BlackRock Hires Canada Pension Chief for Active Equitiesby
Mark Wiseman joins to attract more assets, bolster performance
Will oversee $275 billion in unit created earlier this year
BlackRock Inc. hired Mark Wiseman, the head of Canada’s largest pension fund, to run its global active equity business as the firm seeks to grow its lucrative fundamental stock picking operation.
Wiseman, 45, joins BlackRock after serving as chief executive of the Canada Pension Plan Investment Board, the country’s largest pension fund, since July 2012. He will oversee a unit with $275 billion in assets that BlackRock created earlier this year when it combined the fundamental and scientific active equity groups.
Wiseman oversaw a 70 percent increase in the Canadian pension plan assets since he was named CEO in July 2012. At BlackRock, the world’s biggest money management firm, he will be tasked with improving performance and attracting more assets into the active stock-picking business, which brings in higher fees than passive products. The unit accounted for just 6 percent of total BlackRock assets, while bringing in 17 percent of the firm’s fees as of March 31, according to a quarterly earnings report.
Assets in BlackRock’s actively managed U.S. and international equity funds dropped 12 percent to $276 billion at the end of the first quarter from $314 billion two years ago.
Performance of the fundamental equity business shows 64 percent of funds beating their benchmark or peer median over one year compared with 58 percent in a three year period and 52 percent over five years, according to the earnings report.
BlackRock’s active equity funds generated an average return of about 4.9 percent and 3.4 percent over three year and five years, compared with an industry average of 6 percent and 5.7 percent, respectively, according to Morningstar. BlackRock’s active equity business accounts for only .94 percent of the market, according to the data.
Until now, the combined fundamental and scientific active equity teams had been managed by Chris Jones, Nigel Bolton, Raffaele Savi and Jeff Shen. Bolton, Savi and Shen will become CIOs of the global equity business, said Brian Beades, a BlackRock spokesman. Jones will be pursuing other opportunities outside of BlackRock in June.
Wiseman joins after earlier changes in leadership. Quintin Price, who oversaw fundamental active stock and bond investments as head of its alpha strategies business, left last year.
In Canada, Wiseman saw assets under management increase to about C$283 billion ($215 billion) at the end of December from about C$166 billion ($127 billion) as the fund expanded its global reach.
"The hire shows the size and sophistication of CPPIB ’s in-house investing operation," said Erik Gordon, a professor of business and law at the University of Michigan.
Wiseman will join BlackRock in early September and report to Robert Kapito, president. He will also be chairman of the firm’s global investment committee and of BlackRock Alternative Investors, where he will work with Mark McCombe and Matt Botein, who run the alternatives business.
“Having undertaken a multi-year effort to rebuild BlackRock’s active equity capabilities, we are pleased with our progress and believe Mark can help us continue to drive meaningful results for clients," Kapito said in a statement.
Wiseman has filled various roles at Canada Pension including overseeing its public market, private and real estate investments, before being appointed CEO. He joined the pension board in 2005 after leading the private equity division at Ontario Teachers’ Pension Plan.
Gordon said Wiseman’s appointment “may raise questions in Canada about a revolving door and a potential conflict of interest between the Investment Board and BlackRock regarding future investments.”