BlackRock Hires Credit Suisse's Vasan Amid Push to Attract Retail Investors
July 12 2016 - 12:30PM
Dow Jones News
Giant money manager BlackRock Inc. has hired longtime Credit
Suisse Group AG executive Philip Vasan as part of its push to
attract more individual clients.
Mr. Vasan, Credit Suisse's head of private banking for the
Americas, is leaving the Swiss lender this month after 23 years, as
the bank previously announced. At BlackRock, he will coordinate
efforts to develop products and new portfolios for private banks
and independent wealth advisers. He will join the firm in
September, according to an internal memo provided by the
company.
As head of investments and portfolio solutions for BlackRock's
U.S. wealth advisory unit, Mr. Vasan, 57 years old, will report to
Salim Ramji, who last year became head of that business after
previously working on firm-wide strategy.
The idea behind the new role is to customize ways to combine
actively managed mutual funds and index-tracking products such as
iShares exchange-traded funds. That will allow the firm to sell a
broader array of products that trade in stocks, bonds and other
assets, generating more fees for BlackRock.
"Clients want both active and index. Our strategy going forward
is to offer advisors the range of solutions they need--and in the
process create deeper and stronger relationships," Mr. Ramji wrote
in the internal memo.
BlackRock is gearing up for new U.S. rules designed to protect
individual clients' interests in retirement planning. Analysts say
the world's largest money manager is poised to benefit from a new
set of U.S. Department of Labor rules governing how the financial
industry delivers retirement-savings advice. The new so-called
"fiduciary rule" is likely to benefit BlackRock's large
passive-investing business, analysts say, by increasing overall
client flows into lower-cost products like ETFs.
BlackRock, like many of its peers, is also seeking ways to marry
its active and passive funds and tout the benefits of both types of
investing.
The Labor Department rules are aimed at curbing billions of
dollars in fees that savers pay annually for retirement-savings
accounts, and at discouraging financial advisers from recommending
products primarily to earn commissions for themselves.
Mr. Ramji said at BlackRock's mid-June investor day that part of
its technology system, called Aladdin, that helps with portfolio
management is increasingly being used by family offices and other
financial advisers to create portfolios tailored to individual
investors' risk and cost appetites.
Retail assets represented about 12% of BlackRock's $4.7 trillion
in assets under management, and 35% of fees, in the first quarter.
During the same period, the iShares exchange-traded fund unit
accounted for 25% of assets and 35% of fees.
Before running Credit Suisse's U.S. private-banking unit, which
the bank is winding down as part of a broad restructuring, Mr.
Vasan built and led the bank's global prime-brokerage unit, which
finances trades and loans money and securities to hedge funds and
other asset managers. The Wall Street Journal reported in 2010 that
under Mr. Vasan, the unit grew to generate about $2 billion in
revenue for the investment bank as it took advantage of the Swiss
bank's relative strength during the financial crisis.
Mr. Vasan previously ran Credit Suisse's global equity
derivatives and convertibles business and was global head of
foreign exchange. He has a doctorate in economics from Harvard
University.
BlackRock started as a money manager for large institutional
investors like pension funds and sovereign wealth funds. It has
sought to boost its retail assets under management in recent years,
including by combining its retail and iShares sales teams in
2012.
Last year, BlackRock bought robo-adviser FutureAdvisor and has
since partnered with banks and brokerage firms to offer the
digital-advice service to their clients. By mid-June about 5,000
retail clients were using the platform.
Write to Sarah Krouse at sarah.krouse@wsj.com and Jenny
Strasburg at jenny.strasburg@wsj.com
(END) Dow Jones Newswires
July 12, 2016 12:15 ET (16:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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