While BlackRock drew $23.5 billion into its iShares ETFs, Vanguard Group Inc.'s low-cost ETFs have increased their market share this year. BlackRock's U.S. market share in the ETF business fell 1.4 percentage points to about 41 percent, compared with an increase of 1.7 percentage points for Vanguard to 18 percent, according to a report by State Street Global Advisors.

BlackRock's fixed-income ETF deposits account for more than 50 percent of industrywide flows this year, Mark Lake, a spokesman for the company, said July 18. The firm has gathered $190 billion into its index products since the beginning of 2010.

Shares Trail

BlackRock's shares rose 0.6 percent to $171.28 at 1 p.m. in New York. The shares were down 4.5 percent this year through yesterday.

BlackRock's stock has declined about 25 percent since the Barclays deal was completed on Dec. 1, 2009, compared with the 0.6 percent drop in the 20-member index of asset managers and custody banks. The shares have surged 12-fold since the firm went public in October 1999 at $14 a share.

As the firm has grown, co-founders including Ralph Schlosstein and Susan Wagner have either left or retired from an active role. With just half of the eight co-founders in an active management role, Fink is also grooming the next generation of leaders and hiring top executives such as Philipp Hildebrand, the former head of the Swiss central bank.

'Full Potential'

Fink himself, in private conversations with other Wall Street executives, hasn't ruled out that he would be interested in the position of Treasury Secretary, should President Barack Obama get re-elected, a person familiar with the matter said last month. Fink hasn't said publicly whether he would be interested in a government role if nominated. He told a senior member of his management team that he has the best job in the world at BlackRock.

In the memo today, Fink signaled to employees that he is planning to be around the firm.

"I look forward to working with all of you in the years to come to realize the full potential of this reorganization," Fink wrote.

Wagner, who led BlackRock's growth by overseeing purchases including the fund units of Merrill Lynch & Co. and Barclays Plc, retired in June and said she will join the company's board in October. BlackRock the same month replaced Robert Doll as chief investment strategist for equities. The company has also restructured its fixed-income investment team.

Revamping Investments