Kristi Mitchem Takes Charge of Asset Management at Wells Fargo

Mitchem, who joined the bank from State Street Global Advisors, has pushed for gender diversity in corporate leadership.

Wells Fargo Asset Management has a new boss, who seems to have followed her own advice that women should rise to the top. On June 1, Kristi Mitchem took over as president and CEO of Wells Fargo & Co.’s $481 billion asset management arm in San Francisco, which includes the bank’s Wells Capital Management and its mutual fund business.

Mitchem succeeds Michael Niedermeyer, who retired in March after 28 years with the firm. She previously headed the Americas institutional client group at State Street Global Advisors, Boston-based State Street Corp.’s asset management division, where her other roles included leading the global defined contribution group and assisting with leadership development.

Mitchem has recently been pushing to get more women into senior corporate positions, arguing that gender diversity is a powerful differentiator for companies. This year she put her muscle behind the SPDR SSGA Gender Diversity Index ETF, an exchange-traded fund that invests in businesses where females are well represented throughout senior leadership and on the board.

Mitchem helped to create the index for the $272 million ETF, which launched in March, by drawing on proprietary SSGA research identifying women-powered companies. The firm expects these corporations to outperform, and exhibit lower volatility than, their less gender-diverse peers. The SSGA fund, whose ticker symbol is SHE, was seeded with $250 million from the California State Teachers’ Retirement System, which may allocate as much as $500 million. Its holdings include Warren Buffett’s Berkshire Hathaway, Home Depot and software giant Oracle Corp.

“Balanced teams of women and men making decisions together breaks groupthink,” Mitchem told Institutional Investor in March. In her view, having a female chief executive or directors isn’t enough: “You can’t judge a company based on having a woman CEO. That’s one person. And boards don’t run companies.” Before joining SSGA in 2010, Mitchem briefly led BlackRock’s U.S. defined contribution group and ran U.S. transition services for Barclays Global Investors, which New York–based BlackRock had acquired in 2009. In her new role Mitchem, who holds an MBA from the Stanford Graduate School of Business and is a former Fulbright Scholar, has taken the reins of an asset manager with a storied history.

In 1971, Wells Fargo created one of the first institutional index funds; 23 years later it launched one of the first target date fund lineups. Target date funds are now the most popular investments for 401(k) participants, gathering the majority of new fund flows. As part of a bank, Wells Fargo Asset Management has seen its share of upheaval. When its parent firm bought troubled Wachovia Bank during the 2008–’09 financial crisis, the asset manager doubled in size by integrating Wachovia’s Evergreen Investments, which managed about $246 billion in 2008.

Mitchem has inherited one of Wells Fargo’s most promising groups, particularly as banks continue to retrench in traditional businesses in the wake of the financial crisis. The bank has said that it will keep committing resources to grow asset management, which requires less capital than other banking services and provides much steadier revenue.

Still, Mitchem will need to devise a strategy to confront challenges such as investors’ love affair with lower-cost, and less profitable, passive funds. In the first quarter of 2016, her firm’s assets were down 2 percent year-over-year, partly because of redemptions from equity funds and lower market valuations on its remaining holdings.

Follow Julie Segal on Twitter at @julie_segal.