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Money Management

BlackRock announces major restructuring and executive moves

BlackRock has begun implementing changes to its business structure as it seeks "stay of ahead of our clients’ and society’s needs."

BlackRock (BLK) detailed structural changes first announced in January in an internal memo Tuesday.

The memo, which was obtained by Pensions & Investments, outlined major changes to the $5.98 trillion manager's operations including:

• The firm decentralized its institutional client business and moved to regional coverage.

• BlackRock's alternative investment platform was elevated to a specialized business unit akin to its iShares ETF franchise.

• New roles such as chief product officer and chief client officer were added to enhance innovation and investor engagement companywide.

• Latin America was separated from BlackRock's North American coverage and established as a business region on a par with the firm's Asia-Pacific and Europe, Middle East and Africa units.

The changes are essential to BlackRock's "biggest opportunity in a decade" to differentiate itself to "ensure we stay ahead of our clients' and society's needs," said Laurence D. Fink, chairman and CEO, and Robert Kapito, co-founder and president, in the memo to the firm's employees.

BlackRock announced a rash of high-level employee promotions across the company designed to appoint "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. One way we develop this type of leader is by regularly moving people into new roles," Messrs. Fink and Kapito said in the memo.

As part of BlackRock's new regionally focused institutional investor business, Senior Managing Director Mark McCombe was named to a newly created role of chief client officer, in addition to his existing positions as head of U.S. and Canada (formerly head of Americas) and co-head of client portfolio solutions.

In his new role, Mr. McCombe will lead the firm's strategic partner program, which manages the firm's largest partnerships with institutional investors globally as well as other teams that support specialty investors such as insurance companies.

Mr. McCombe is one of six executives identified by the company as potential successors to Mr. Fink.

Senior managing director Mark Wiedman, who also is a member of BlackRock's succession sextet, also was handed a new role as head of Latin America, which had been part of Mr. McCombe's duties. He also oversees APAC and EMEA regions as part of his position as head of international and corporate strategy.

Jessica Tan, managing director and formerly Mr. Fink's chief of staff, was named head of U.S. corporate strategy. Her successor has not been named.

As part of the regionalization of BlackRock's institutional client business, Managing Director Sarah Melvin assumed the new role of head of U.K.

She headed the firm's U.S. and Canada institutional client business and was replaced by Managing Director Zachary Buchwald, who retained his role as head of the U.S. financial institutions group, which serves insurance company investors. Mr. Buchwald's successor has not been named.

Managing Director Anne Ackerley continues to head BlackRock's U.S. and U.K. defined contribution plan business, with the addition of oversight of the retail financial institutions group. She also was named head of the firm's retirement solutions group. Both positions are newly created.

In other changes in regional assignments, Managing Director Armando Senra was named head of U.S. Canada and Latin America iShares. He assumed the role from Managing Director Martin Small, who earlier became head of BlackRock's U.S. wealth management business.

Mr. Senra previously was head of Latin America and was replaced by Managing Director Dominik Rohe, who headed the firm's Australia business. He in turn was replaced in Australia by Managing Director Andrew Landman who remains head of BlackRock's client business in the APAC region.

Senior Managing Director Edwin Conway was named global head of BlackRock Alternative Investors.

Previously, he was global head of BlackRock's institutional business, a job which was eliminated as part of the firm's move to regional client focus.

In his new role, Mr. Conway is "responsible for extending our investment capabilities and commercializing their potential, including a closer alignment between investment and distribution," the memo said.

Messrs. Fink and Kapito said in the memo that the elevation of BAI to a specialist business within BlackRock will be "run as a global business that integrates a specialized sales force with manufacturing."

Mr. Conway replaced Senior Managing Director David Blumer, who will continue his work in relationship management with some of the firm's large U.S. and Swiss institutional investors and remains chairman of BlackRock's Swiss business.

James "Jim" Barry, managing director and global head of real assets, was named to be BAI's first chief investment officer.

To better serve BAI and other investment areas within BlackRock, Senior Managing Director Patrick Olson was named to the new role of chief product officer, while retaining his role as deputy chief operating officer.

Mr. Olson's task is to "lead a more strategic approach to the way we manage our products and the client relationships they represent," the memo said, "he and his team will determine our priorities for product development globally."

Rick Rieder, BlackRock's iconic portfolio and CIO of fixed income, added a newly created role to his duties — head of global asset allocation — in addition to portfolio management duties on the investment team.

One of Mr. Rieder's former roles as head of Americas fundamental fixed income was assume by Managing Director Robert "Bob" Miller, who remains head of U.S. multisector fixed income.

Appointments in some of BlackRock's specialty client areas include Managing Director Charles Hatami's assumption of a new role as head of the firm's institutional insurance investor practice, in addition to his existing role as global head of the firm's financial market advisory team that advises clients on products such as Aladdin, BlackRock's risk-management system.

Vice Chairman Philipp M. Hildebrand was named chairman of the FIG and FMA teams, in addition to his position as head of BlackRock's investment institute and sustainable investing units.

Robert Fairbairn was named vice chairman, a new role, and will remain responsible for relationship management of some of BlackRock's most complex clients as well as co-chairing the firm's Human Capital Committee, the memo said.