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BlackRock's Larry Fink starts biggest overhaul in years
AFTER building a financial powerhouse over three decades, BlackRock Inc chief executive Larry Fink is charting a path for growth beyond the United States.
Mr Fink announced a massive overhaul of the firm's leadership in a memo on Tuesday, shifting more responsibility to region-specific leaders as well as installing new management in its alternatives investment division and reorganising staff.
The leadership changes reflect BlackRock's desire to cement client ties beyond the Americas, where most of its revenue still originates.
Mr Fink frequently underscores BlackRock's desire to attract customers outside the US and sees great untapped potential abroad.
The company, which oversees about US$6 trillion in assets, is also using deal-making to advance that goal. "It shows how hard it is to find growth here in the US, where the market is saturated," said Kyle Sanders, an analyst at Edward Jones.
China and Latin America will be key battlegrounds for the asset manager in years ahead, he said. "It's time to take that strategy and that playbook from the US and try to deploy it in other regions," Mr Sanders added.
The changes also heighten speculation about who will succeed Fink, 66, as CEO. A handful of executives are considered to be in the running, including two whose roles are shifting. In recent years these proteges have been shuffled in a variety of senior positions, with Mr Fink preferring not to let one clear successor emerge.
Mark McCombe will take on the newly created role of chief client officer. Mark Wiedman, who earlier this year was promoted to head of international and corporate strategy, will take on Latin America.
The firm also said it's establishing Latin America as a region organisationally in parallel with Asia-Pacific and Europe, the Middle East and Africa, or EMEA.
To achieve its goal of getting closer to clients outside the US, responsibility for institutional client businesses will fall to regional leaders: Mr McCombe in the US and Canada; Rachel Lord in EMEA; and Geraldine Buckingham in Asia-Pacific.
The strategy tracks with the vision Mr Fink laid out at the company's investor day last year. "We must connect with each client with their cultures, which means we must be Japanese in Japan, Mexican in Mexico, German in Germany and American in the United States," he said at the time.
BlackRock has shown an appetite for deal-making abroad in recent years. It acquired the asset management unit of Citibanamex, located in Mexico, in 2018. It announced plans to acquire French software provider eFront in March.
The company is making leadership changes as it addresses other challenges in the asset management industry. With an intensifying war on fees for passive products, the firm has been focusing on alternative investments such as private equity and real estate, which usually charge higher sums.
Edwin Conway, who previously led BlackRock's interactions with institutional clients, will become global head of the alternatives business, according to the memo. Jim Barry, the firm's head of real assets within the unit, will become investment chief for the group.
BlackRock's alternatives push is meant to demonstrate it can be a major player beyond indexed products, which account for about two-thirds of assets under management.
On Monday, the New York-based company said it had completed its first fundraising round for a private equity vehicle. The Long Term Private Capital fund secured US$2.75 billion from investors, Bloomberg reported on Monday. BLOOMBERG