TCW

TCW has rejuvenated while keeping its core strengths intact, resulting in a Parent rating upgrade to Above Average from Average.

More than two years into her tenure, Katie Koch has breathed new life into TCW. She stepped into the CEO role in early 2023 following the retirement of David Lippman, who had held that position for a decade. An outsider with an equity background, Koch joined from Goldman Sachs to run a firm distinguished by its skilled fixed-income group but which nonetheless needed some modernizing. Koch has expanded into exchange-traded funds, for example, invested more heavily in areas like technology and sales, and made impactful hires in strategy, distribution, and operations.

The improvements support TCW’s crown jewel: its standout public fixed-income and private credit groups, which run more than 80% of TCW’s USD 201 billion in assets under management. The public fixed-income group saw three of its leaders retire between 2021 and 2024, though those transitions began before Koch joined (and are part of what prompted her hiring). But the teams remain well-tenured and collaborative, and they practice rigorous, repeatable processes that have generally produced strong long-term results.

While Koch has made many positive changes, it may not always be smooth sailing. The firm’s smaller active-equity franchise, while stable, has produced only so-so results in a competitive field. In addition to TCW employees, two outside owners, private equity firm Carlyle and Nippon Life, collectively control five board seats to TCW management’s four. This mix may change in the coming years—Carlyle reducing its stake and Nippon Life increasing its ownership would not be a surprise—and any ownership transition can shift priorities and incentives. As long as this remains an investing-first firm, it should remain in good hands.

Note: This share class' Parent Pillar rating is analyst-driven, as its Branding Name, TCW (Branding Name ID: BN00000A4R), is covered by Morningstar Manager Research.