By Rebecca Ungarino
BlackRock is changing its strategy for interacting with wealth-management clients in the U.S., shifting a seasoned fund-distribution executive into a new role designed to cultivate relationships, including with clients in Texas, where it has run into criticism over environmentally conscious investing.
The firm, which oversees $10.5 trillion of assets, is also putting a longtime BlackRock wealth leader in charge of reorganized teams catering to U.S. wealth clients, Barron's has learned. The shift comes as BlackRock, already the world's biggest asset manager, seeks to expand its ties with rich investors and calm a backlash over oil and gas investment strategy, among other areas.
The firm, led by CEO and co-founder Larry Fink, is trying to mend fences in Texas, in particular. It has faced fierce public criticism from conservative state officials there and lost business over environmentally conscious investing practices.
Michael Lane was named to a new position called chair for U.S. wealth clients. The executive, who lives in Austin, Texas, and joined BlackRock six years ago after 14 years with the Texas-based money manager Dimensional Fund Advisors, will work with BlackRock's "largest and fastest growing" registered investment advisory clients, according to a previously unreported March company memo reviewed by Barron's.
He will report to Mark Wiedman, a top executive who runs the global client business.
He will "help support important stakeholder relationships in the state of Texas and beyond," working with an internal group called the global wealth council to "build better connectivity with our most strategic clients around the globe," according to the memo, from Wiedman and U.S. wealth advisory co-heads Joe DeVico and Jaime Magyera.
BlackRock relies on links to financial advisors at all types of wealth advisory firms to get its many products -- exchange-traded funds, private market strategies, model portfolios -- into the hands of as many investors as possible. The company's relationships with some clients have been strained as it has dealt with highly public blowback from Republican officials across states including Florida, Mississippi, and North Carolina, over what they call unfair investing practices.
Last month, a Texas school fund told BlackRock that it would end a contract with the money manager over its perception that the firm is abandoning fossil fuel energy producers.
"We were dismayed by your announcement to terminate BlackRock's management of approximately $8.5 billion of Texas Permanent School Fund assets. Your actions put short-term politics over your long-term fiduciary responsibilities," Mark McCombe, a BlackRock vice chairman, responded in a letter. "The welfare of all Texans remains our shared priority. We are fiduciaries with a mandate to maximize performance for the people that entrust us to manage their money."
The firm said last month it would acquire an asset manager called SpiderRock Advisors, in which it previously had taken a minority stake, as it seeks to offer more customized investing options to wealth management firms' clients. It is also looking to distribute alternative assets from its recent acquisition of the private investment firm Global Infrastructure Partners to financial advisors and their wealthy clients.
"We also think there's a great opportunity to bring GIP's capabilities to private wealth globally," Martin Small, BlackRock's chief financial officer and global head of corporate strategy, told analysts this month.
Internally, the New York-based firm said it is combining teams under the U.S. wealth advisory banner, including two units called the enterprise team and the investment solutions group, to bring client coverage under a single team. Jared Murphy, who has been with BlackRock for nearly two decades, will lead the combined group.
Lane will work alongside both John Kelly, who joined BlackRock last year to run global corporate affairs, and the team led by DeVico and Magyera. A spokesperson for BlackRock declined to comment beyond the contents of the March memo.
Write to Rebecca Ungarino at rebecca.ungarino@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 25, 2024 15:50 ET (19:50 GMT)
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