The world’s largest asset manager is in the midst of an overhaul that shuffles executives, preparing it for a future without its longtime leader.
An internal memo from BlackRock describes major changes to its alternatives and regional investment sectors as well as the responsibilities of its staff.
“Our goal is to streamline and simplify the firm to continue driving strong investment performance and enhance the client experience,” read the letter, from Chief Executive Officer Larry Fink and President Rob Kapito, obtained by CIO. “This will sharpen accountability and spur growth for our people and our business.”
At the center of all the moves is readying the investment behemoth for the day that Fink leaves the top spot. He co-founded BlackRock in 1988 and guided it to a huge expansion. Fink, 66, has not announced plans for a transition of power.
The company will promote more than two dozen managers, adding multiple responsibilities to their existing roles while consolidating their departments. One example is its plans for Latin America, where Mark McCombe, who receives the new title of chief client officer, will lead teams focusing on that region as well as EMEA and Asia-Pacific. He will also stay on as co-head of BlackRock’s client portfolio solutions business, which means he’ll also handle activities in the US and Canada.
Another manager, Mark Wiedman, who was named head of international and of corporate strategy in January, adds Latin America to his existing regions, the EMEA and Asia-Pac.
The $6 trillion organization recently cut 500 jobs due to market worries amid a rough 2018. But that looks to be a minor setback as it moves its focus into its alts platform, which, unlike many equities strategies, did well in 2018, returning 9% while being entrusted with only 2% of BlackRock’s assets.
Edwin Conway, whom the firm credited for last year’s performance, is now in charge of global operations, tasked with growing BlackRock’s main alternatives business, known as BlackRock Alternative Investors. Jim Barry will become the division’s chief investment officer, while also remaining global head of real assets. Barry is known for his environmental, social, and governance (ESG) work, on the firm’s wind-and-solar-farm portfolio. Mark Wiseman will still serve both as that department’s chair and as global head of active equities.
The firm’s alternative’s specialists business, also overseen by Conway, will be absorbed by the investor’s division. With this move, BlackRock has dubbed the alternative investors department as a “specialist” business, comparable to its Aladdin, ETF, and index investment areas.
Top dogs Fink and Kipito also announced the retirement of Richie Prager, a 10-year BlackRock member with a near 40-year investing career. Supurna VedBrat and Phil Vasan will replace him when he leaves on July 1. VedBrat will become head of global trading, while Vasan will head global lending and liquidity.
“Richie helped us re-architect trading, capital markets, cash, and other functions as industry, regulatory, and technology conditions evolved,” the two executives wrote, adding that the man was “key” to establishing and managing relationships with “major partners” as well as a “mentor and culture carrier for many.”
The memo, however, did not address who will replace Fink upon his own retirement. It is believed that the two Marks (McCombe and Wiedman) are ahead of the pack, but there are six potential successors rumored to take the crown. However, there were subtle hints as to the underlying means for change: a BlackRock without a Fink.
“At every level of the firm, we need business leaders who truly understand our purpose, who understand their business in a changing environment, and who are accountable for connecting their businesses with the rest of the firm,” read the memo. “One way we develop this type of leader is by regularly moving people into new roles. This movement promotes a One BlackRock perspective, generates fresh thinking, and sustains our entrepreneurial spirit.”
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Tags: Alternatives, Asset Management, BlackRock, Larry Fink, Latin America, Restructuring, Rob Kipito