(Bloomberg News) BlackRock Inc., seeking to reverse withdrawals from active funds and boost assets as its acquisition spree ends, is expanding top leadership and shaking up its investment unit in the most sweeping overhaul since it became the world's largest asset manager.

BlackRock is adding eight executives to its global executive committee, led by Chief Executive Officer Laurence D. Fink, bringing the total to 21, according to an internal memo sent today to employees, a copy of which was obtained by Bloomberg News. The portfolio-management group headed by Rich Kushel will be replaced by five new investment units, and Kushel will become deputy chief operating officer, working under President Robert Kapito and COO Charles Hallac.

Fink, who co-founded New York-based BlackRock more than two decades ago, is moving more fund-management executives into top leadership roles as he seeks to expand by attracting assets rather than making transformational deals. Since the December 2009 purchase of Barclays Global Investors, which vaulted BlackRock to the top rank by assets, investors have pulled about $70 billion from active stock and bond funds, not including merger-related redemptions, and the shares have trailed peers.

"Every day we hear that our clients are facing unprecedented challenges: volatility, low yields and underfunding," Fink wrote in the memo. "The firm's senior leadership is confident that our new organizational structure will allow us to navigate this radically new world more effectively" for investors and shareholders, he wrote.

Biggest Manager

The BGI acquisition helped give BlackRock its current $3.56 trillion in assets and made it the biggest manager to combine active and passive strategies, adding exchange-traded funds to active stock and bond funds, real estate and hedge funds. Separately, the firm added clients such as governments in the U.S., Greece and Ireland to its BlackRock Solutions advisory business, which helps analyze hard-to-value investments.

At the same time, BlackRock has struggled to leverage its size into client deposits, as equity performance lagged behind rivals and bond returns rebounded only recently from the 2008 credit crisis. That left smaller rivals Pacific Investment Management Co. and DoubleLine Capital LP, led by top-performing fund managers Bill Gross and Jeffrey Gundlach, to attract most of the new money flowing into active bond funds.

BlackRock's active bond funds were hurt by the 2008 financial crisis and its aftermath. Performance has since rebounded, with 71 percent of BlackRock's active taxable bond assets beating rivals over a one-year period, and 81 percent outperforming over the past three years.

'Not Hitting'

On the active equity side, performance is "still not hitting as well as we need to," Fink said last month on a conference call with investors and analysts. About 56 percent of stock-fund assets have trailed peers over the past year. Investors have pulled a combined $9.9 billion from BlackRock's active stock and bond funds this year through June 30.