Ameriprise 2013 Annual Report Download - page 26

traditional asset classes, separately managed accounts, collateralized loan obligations, hedge funds, collective funds and
property funds. Collateralized loan obligations (‘‘CLOs’’), hedge funds and certain private funds are often classified as
alternative assets. Our Asset Management segment also provides all intercompany asset management services for
Ameriprise Financial subsidiaries. The fees for such services are reflected within the Asset Management segment results
through intersegment transfer pricing. Intersegment expenses for this segment include distribution expenses for services
provided by our Advice & Wealth Management, Annuities and Protection segments. All intersegment activity is eliminated in
our consolidated results.
Revenues in the Asset Management segment are primarily earned as fees based on managed asset balances, which are
impacted by market movements, net asset flows, asset allocation and product mix. We may also earn performance fees
from certain accounts where investment performance meets or exceeds certain pre-identified targets. At December 31,
2013, our Asset Management segment had $500.8 billion in managed assets worldwide. Managed assets include
managed external client assets and managed owned assets. Managed external client assets include client assets for which
we provide investment management services, such as the assets of the Columbia Management and Threadneedle fund
families and the assets of institutional clients. Managed external client assets also include assets managed by sub-advisers
we select. Our external client assets are not reported on our Consolidated Balance Sheets. Managed owned assets include
certain assets on our Consolidated Balance Sheets (such as the assets of the general account and the variable product
funds held in the separate accounts of our life insurance subsidiaries) for which the Asset Management segment provides
management services and receives management fees. For additional details regarding our assets under management and
administration, see ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ included in
Part II, Item 7 of this Annual Report on Form 10-K.
Investment Management Capabilities
The investment management activities of Columbia Management and Threadneedle are conducted through investment
management teams located in the U.S. and the UK, with growing operations in Singapore and Malaysia. Each investment
management team may focus on particular investment strategies, asset types, products and on services offered and
distribution channels utilized. These teams manage the majority of assets in our Columbia Management and Threadneedle
fund families, as well as the assets we manage for institutional clients in separately managed accounts, collective funds,
hedge funds, the general and separate accounts of the RiverSource Life companies, the assets of IDS Property Casualty
and Ameriprise Certificate Company. These investment management teams also manage assets under sub-advisory
arrangements.
Our investment management capabilities span a broad range of asset classes and investment styles. The portfolios
underlying our product and service offerings may focus on one or more U.S. or non-U.S. equity, fixed income, property,
alternative or other asset classes, and the strategies utilized in the management of such portfolios varies depending on the
needs and objectives of individual and institutional investors. We continually assess these capabilities to help ensure our
ability to provide product and services offerings that are responsive the evolving needs of our clients.
Columbia’s investment management activities are conducted by teams located in multiple locations throughout the U.S.,
including Boston, Charlotte, Chicago, Los Angeles, Minneapolis, New York, Menlo Park and Portland, Oregon. We have
implemented a multi-platform approach to equity asset management using individual investment management teams with
a combination of dedicated centralized analytical and equity trading resources. The portfolios we manage focus on varying
sizes and categories of domestic and global equity securities. Our U.S. fixed income teams are organized by sectors,
including investment grade, high yield, municipal, global and structured. This sector-based approach creates focused and
accountable teams organized by expertise. Portfolio performance is measured to align client and corporate interests, and
asset managers are incented to collaborate, employ best practices and execute in response to changing market and
investment conditions consistent with established portfolio management principles.
Columbia’s investment philosophy focuses on delivering consistent and competitive investment performance. To achieve
such performance, Columbia’s investment teams use a ‘‘5P’’ process that focuses on the five factors we believe are most
significant for delivering results to clients: product definition, investment philosophy, people, investment process and
performance expectation. These factors are continuously monitored and provide a framework around which portfolio
managers can better define their objectives and the processes through which they plan to achieve them.
Threadneedle’s investment management activities are principally conducted from its London office, with additional
investment capabilities in Singapore and Malaysia. Threadneedle’s investment philosophy is to share investment ideas and
alpha generation across teams and asset classes. Each investment management team may focus on particular investment
strategies, asset types, products and services offered and is subject to an oversight process that involves regular reviews
by the chief investment officer of investment performance and other key aspects of the investment process. These teams
manage the majority of assets in the Threadneedle family of funds, the assets of Threadneedle’s alternative investment
structures and the assets managed for Threadneedle’s institutional clients.
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