Kristi Mitchem was attracted to her new role as chief executive officer of BMO Global Asset Management (BMOGAM) by the entrepreneurial aspect of the position and the firm’s corporate culture and executive team.
Mitchem, who joined the firm this past March, has a history of helping businesses achieve their goals. Her previous position was CEO and head of San Francisco-based Wells Fargo Asset Management. Prior to that, she held leadership roles at Boston-based State Street Global Advisors (SSGA), New York-based BlackRock Inc. and San Francisco-based Barclay’s Global Investors (now a division of BlackRock).
“I think [BMO] is a fantastic franchise, but there’s more opportunity for growth and development within the asset-management space – and that’s really exciting,” says Mitchem. She replaced Richard Wilson, who retired this year.
Part of Mitchem’s role at BMOGAM will be driving client-focused innovation and developments within the firm. One area that’s particularly important to Mitchem is responsible investing (RI), which focuses on investments that consider environmental, social and governance (ESG) factors. Mitchem and BMOGAM anticipate that over the next few years, clients will increasingly seek investments that both align with their values and generate returns.
“In the past, we used to think that you would have to give up returns to invest in the things you believe in,” Mitchem says. “I think the future-focused model is how you take what you believe in and make it generate the kind of return that you need.”
She points to BMO’s long history in RI. The firm has offered RI investments since the mid-1980s; it launched one of the first lines of global RI funds in the world, including BMO Responsible Global Emerging Markets Equity Fund and BMO Responsible Sterling Corporate Bond Fund.
BMOGAM’s Responsible Engagement Overlay service, launched in 2000, uses the influence that BMOGAM has through its investments and those of its clients to encourage companies to adopt better ESG practices. Today, the firm’s ESG overlay management division has about $200 billion in assets under advisement (assets supported by the overlay service as opposed to assets under management).
Mitchem is considering ways to bring more RI knowledge and insight into the Canadian market.
“I don’t want to get too far ahead of myself in terms of the types of products and services that we’re going to be rolling out,” Mitchem says. “But I think it would be very safe to say that you’ll see us making some moves in the space over the course of the next 12 to 18 months.”
Mitchem brings her expertise in ESG to the firm. Notably, she played a large role in launching SPDR SSGA Gender Diversity ETF in 2016 as executive vice president and head of Americas institutional client group with SSGA. That ETF provides exposure to U.S. large-cap stocks and invests in an index of companies that have relatively high levels of gender diversity in senior leadership.
“The history of analytical analysis shows that companies with greater [gender] diversification tend to do better – not just in terms of revenue grown, but also in terms of margins, [return on equity] and overall [earnings per share] growth,” Mitchem says.
“That’s a case in point,” she continues, “that you can take something you believe in, such as diversity, and make it work in the context of your portfolio. And I think that’s where we’re going. The message that I’m consistently putting out there is that you don’t have to sacrifice investing in what you believe in [in order to get good returns].”
The topic of women working in the asset-management field is more than just a professional passion for Mitchem; it’s a personal one as well. “I have three girls at home,” she says. “So, when I think about one of the things that I want to achieve with my career, it’s not just making a place for all women, but making a place for them where they can be equally successful [as men can be]. That’s something that drives a lot of what I do.”
Mitchem has been involved in numerous groups that focus on diversity, such as C200, a Chicago-based international organization of women in business, and Paradigm for Parity, a group committed to closing the gender gap in corporate leadership.
Mitchem also is focused on ensuring more women appear in the financial media. “It really is the whole notion of ‘she can be what she can see’,” Mitchem says. “So, if women turn on financial television or open the pages of the newspaper to financial and market-oriented topics and they don’t see women being quoted or interviewed as experts, [those female viewers and readers] are unlikely to think that they have a place [in financial services].”
Mitchem plans to position BMOGAM’s media exposure to demonstrate diversity, and she believes the financial services industry as a whole should encourage more women to appear in the media.
“The more women we can profile, the more women can find a match in this industry,” she says. “And I think that could be really helpful in terms of driving and recruiting more women in the asset-management [sector] and financial [services] industry.”
Mitchem also plans to focus on further technological developments by BMOGAM. “[Technology] is probably the biggest sea change that we’ve seen in the asset-management [business] over the course of the past three to five years,” she says. “Very simply, the way you can characterize it is that tech has moved from being a back- office function to a front-office function.”
And in the front office, she says, a two-pronged approach is required. The first is to figure out how to use data science to enhance the quality of customer experiences and make distribution efforts more targeted and efficient. The second part is learning to use technology as part of the alpha generation process (a technology used in algorithmic trading) to achieve more stable returns.
“For us, as a long-term-focused asset manager, [the approach] is really about ‘man plus machine’,” Mitchem says. “It’s how we use new data and new data techniques such as natural language processing to be able to enhance what we already do in terms of our investment processes. We’re absolutely investing in that and I think you will continue to see that play through not only in future conversations with me, but also with leaders throughout the asset-management [sector].”
Although Mitchem is passionate about the financial services industry now, she came to the field by accident. She studied political science at Davidson College in North Carolina and planned to pursue a PhD in that field. Her plans changed when, after college, she was awarded a Fulbright fellowship. Through that program, she travelled to Latin America, where she worked with leaders in various fields, but most notably those who were working at the intersections of environmentalism and business.
RI and social development piqued Mitchem’s interest, leading her to take a job in Latin American finance on Wall Street, which kicked off her financial services career. She later earned her master of business administration at Stanford University’s Graduate School of Business.
Mitchem considers her experience in U.S.-based firms to be an asset to her role at BMOGAM.
“There are more commonalities than differences” between U.S. and Canadian banking industries, she says, pointing to the rise of digital banking, aging populations and an increasing numbers of women taking control of their financial assets, among other issues.
“Macro themes are similar,” Mitchem says, “although, certainly, market structure and micro themes have to be in tune to the specific regional environment.”
Mitchem, age 49, previously lived in San Francisco but recently has divided her time among BMOGAM’s offices in Toronto, London and Chicago. She is now deciding where to settle next. Mitchem’s husband, Tom Mawhinney, is a partner at Icon Ventures, a California-based venture-capital firm. The couple have three daughters and four dogs. While no final decisions have been made, Mitchem is leaning toward Toronto.