BlackRock today said it's creating five investment groups to replace the portfolio-management group, which was responsible for overseeing investment products. Alpha strategies, led by Quintin Price, BlackRock's London-based global chief investment officer of fundamental equities, will include actively managed fixed income and equities. Amy Schioldager, who currently heads the equity indexing business, will lead beta strategies, which includes passive products such as ETFs.
Multiasset strategies, which generate returns for investors through asset allocation, will be managed by Ken Kroner, head of the global market strategies group. The alternative-strategies unit will be overseen by Matt Botein and includes the real estate and private-equity businesses. Richie Prager will lead trading and liquidity strategies, which includes cash and securities lending.
Price, Schioldager and Kroner will join the global executive committee, as will Rob Goldstein, head of BlackRock Solutions and the institutional group, Hildebrand, who will join the firm in October, and Barbara Novick, one of the co-founders and head of government relations.
Separate Units
Instead of a single global client group, BlackRock will have two client-oriented units that will be responsible for distributing products to investors. The first one will be made up of BlackRock Solutions, the unit that advises financial institutions and governments on hard-to-value assets, and the institutional group. It will be managed by Goldstein. The second will include sales of iShares, BlackRock's ETF business, and retail funds. That will be led by Robert Fairbairn, currently the head of BlackRock's global client group.
With its range of assets, BlackRock has increasingly been pointing to its role as a provider of investment "solutions."
The reorganization will help the firm provide products to investors in what they call the "new world" characterized by slower growth, higher volatility and macroeconomic uncertainty, BlackRock said in the memo.
'New World'
Investors "want a trusted and versatile adviser -- someone who can solve the complex problems that have reshaped investing in the new world, including the need to ensure pension funds will meet their obligations, that individuals will not outlive their retirement savings and that foundations and endowments are able to sustain their missions for the long term," BlackRock said in the memo.
BlackRock is part of a small group of money managers trying to provide products such as asset allocation, alternative funds such as hedge funds, risk management and passive funds in additional to traditional investing, wrote Eric Berg, an analyst at RBC Capital Markets, in a July 24 research report.
"In the future it won't be enough for a money manager to be a stock picker only or a firm that only avoids major losses in the bond market," Berg and his colleagues wrote. "We believe BlackRock is further along than any of its competitors in developing this concept of solutions-oriented money management."