BlackRock Inc. is shaking up its alternatives business, with roughly $300 billion of assets, as the firm seeks to build more focused teams for private credit and direct equity strategies.
Jim Keenan, who led global credit, will now focus exclusively on private credit, according to a memo to employees Thursday. Leveraged finance, high-yield and more liquid credit strategies will sit alongside traditional fixed-income strategies and be overseen by Rick Rieder, chief investment officer of global fixed income.
Edwin Conway, who had been in charge of the firm’s overall alternatives unit, will now lead a group devoted to venture, private equity, infrastructure and growth equity investing, as well as investment strategies related to the world’s transition to clean energy. As a result of the changes, BlackRock will no longer have a standalone alternatives unit for all private assets.
“Where clients once thought of private markets as an alternative to fixed income or equities, today they’re talking about alternatives as essential components in their asset allocation,” Conway and Rich Kushel, head of the portfolio management group, said in the memo. “By creating more focused teams and a stronger, more cohesive investment platform, we are developing our capabilities as alternatives become less alternative.”
BlackRock has won major mandates in recent years to manage whole portfolios for clients, spanning equities, bonds and private assets.
The world’s largest asset manager, which oversees about $9 trillion, is seeking to capitalize on the continued growth of private markets even after central banks jacked up interest rates to fight inflation, which has driven up yields on government and corporate bonds. Clients have told BlackRock that they expect to increase their allocations to private equity and credit because they can offer even more attractive returns than public markets.
The company, which frequently shuffles senior personnel, also consolidated key data, technology and Aladdin risk-management groups under Sudhir Nair, according to a separate memo from Chief Operating Officer Rob Goldstein.
Lance Braunstein, who’s leading engineering for the Aladdin investment-management system, will join BlackRock’s global executive committee.
“We are simultaneously announcing organizational and leadership changes focused on promoting existing leaders within each business that will accelerate their growth by creating better alignment, internally and externally, and even tighter focus for teams, resources and leadership,” BlackRock Chief Executive Officer Larry Fink and President Rob Kapito wrote in another memo.
BlackRock announced several other changes:
The firm is consolidating alternatives distribution responsibilities into its broader client business; David Lomas, most recently global head of BlackRock Alternatives Specialists, is leaving after 15 years
The company will include its multi-alternatives business in a wider multi-asset strategies and solutions business, which includes active, index, factor and alternatives capabilities.
Infrastructure and real estate debt teams will become part of the firm’s private credit team, reporting to Keenan.
By Silla Brush and Sridhar Natarajan / Bloomberg