No part of the investment industry is under as much pressure as active equities. There, easy access to cheap index funds has exposed the widespread and chronic underperformance of portfolio managers.

“If you don’t have the performance, you can’t charge the kind of historical fees that you had,” said Hunt, who’s based in Newark, New Jersey. “If you’re a benchmark-hugging firm, you’re going to be replaced with passive, and so you deserve.”

Some asset managers have merged to gain scale. As Hunt sees it, size alone isn’t enough and he thinks only three business models will thrive: indexing giants such as BlackRock Inc. and Vanguard Group; boutique firms that specialize in a certain type of asset, such as private equity; and multi-asset investors with global reach.

PGIM, the investment arm of insurer Prudential Financial Inc., oversees $1.3 trillion. It’s among the world’s largest managers of public fixed income, real estate debt and equity and private credit.

Hunt, an engineer who spent most of his career with McKinsey & Co., joined Prudential Investment Management as CEO in 2011. It was renamed PGIM in 2015. He said he intends to expand into private equity secondaries, which involves buying stakes in buyout funds. One business PGIM won’t be getting into: passive products.

“We attract really good people, we have a real meritocracy, we support people who have contrarian points of view, sometimes for years, and we encourage people to have non-consensus views,” Hunt said. “We’re oriented toward active outperformance and we don’t want to dilute that culture.”