investment excellence. If we can deliver alpha consistently over a long cycle to our clients, we believe we will gain market share even if active management loses share. Second, with bond yields where they are, alpha will play an increasingly important role in how well clients achieve their investment goals. Active has a place – perhaps an even bigger place – in the future. We have all the ingredients to deliver this alpha.

Wellington has just raised its third late-stage private equity fund. Will alternatives become more important as markets evolve?

Five or six years ago we launched our first private fund, which was a late-stage growth fund. And we have just raised the third vintage of this fund. It’s very exciting for us. When you think of the number of companies that stay private longer than they would have gone public, it’s just very close to what we do on the public side. We also launched our first vintage of our biomedical fund two years ago. Both of these strategies have been successful, so I expect that we will continue to invest in this area, where we have the talent.

You graduated with a degree in economics from Wellesley College. Why did you accept an administrative assistant position?

I interviewed for two jobs, one with a better title, then Wellington, which was an administrative job. But I knew that when I arrived, I would also be doing research associate work. In the end, it was the people – I really liked the people I was going to work with. And there was a recruiter, I often say I wish I could go back and find her. She was very persuasive and said, “This company is special. You are going to have many avenues of growth. So I just took the risk that she was right and it turned out to be true.

What lessons can you share as you rise through the ranks as a wife and mother of four girls?

When I had my first child in 1998, I remember going to my manager, telling him I was going to have a baby. He supported me a lot and told me: ‘You can continue on your path or if you want, you can take another path.’ I also remember the CEO at the time coming up to me and saying, ‘You’re 24/7 in your head’, which as an investor you’re 24 24/7 in your head, but that doesn’t mean you have to be in the office. Wellington gave me enormous flexibility. My husband and I developed a program that worked. I was super early and left at 4pm for a decade. But nothing stays the same. Wellington allowed me to adapt to changes. From a personal philosophy, there were a few things that were important. To be at dinner. My daughters were my truth tellers. After becoming a managing partner, I thought everything was fine until I asked them how things were going and they said, “You’re not enough at dinner.

You have decided to remain a portfolio manager even as you become CEO. How to balance the two roles?

I have to be very organized and deliberate. I’ve mapped out how I’m going to dedicate time to the business as well as my healthcare research. We named a president for the first time, Steve Klar. I will be very focused on the investment platform. He will focus on our customers and our infrastructure platform. When you think of Wellington, we do one thing: we manage clients’ money. And so the fact that I remain an active investor will allow me to stay close to that, the nexus of what we do. Very close to talent. And as I grow as an investor, how can I help other investors grow? It will help me to stay close to the initiatives, how we are going to develop the talents.

To contact the editors responsible for this story:
Sam Mamudi at [email protected]
Josh Friedman, Peter Eichenbaum

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