Principal Financial Group Inc. (PFG) CEO Larry Zimpleman says he sees growth opportunities in the company’s asset management and international retirement businesses. To that end, Zimpleman says PFG has completed seven acquisitions in those segments in recent years, investing a total of $2.2 billion of capital.
“I think the other perhaps lesser-known feature is that we fairly dramatically reshaped the businesses, not necessarily because of the financial crisis, because this reshaping actually started in 2007,” Zimpleman says. “If you look at our 2013 operating earnings, which is the best measure of financial performance, we had basically $1.06 billion in earnings. That was a record, just surpassing the prior record, which was like $1.058 billion in 2007.”
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Zimpleman says that from 2007 to the present, Principal Financial Group has replaced about $150 million of spread-based and risk-based business with fee-based business. He says fee-based business now represents 63% of earnings.
“In 2007, we had only about 45% of the earnings being fee-based,” Zimpleman says. “So we’ve made a fairly dramatic transition over that period of time and we plan to continue that transition with higher percentages of earnings coming from fee-based business.”
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