BlackRock, the investment management behemoth, on Sunday announced a series of executive shifts that grooms a number of potential successors to the firm’s founder and leader, Laurence D. Fink.
While Mr. Fink, one of the most influential players on Wall Street, isn’t expected to leave anytime soon, the promotions are meant to groom a new generation of leaders.
“Periodically moving leaders to new roles as part of this process was a key rationale for the re-organization of the firm in 2012 and is a key driver of the management changes we are announcing today,†Mr. Fink wrote in an internal memorandum reviewed by DealBook. (A spokesman confirmed its contents.)
Charles Hallac, one of BlackRock’s first employees and the creator of the firm’s vast Aladdin trade management system, was promoted to co-president, according to the memo.
He will serve in that role alongside Rob Kapito, a BlackRock founder and the man most likely to take over the firm should Mr. Fink step down in the near term. Both men will continue to oversee the businesses for which they had been responsible before the executive changes.
But the move also comes as Mr. Hallac fights colon cancer, even as he regularly reports to work. His promotion was meant in part to reflect his 26 years of service to the firm as it grew to titanic size.
Replacing Mr. Hallac as chief operating officer is Rob Goldstein, the current head of BlackRock’s institutional client business. Even in his new role, he will retain oversight of BlackRock Solutions, the vaunted analytics consulting arm that has counted the Federal Reserve Bank of New York and the Greek government.
Other major players like Gary Shedlin, the firm’s chief financial officer and a respected former investment banker, will retain their current positions.
A spokesman for BlackRock confirmed the contents of the memo.
News of the executive shifts was reported earlier by The Financial Times.
TO: ALL EMPLOYEES
FROM: LARRY FINK AND ROB KAPITO
RE: NEW SENIOR MANAGEMENT ROLESOne of the keys to BlackRock’s success - past and future - is developing people and embedding our culture. For the past five years, together with the Board, we have pursued a deliberate effort to build a deep bench of executive talent by mapping leaders to roles that present them with new challenges, broaden their horizons and maximize their impact with the firm and our clients. Periodically moving leaders to new roles as part of this process was a key rationale for the re-organization of the firm in 2012 and is a key driver of the management changes we are announcing today.
Talent is something we manage vigorously and review consistently with the Board. Our intensive approach has created a wide pool of leaders, some of whom grew up at BlackRock, some of whom came here through merger, and some of whom joined from other firms. What they share is a commitment to common culture and excellence it encourages. As strong a group as we have today, developing and challenging our people is something we can never stop doing if we want to build a great and enduring company. It remains a top priority for the firm.
Among our “home grown†leaders, no one exemplifies the values and spirit of BlackRock better than Charlie Hallac, our Chief Operating Officer. An initial architect of Aladdin, Charlie has been one of our most original and gifted leaders since joining the firm shortly after its formation in 1988.
· To reflect the central role that Charlie plays at the company and his focus going forward, Charlie will assume a new position as Co-President of BlackRock, effective June 1. Working with us, Charlie will focus on defining and driving our forward strategy, developing our broad bench of leaders and continuing to instill the BlackRock culture in everything we do. The client businesses, investment groups and product management will continue to report to Charlie and Rob Kapito.
o A vital component of the forward strategy is technology and how it continues to reshape our industry and the world around us. Our ability to leverage Aladdin even more is a tremendous and unique growth driver for us. So, we’ve asked Charlie to assemble and lead a working group to think through how BlackRock technology can further transform our company and industry.
As many of you know, Charlie is battling colon cancer. Yet, even while undergoing treatment, Charlie is at the office day after day, helping us to create and execute our vision with the same genius, humor and creativity that have defined him as a leader and colleague these past 26 years. We are grateful that BlackRock will continue to benefit from his leadership in this new role.
In addition to Charlie, several other senior executives will also take on new positions, while others will continue to lead from their current roles. To ensure time for smooth transitions of responsibilities, all the changes will become effective June 1. Please note that we are not making any changes to portfolio managers or client relationship managers. The changes we are making include:
· Rob Goldstein, currently Global Head of BlackRock’s Institutional Client Business (ICB) and BlackRock Solutions (BRS), will become Chief Operating Officer. Rob began his career at BlackRock as an analyst in the Portfolio Analytics Group 20 years ago and has played a key role in developing BlackRock Solutions, the Aladdin business and, most recently, leading our Institutional Client Business. As COO, Rob will work with Rob Kapito and Charlie overseeing the day-to-day global business of the firm and ensuring the necessary connectivity, coordination and operating processes across the organization.
o Rob will continue to lead BlackRock Solutions, where he has helped to drive double-digit growth and to develop its global client base since its founding.
· Rich Kushel will become our Chief Product Officer. We are elevating this role to reflect how vital our product strategy is to our future success. Rich’s leadership of the Strategic Product Management group has redefined our product development and management process, bringing strategic focus and executional discipline to our product portfolio. Now we must take it to the next level and drive innovation throughout the organization to offer solutions that meet our clients’ most vital needs. In addition to leading our product strategy, Rich will continue to oversee the BlackRock Investment Institute and our Corporate Governance and Responsible Investment team, and he will continue to work closely with Rob Kapito and Charlie on a broad range of firm-wide issues.
· Mark McCombe, who serves as Chairman of BlackRock Asia Pacific, will become Global Head of BlackRock’s Institutional Client Business, based in New York. As head of our APAC business, Mark has put the region on a sustainable growth path by attracting top talent and sharpening our focus on clients and investment performance. Mark also has been instrumental in developing relationships with some of the firm’s largest clients, including official institutions and financial institutions in Asia, which will be invaluable in his new role. To facilitate a smooth leadership transition in APAC, Mark will continue to serve as its Chairman through year-end.
o In addition, Mark will become Chairman of BlackRock Alternative Investors (BAI). Aligning BAI and our Institutional Business under Mark’s leadership will be highly accretive to our alternatives growth strategy. He will work with Andy Stewart and Matt Botein, who will continue to co-head the alternatives business, and Edwin Conway, who (in addition to leading ICB in the U.S. and Canada) is responsible for the Alternative Investors Strategy Group.
· Ryan Stork, Global Head of the Aladdin Business within BlackRock Solutions, will become Head of BlackRock Asia Pacific, based in Hong Kong. Ryan has broad global experience and a record of growing a strategic business. As head of the Aladdin client business since 2009, Ryan has driven rapid expansion of the business globally - broadening the international mix of clients on the platform including major new clients in both Europe and Asia. Earlier in his career, he played a key role in leading integration among our client businesses in Europe, the Middle East and Africa. He will work closely with Mark McCombe and succeed Mark as Chairman of Asia Pacific at year-end.
· Quintin Price, who has led the revitalization of Alpha Strategies, will be moving to New York. The strong performance achieved for our clients - with more than 70% of assets performing ahead of their benchmarks on a one, three and five-year basis - has been one of the firm’s most significant accomplishments in recent years. Quintin will lead this ongoing effort from New York and continue to spend significant time in EMEA and Asia.
· Ken Wilson, who has served as Chairman of BlackRock Alternative Investors since its creation, will become Chairman of Alpha Strategies, working closely with Quintin to leverage the team’s momentum and to further develop and reintroduce our Alpha platform to the marketplace.
· Patrick Olson, who is Global Head of Strategy and Planning, will become Chief Operating Officer of EMEA and join the EMEA Executive Committee. Patrick, who has expressed a desire to get more directly involved in operating a business, will work closely with David Blumer, Head of EMEA, to help manage the growing complexities of operating in the region, while also providing critical connectivity around the world.
o Investor Relations and Corporate Development, that were part of the strategy organization, will now become part of Finance reporting to Chief Financial Officer Gary Shedlin.
· Salim Ramji, a Senior Partner at McKinsey & Company, will join the firm later this month as Global Head of Corporate Strategy. Salim most recently led McKinsey’s Asset Management and Retirement Practice areas and is among the most thoughtful, strategic leaders helping to shape the future of our industry. Having worked with BlackRock as a strategic advisor for many years, Salim knows the firm and its people well and will be a tremendous addition.
· Sudhir Nair, currently Head of Business Development and Implementations & Delivery for the Aladdin Business, will become Global Head of the Aladdin Institutional Business. Sudhir has played an integral role in helping to build and develop our Aladdin business over the past 14 years, initially starting as an analyst in the Portfolio Analytics Group. His deep knowledge of Aladdin as a platform and of our client base will ensure a seamless transition and continued focus on our growth strategy.
o The existing Aladdin business is being renamed to highlight its focus on our institutional client base, while Charlie leads the working group described above in exploring other ways to leverage Aladdin, including for the firm’s retail clients.
We are fortunate to have so many gifted leaders across the firm, but that has not happened by chance. It has come through our deliberate approach to developing our people, continuously giving them new opportunities and challenges. That is something we are deeply committed to doing with talent at every level of the organization. It has allowed us to build a team of leaders capable of far more than any individual and is the only way to build a great and enduring company. Please join us in congratulating all of those taking on new roles, many of them in new businesses and new parts of the world.
Finally, we want to thank everyone across the firm for everything you are doing day in and day out to make BlackRock what it is today and what it can be in the years to come.
Sincerely,
Larry and Rob
