The 2014 All-America Research Team: Brokers, Asset Managers & Exchanges, No. 1: Kenneth Worthington

<The 2014 All-America Research Team Kenneth WorthingtonJ.P. MorganFirst-Place Appearances: 1

Total Appearances: 6

Analyst Debut: 2009

Rising one position to lead this lineup for the first time is J.P. Morgan analystKenneth Worthington, who earns client praise for publishing “useful data on the industry overall, which helps with relative comparisons,” as one fund manager reports. The 42-year-old researcher is neutral on the asset managers in the group. Passive investing — specifically, via index funds and exchange-traded funds — “continues to take market share from active management, where most of the publicly traded asset managers operate,” he explains. However, Worthington does urge investors to buy Invesco, owing in part to the Atlanta-based investment manager’s scale. Passive investing affects mostly U.S. equity funds, he notes, and Invesco maintains a sizable U.S. nonequity business as well as a very large franchise worldwide. In addition, the firm has a presence in passive investing through its ownership of Invesco PowerShares, which manages ETFs. The researcher also maintains a buy rating on Washington’s Carlyle Group, dubbing the alternative asset manager and corporate private equity house “a free-cash-flow story, with pent-up earnings that we expect to be realized at an elevated pace over the next three years.” Those profits will come from performance fees the firm has yet to collect but is entitled to, now that the post-2008 credit crisis recovery has enabled Carlyle’s funds to outperform their hurdle rates, he adds. Worthington joined J.P. Morgan in 2006, after spending a decade at CIBC Oppenheimer as a research analyst covering brokerages and asset managers. He earned a bachelor’s degree in economics from New York’s Cornell University.