T. Rowe Price

Chapter ElevenNEW OPPORTUNITIES: MUTUAL FUNDS, PENSION PLANS, AND THE LAUNCH OF THE GROWTH STOCK FUND, 1950–1960

Almost by accident – or perhaps the reward of a divine providence for a lot of hard work and an enormous amount of patience – the firm became involved in two large growth markets in the early 1950s: mutual funds and pension plans. They were to become the major driving forces of its business in the future.

The timing was perfect. The Growth Stock Fund's stellar performance was the best advertising the company could have. Certainly Mr. Price had known about the mutual fund business, and had suggested it fifteen years before at Mackubin, Legg. But even he could not have imagined the powerful political and economic forces that would propel these two industries over the next fifty years, with his firm on the crest of the wave.

To be properly executed at that time, a business like T. Rowe Price and Associates was a high‐overhead operation. A research department had to be in place, with at least five or six analysts to actively cover some two hundred corporations. A strong administrative staff was required to run the back office, keep up with government paperwork, perform the accounting, and keep track of client and fund portfolios. A well‐trained and experienced assistant counselor staff was needed to provide strong support to the counselor teams in dealing with clients. Several senior counselors had to be in place to make investment decisions and directly interact with ...