T. Rowe Price Group Inc.’s chief executive officer sees tax-loss harvesting strategies as a growth area, but remains confident that its offerings won’t draw regulatory scrutiny.
The money manager’s separately managed account “business is where a lot of the emphasis on tax-loss harvesting and tax optimization has really manifested itself,” T. Rowe CEO Rob Sharps said in an interview Monday with Bloomberg Television.
Tax-loss harvesting typically involves selling certain positions in a portfolio at a loss in order to lower capital gains levies over time. At an industry gathering in July, some US Treasury Department officials expressed concerns over industry tactics aimed at helping clients cut their tax bills.
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While acknowledging that there are “certain products in the market that are likely to come under more scrutiny,” Sharps said he’s “very comfortable” with the approach that T. Rowe would use.
Even as many firms on Wall Street embrace tax-reduction strategies, T. Rowe competitors Charles Schwab Corp. and Fidelity Investments have both begun to rein in such methods.
T. Rowe, with $1.9 trillion of assets under management, has been struggling since 2022, when plunges in the stock and bond markets prompted billions of dollars in client outflows.
The Baltimore-based firm launched its first interval fund with Goldman Sachs Group Inc. last month, which allows retail investors to invest in alternative assets as the industry looks for new sources of revenue in private markets.
T. Rowe also acquired alternative credit firm Oak Hill Advisors in 2021 and hired Bill Cashel earlier this year to lead its alternatives push in the US wealth market. He was formerly a partner at AQR Capital Management, which has helped pioneer tax-aware investing.
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