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Managers of $28bn fund to exit in major BlackRock shake-up

BlackRock has reshuffled senior management on a number of teams and plans to change the PM line-up on one of its biggest active fund, according to memos seen by Citywire.

Managers of $28bn fund to exit in major BlackRock shake-up

BlackRock has reshuffled its senior management teams within its global allocation, fixed income and alternatives group while handing additional responsibilities to two executives who are seen as likely successors to its chief executive Larry Fink.

As part of these changes the firm is changing the portfolio manager line-up on its global allocation strategy, adding a star manager but saying goodbye to two. 

According to an internal memo provided by BlackRock, Rick Rieder, currently global chief investment officer of fixed income, will take on the additional role of head of BlackRock’s global allocation investment team.

Citywire A-rated Rieder will become a portfolio manager for the firm’s global allocation strategies alongside Citywire + rated Dan Chamby as well as Russ Koesterich and David Clayton.

These strategies include the $28.2 billion (£21.6 billion) BlackRock Global Allocation fund, which is currently run by Chamby, Koesterich, Clayton and Kent Hogshire

Chamby, a portfolio manager within the team since 2003, will retire by March 2020, while Hogshire, who was named a portfolio manager in 2017, will leave the firm this year. His responsibilities have been absorbed by the broader team.

Clayton and Koesterich will remain on the team. Koesterich will also take on additional responsibility of developing the firm's Global Allocation Selects managed model product suite.

The BlackRock Global Allocation fund has seen both assets shrink and portfolio managers depart over the past two years.

The fund had $41.7 billion in February 2017. However, in June 2017, when co-manager Dennis Stattman, who had managed the fund since its launch, announced his decision to retire, assets in the fund had dropped to $39.9 billion.

Stattman’s departure from the fund followed that of fellow veteran Romualdo Roldan, who had been taken off the strategy in January that year and replaced by Koesterich, Clayton and Hogshire.

Launched in 1994, the BlackRock Global Allocation fund is ranked 90 out of 152 Flexible Portfolio Funds tracked by Citywire for three-year total returns to the end of February.

Over that period, it returned 22% compared to the average fund in the category, which returned 24%, and the FTSE World TR USD index, which rose 37.27%.

As a result of Rieder's new role, Lisa O’Donnell, currently head of global allocation platform, will also take on responsibility for talent management across the investments team.

While Rieder maintains his key responsibilities within the global fixed income team, the firm has made several promotions within that group too.

Fixed income reshuffle

Most notably, Bob Miller, who is currently head of US multi-sector fixed income, will become head of Americas fundamental fixed income. Citywire A-rated Miller will take on additional responsibility in leading investment debate, connecting the firm’s New York-based fundamental investors, as well as growing and developing its investment talent, according to the memo. 

Michael Krautzberger will continue to head EMEA fundamental fixed income. Both Miller and Krautzberger will continue to report to Rieder and join the global fixed income executive committee.

Ron Sion will become Miller’s deputy in Americas fundamental fixed income and report to him.

Alternative moves 

Meanwhile, within the firm’s alternatives group, Edwin Conway, who is currently global head of BlackRock's institutional client business, will become the global head of BlackRock Alternative Investments.

Conway replaces David Blumer, current head of the alternative group, who will take on an advisory role and step down from the firm’s leadership committee.

Jim Barry, currently global head of real assets at the firm, will take on an additional role of chief investment officer for the alternative group and report to Conway. 

Richie Prager, currently head of trading at BlackRock, is also stepping down from the executive committee and will retire in July. As a result, Supurna VedBrat will become head of global trading.

Fink's potential succesors 

While there is no suggestion that BlackRock’s chief executive Larry Fink is to retire anytime soon, two executives deemed to be in the running to succeed him as CEO, Mark McCombe, head of the Americas region, and Mark Wiedman, head of international and of corporate strategy, will both take on additional responsibilities. 

McComb will run operations in the US and Canada while taking on additional responsibilities over the sales team. Wiedman will oversee Latin America in addition to Asia Pacific, Europe, Middle East and Africa.

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Kent Hogshire
Kent Hogshire Average Total Return:
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David Clayton
David Clayton Average Total Return:
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Russ Koesterich
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Bob Miller
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Rick Rieder Average Total Return:
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Michael Krautzberger
Michael Krautzberger Average Total Return:
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