(Updates with comments from Latham in fifth paragraph.)
Sept. 6 (Bloomberg) -- BlackRock Inc. named Mark Wiedman global head of iShares, the biggest provider of exchange-traded funds, replacing Mike Latham, who will become chairman of the unit.
Wiedman, a managing director in charge of corporate strategy at New York-based BlackRock, will report to Robert Fairbairn, head of the firm’s global client group, the executives wrote today in separate memos to employees, copies of which were obtained by Bloomberg News. Latham, in his new role, will provide full-time “strategic counseling” and focus on advancing a three-year strategic review of iShares.
BlackRock, which entered the ETF business with its December 2009 takeover of Barclays Global Investors, last year reorganized the iShares division to unite the U.S. and foreign portions of the business. Latham, 45, was named head of iShares as part of the revamp last July, as Rory Tobin, the former head of the international business, left. BlackRock is now pushing into actively managed ETFs as it looks to expand iShares’ more than $600 billion in assets.
Latham approached BlackRock Chief Executive Officer Laurence D. Fink, President Rob Kapito and Fairbairn this year to “discuss his desire to take a position that didn’t involve the travel and pace of running a global business on a day-to-day basis,” Fairbairn wrote in the memo to employees. Apart from his role as chairman and a member of iShares’ board of directors, Latham will continue as co-head of BlackRock’s San Francisco office, which houses 1,700 employees, Fairbairn wrote.
‘A Personal Decision’
“Ultimately, it was a personal decision,” Latham said in a telephone interview today. “I really wanted to step back from the pace of running a global business and focus on where I can add value.”
Wiedman, 40, helped start BlackRock’s advisory business and led many of the company’s assignments assisting clients in evaluating their investment portfolios during the financial crisis of 2008. He also helped create PennyMac, a mortgage firm BlackRock backed in 2007. In his new role, he will continue to be based in New York, while spending time in the San Francisco, London and Hong Kong offices.
“He brings to iShares broad experience developing and executing strategies for business growth, skill at developing deep, large commercial relationships with clients, and strong connections across many of BlackRock’s businesses,” Fairbairn wrote in the memo.
BlackRock, which controls about 39 percent of global ETF assets, competes with State Street Corp. and Vanguard Group Inc. Through the end of July, BlackRock’s U.S. ETF business had attracted $14.8 billion in investor deposits, compared with $25 billion by Vanguard and $5.6 billion by State Street, according to data from Morningstar Inc. in Chicago. ETFs manage about $1.1 trillion in assets in the U.S., according to the Investment Company Institute in Washington.
Globally, BlackRock’s iShares attracted $43 billion in new investor business in 2010 and $33 billion so far this year, Fairbairn wrote in today’s memo.
BlackRock last week applied to open 13 actively managed equity ETFs that wouldn’t disclose their holdings daily, according to a filing with the U.S. Securities and Exchange Commission. The firm already has permission to sell active ETFs that offer daily transparency.
Active ETFs seek to combine the skill of a manager selecting investments with the trading flexibility, lower fees and tax advantages of ETFs, which typically track an index. ETFs hold baskets of securities, commodities or other assets while trading throughout the day like individual stocks.
--Editors: Christian Baumgaertel, Steven Crabill
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