BlackRock is grouping its institutional client segment and its BlackRock Solutions risk analytics and investment solutions business together as part of a broad-ranging reorganization aimed at better delivering the “solutions-oriented” capabilities clients are seeking today, according to an internal memo from Laurence D. Fink, chairman and CEO, obtained by Pensions & Investments.
The change, one of several announced in the memo, splits BlackRock's global client group, which included BlackRock's institutional, retail and iShares businesses, in two, with the institutional and BlackRock Solutions grouping and a separate iShares and retail grouping.
The goal, Mr. Fink wrote, is to “migrate” those institutional, retail and iShares segments from being distribution channels to being “units with a more end-to-end business approach.”
Mr. Fink wrote that the first grouping will be led by Robert Goldstein, previously managing director and head of BlackRock Solutions.
In other changes, BlackRock's client strategy groups for the U.S., Europe and Asia, as well as the company's fiduciary and LDI businesses will all be moved into BlackRock Solutions from the company's multiasset-class solutions business.
With Mr. Goldstein overseeing both the institutional and BlackRock Solutions businesses, BlackRock will be able to “more seamlessly deliver the full capabilities of the firm — including risk analytics and unbiased advice — to a broader set of clients,” Mr. Fink said.
Mr. Goldstein assumes oversight of the institutional client segment from Robert Fairbairn, a senior managing director who led the global client group. Mr. Fairbairn will focus on the grouping of the iShares and retail businesses, which together account for two-thirds of the company's revenue.
Mr. Fink also wrote that the institutional business will launch a “strategic client program” focused on the firm's largest relationships, to be led by Michael Huebsch, managing director, who previously led the multiasset-class solutions business.
On the investment side, Mr. Fink said BlackRock has replaced its centralized portfolio management group with five specialized investment groups: alpha strategies, beta strategies, multiasset strategies, alternative strategies, and trading and liquidity strategies.
Alpha strategies includes traditional long-only fixed income and equities, as well as scientific active equities. It will led by Quintin Price, senior managing director and global head of alpha strategies, who will remain chief investment officer of fundamental equities.
Beta strategies, including index equity and the core solutions, LifePath and passive overlays businesses from the multiasset class solutions business, will be led by Amy Schioldager, a senior managing director who was head of the company's index equity team.
Multiasset strategies, focused on generating alpha through asset allocation, will be led by Ken Kroner, a senior managing director. Mr. Kroner will retain his current titles as CIO and head of BlackRock Scientific Active Equities and head of the global market strategies group.
Alternative strategies, focused on high-alpha investments not correlated with traditional products, will be led by Matt Botein, a senior managing director and global head of alternatives strategies.
Trading and liquidity strategies, including cash and securities lending, will be led by Richie Prager, a senior managing director who was head of global trading. He will be global head of trading and liquidity strategies.
Amid talk that he could be tapped as U.S. Treasury secretary should President Barack Obama win re-election in November, Mr. Fink ended the memo by saying “I look forward to working with all of you in the years to come to realize the full potential of this reorganization.”
BlackRock spokesman Brian Beades confirmed the contents of the memo, but declined to offer further details.