Express Execs: Celebrating 3 Years as Allspring

Kelly Vives: I'm Kelly Vives, chief marketing and communications officer at Allspring, and welcome to SpringTalk. Today, I'm joined by our chair and CEO, Joe Sullivan, and president, Kate Burke. We plan to discuss our past three years since becoming Allspring. I think anyone in our industry can agree it has been a pretty wild three years to run an investment management business. We came out of COVID, there was massive amounts of market volatility, one of the worst equity markets in over 20 years in 2022, a war in Ukraine, unrest in the Middle East, and now we're closely tracking inflation and the moves of the Fed (Federal Reserve). We've been tackling money in motion and navigating the markets postelection. For us at Allspring, we navigated all of that while standing up and building a new and independent company. So, Joe, Kate, thank you for joining me today.

Kate Burke: Thanks for having me, Kelly.

Joe Sullivan: Good to be here.

Kelly: So, we have a lot to fit into this short podcast today. Joe, let's kick off with you. Can you give us a quick couple of thoughts as you look back on the journey we've all been on these past three years?

Joe: Well, Kelly, it has been an incredible three years and I like to think about things in threes just to help me kind of remember and help others kind of remember. So, I put three words to this as I think about the last three years. The first one is partnership. The second one is persistence. And I think the third one is transformation. And when I think about these three words, I think about them across the dimensions that we think about with respect to the experience that our clients have with us: the investment management experience, the operational experience, and the distribution experience. On the investment experience side, we've done a tremendous amount of work around rationalizing our product offering and our platform to make sure that it's relevant and compelling. We've launched new products. We've delivered really strong results broadly over long periods of time. And in the process, we've won 14 Lipper Awards, so evidencing that we're delivering a strong client experience. On the operational side, we've been really since day one in a constant state of evolution to transform our operations and technology platforms. We were in a unique position when we started this that the transaction provided a great catalyst for us to build a brand new platform from scratch that is really fit for purpose for today's clients and what they need from a customization standpoint. We have also evolved our talent footprint. Over the last three years, we've added over 350 people that have brought specific expertise that we've needed around the world and across the various dimensions that we need. Finally, on the distribution side, we really have revamped our distribution organization, both in the U.S. and internationally, making sure that we've got the right talent and the right capabilities to be able to partner with clients and various types of clients. We've turned positive—significantly positive—from a net flow perspective in our international business. We've been making great progress in EMEA and APAC. In the U.S., we have been seeing great progress in the intermediary space and in the wealth space where we've been very focused. Our customized SMA (separately managed account) platform, Remi, has been net positive every single quarter from a flow perspective since we became Allspring, which is really, I think, a tremendous achievement. And then looking forward, we're going to be tackling next year the RIA (registered investment adviser) market. We really haven't had a significant presence there. We've had some presence, but we want to have a much more significant presence. And we're going to be launching active ETFs (exchange-traded funds) in the coming months. So, we've got a lot to think about and a lot to work on going forward.

Kelly: Continuous state of evolution is what we say, as everyone should be doing in our business. So, Kate, first, welcome officially to your first SpringTalk episode. First of many, I'm sure. But to formally introduce you to our audience, I'd love you to share just a little bit about why you made the decision to join Allspring and how this first year has gone.

Kate: Thanks, Kelly. I was excited about the opportunity to lead the transformation of Allspring into an independent asset manager. It is rare to have such a catalyst like becoming independent to really marshal the collective power of a team to improve how we do things. And that's certainly what I've experienced over the last year. This first year has flown by. It has been so enjoyable getting to know all of the wonderful people here at Allspring, from the investment teams to distribution to our talented people delivering every day for our clients across our delivery model. There's an incredible amount of excitement. And the employee ownership and engagement toward making Allspring the best that we can be? Look, as a leader, that is just a gift to help us move fast and to really make a difference. And so, it's just been a tremendous first year.

Kelly: Yeah. Thank you. And it's kind of like raising kids, I think. I just hit my five-year anniversary and it’s like, the days are long, but the years are fast. You're like, oh, my gosh, I can't believe we're already at three years as Allspring. So, Joe, I think you've spent a lot of time with clients and I would love you to share a piece of client feedback or a story in that time you spent with clients that kind of stuck with you.

Joe: So, I'll share two. I know I'm only supposed to share one, but I'll share two. Shortly before the close of the deal, before we actually became Allspring, I met with our, I think, I believe our largest client in the U.S. Very large client, longstanding client. And the client said to me, make sure when you come to market as Allspring that it reflects how big, how strong, and how good you actually are. He said you are way too understated as a company. And I think it told me that we needed to have confidence and we needed to believe in what we were bringing to the market because he was saying present yourself as big and as strong and as good as you are. The second one was a more recent example in the international space where I was meeting with a client that said they do hear and see us as truly trying to improve upon the way and elevate the way clients are treated and served and what the experience is. They believe that and that they're actually rooting for us. So, it's pretty special when your clients say, we're rooting for you, we want you to win, and we want you to achieve your mission of trying to elevate investing to be worth more.

Kelly: Yeah, I love that. So, Kate, if you think back on the year and a couple of months that you've been here, what would you see as the biggest achievement that we've accomplished in that time? There’s many.

Kate: I don't think this one is fair. This one is really not fair. Look, we've delivered really, as Joe highlighted in his opening comments, we've delivered across all of our strategic pillars on the investment, sales, and operational—really striving for excellence. And so, we're continuing to evolve our investment platform and see the strengths of fixed income and the improvement around our equity strategies. On the sales front, great strides in international and intermediary. And one area that I think really highlights our innovation and client focus is in our ability to get our customized tax-managed SMA offering Remi onto a number of new platforms this year and seeing the pickup there and knowing that we're adding value to our clients’ portfolios. And then on the operations side, it's just been an incredible year of improvement. We're cloud native. We're doing foundational work on our platforms to leverage automation and really improve our delivery and customer service. But we're not done yet. We're not yet at our goal to be the easiest asset management company to work with and we've got a lot ahead of us to do to continue to drive that level of excellence.

Kelly: Yeah, lots of good plans in the works for that. So, Joe, looking ahead, we've looked back. Now, looking forward, what are you most jazzed and excited about for 2025?

Joe: Well, Kate just talked about the fact that we've done a lot, but we still have a lot more to do. And I'm in particular very excited about, as I mentioned earlier, our launch of active ETFs, which will be coming beginning at the end of this year and then early into next year. We talk a lot about wanting to be vehicle agnostic. Our sales teams are working with their clients to understand what are the needs that they have and what are the strategies that best serve those needs and help to fulfill the objectives that they have? We don't want to be driven only to be able to deliver those in the mutual fund. But we want to be able to also deliver those in the customized SMA capability, which we do today through Remi and now we'll also do in the ETF market. So, I think it gives our clients more choice in how they want to consume the strategies that we have that can fulfill their investment objectives. That's what I'm excited about.

Kelly: Yeah. And Kate, same for you. As you look to next year, what are you excited for?

Kate: Look, I think Allspring is just at a great inflection point. Clients have really gotten to know us and our investment teams and appreciate the care we take in working with them. So, I think we're just poised to improve our business on all fronts and continue to strive for that excellence. So, I look forward to seeing us continue to raise the bar.

Kelly: Yeah. So, for this next round and to wrap up our celebratory episode, I've prepared a bonus round of rapid fire questions. So, let's start with the markets. Where will the S&P 500 Index end 2024? Kate, are you bearish, bullish, or neutral?

Kate: Not going to give you a number, but I'm going to say I'm modestly bullish. In terms of the market, I really still continue to like equities, especially that cheaper part of the U.S. equity market. We expect the equity rally to broaden and believe that any relief from a perceived looser monetary policy will likely support equity prices here in the midterm. So, I'm modestly bullish.

Kelly: And Joe, what about you in terms of rates? Where do you think those will land?

Joe: I'm hesitant just because we've got such great investors to do this, but being an old bond guy, I can't resist, right? So, I would say actually kind of in and around where we are now. I would think the 10-year will end up or settle somewhere in the range around 4.25% to 4.75%. And I think we need to get used to that kind of a rate being where 10-years will settle in at least for a little while.

Kelly: Yeah. And so, if we look back, we've had some events. We had a big focus on engaging our employees, in what we call Allspringers, and bringing them together and building community. So, I would love for each of you to share. Do you have a favorite event this year? Joe, we’ll go with you first.

Joe: We did something a little bit off-cycle in the summer called Allspring Day. And it was a day to just kind of pause during the summer and have events in each of our offices around the world. And it was so fun to see people just kind of relaxing, enjoying their time together. I was in Minneapolis with our Allspring and Galliard teams and we did lawn bowling. It just brought a big smile to my face to see everybody celebrating and then seeing all the pictures from around the world, everybody celebrating, being Allspring together.

Kelly: Yeah, it was a good day. Kate, what about you?

Kate: I think it was our Days of Connectivity, which is an event or multiple events across our different offices where we go out and volunteer with each other and in the community to give back. And that was a lot of fun and it was great to see the teams work together toward helping the local communities in which we operate.

Kelly: Yeah, that was great. And I love that it was people that raised their hands in each location to kind of take it on and organize. It was super organic, so that was awesome. Kate, what office did you visit most at Allspring this year?

Kate: Outside of Charlotte, which is our headquarters and where I am based, it was surprisingly tight, but Boston just eked out. So, lots of trips across all the different offices this year getting to know everyone.

Kelly: Joe, what about you?

Joe: Well, my home base is Minneapolis in the Allspring and Galliard offices in Minneapolis. But it seems like I'm only there part time. Kind of like Kate, we're both traveling so much. So, when I look back on it, it was in New York. I was in New York more than any. I was in a lot of the offices a lot of times, but New York was the one for me.

Kelly: Yeah, well, our New York office is small, but we get a lot of visitors because so many of our clients and partners are there. So, I guess my last question is if you were an ETF, what would your ticker be? So, Joe, why don't you go first?

Joe: All right. Admittedly a little cheesy, but it would be WIN: Win. Because that's what I expect us to do. And I think we're capable of winning, so WIN: Win.

Kelly: Love it. Kate?

Kate: XCEL: Excel. We're going to continue to excel this year.

Joe: There you go.

Kelly: Awesome. I wonder if that's taken by the Exchange. Might have to look. I think mine would be ABM: Always Be Marketing, which is what I remind all of our Allspringers to be doing because we are all ambassadors of our company and of our brand.

Kate: That’s very appropriate for you.

Kelly: Very appropriate. Always wearing the Allspring colors, right? Thank you, Joe and Kate, for helping celebrate year three of Allspring. And as always, thank you to our audience for joining us on SpringTalk.