I remember hearing about the "splitting" of T. Rowe Price Associates and T. Rowe Price Investment Managemnt last year, but didn't really know what to think of it. Over the weekend, I ran upon this barrons article which highlighed the rationale in more detail than I anticipated. So long story short, it seems T. Rowe got so big, that it needs two entities to manage investment capacity? While I think I understand this...when i start talking it out, it doesn't make much sense to me. So This helps them so at an entity level, they aren't invested too much in a single company? Or does this help them with reporting, meaning, they don't have to report owning >X% of a company? Or is this from a trading perspective, having separate entities will make it easier to trade without moving markets? When i take a step back, I don't fully understand how its that different from just having one entity?
And of course, the most important question: I don't fully understand if this is a good or bad thing for investors?
And I assume Blackrock and every other big manager >$1tn AUM has done this?
https://www.barrons.com/articles/t-rowe-price-is-splitting-in-two-what-that-means-for-investors-51606333566
Comments
https://www.morningstar.com/articles/1026626/what-t-rowe-prices-split-means-for-fund-investors
I have about 25% of my investments with TRP PRWCX, RPMGX and TRSGX .
The change makes sense to me. I don't see any downside. There could be some portfolio improvements. The analysts will change which could make some differences, but the managers will stay the same.
With the change, it might make it easier to reopen because the overall company wide ownership in some holdings might be low enough. If it did, the rush would likely cause a fast closure. Hope you can get in, Mike.