The leadership changes reflect some of BlackRock's main challenges,including institutional outflows amid volatile markets. (Photo:Bloomberg)

(Bloomberg) –BlackRock Inc. is launching a massive overhaul ofits leadership to help navigate mounting challenges across theasset-management industry, from global expansion to pressure onfees.

The world's largest asset manager, led by Chief ExecutiveLarry Fink, is installing new leaders at its alternativesinvestment division, reorganizing staff and shifting moreresponsibility for clients to regional leaders, according to a memoto staff Tuesday.

The leadership changes reflect some of BlackRock's main challenges, including institutional outflows amid volatile markets.The company is working to expand its business outside the U.S.,which it has also done through deal-making in recent years. Thefirm is also trying to expand outside of indexed products bybolstering its technology and its alternatives businesses.

The changes come amid speculation about who will succeed Fink,66, as the firm's CEO. A handful of executives are considered to bein the running, including two whose roles are shifting, accordingto the memo. In recent years these proteges have been shuffled in avariety of senior positions and Fink has said he prefers not to letone clear successor emerge.

Two men thought to be contenders received new responsibilities.Mark McCombe will take on the newly created role of chief clientofficer. Mark Wiedman — who earlier this year also got a new job ashead of international and corporate strategy — will take on LatinAmerica.

The firm said it is establishing Latin America as a regionorganizationally in parallel with Asia-Pacific and Europe, theMiddle East and Africa, or EMEA.

Low-fee pressure

Asset managers are under pressure as volatility roils marketsand investors pile into low-fee funds. The industry is deployingtechnology across its businesses to reduce costs and expanding itsofferings in alternatives such as private equity and real estate,which usually charge higher fees.

BlackRock said in January that it was cutting 3 percent of itsglobal workforce, the largest reduction in its headcount since2016. Shares of the firm were little changed at 10:18 a.m. in NewYork trading and are down about 13 percent with dividendsreinvested in the past year.

Edwin Conway, who previously led BlackRock's interactions withinstitutional clients, will become global head of the alternativesbusiness, according to the memo. Jim Barry, the firm's head of realassets within the unit, will become investment chief for thegroup.

BlackRock has sought to expand beyond indexed products, whichaccount for about two-thirds of assets under management, andbolster its alternatives business. On Monday the New York-basedcompany, with about $6 trillion in assets, said it had completedits first fundraising round for a private equity vehicle. The LongTerm Private Capital fund secured $2.75 billion from investors,Bloomberg reported yesterday.

Other moves outlined in the memo

Anne Ackerley will assume responsibility for the retailfinancial institutions group business and take sole leadership ofthe retirement solutions group. BlackRock Vice Chairman PhilippHildebrand will serve as chairman of both the financialinstitutions group and financial markets advisory teams, inaddition to his other roles. Rick Rieder will lead the globalallocation investment team, and will be a portfolio manager forglobal allocation alongside Dan Chamby, Russ Koesterich and DavidClayton. Supurna VedBrat will become head of global trading. RichiePrager will retire in July. Rob Fairbairn will become vice chairmanof BlackRock, responsible for some of the firm's most complexclients and will report to Fink. Armando Senra becomes head ofU.S., Canada and Latin America iShares; Dominik Rohe succeeds Senraas head of the Latin America region; and Andrew Landman succeedsRohe as head of Australasia.

The Wall Street Journal reported the changes earlierTuesday.

“Today we are making a number of changes designed to ensure westay ahead of our clients' and society's needs,” Fink and PresidentRob Kapito wrote in the memo.

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