The changes mark a new vision for the group and reflect the credit market’s “dramatic and transformative” evolution, Rick Rieder, BlackRock’s chief investment officer of global fixed income, said in an internal memo seen by Bloomberg.
The move also underscores the growing clout of the private financing solutions group led by HPS’s top executives — a key business for the firm as it expands in private and alternative credit and competes with the likes of Blackstone Inc. and Apollo Global Management Inc.
BlackRock’s leveraged-finance business will remain under the stewardship of David Delbos and Mitch Garfin, but will be folded into the PFS business from global fixed income, according to the memo. The PFS franchise is overseen by Scott Kapnick, Scot French and Michael Patterson, the HPS leaders who completed the $12 billion sale of the private-credit specialist to BlackRock in July.
A representative for the company declined to comment.
It’s the latest move in a sweeping plan to re-wire BlackRock. Co-Founder and Chief Executive Officer Larry Fink is staking a big part of his company’s future on private markets and his ability to combine them with the public stock and bond strategies and ETFs that have powered the firm’s rise. BlackRock has spent billions to become a major player in alternative and private assets and data, and the HPS purchase turned it into a private-credit behemoth nearly overnight.
Rieder, who met last week with US Treasury Secretary Scott Bessent about the role of Federal Reserve chair, laid out new investment plans for BlackRock’s fixed-income group in the memo. It will build out core fixed-income portfolios and plans to develop a so-called core-plus-related solution that is “more powerful,” he said.
As part of the changes, Rieder said Russ Brownback will become deputy CIO of global fixed income. David Rogal, meanwhile, has informed the company that he intends to explore opportunities outside the firm, Rieder said. Bank of America Corp.’s David Koh will join BlackRock in a newly created role as chief investment strategist, he added.
Rieder’s group plans to start a fixed-income hedge fund dubbed TriaXial, he said. It also intends to develop a higher-income version of BINC, a popular active bond ETF with $12.3 billion in assets that Rieder manages. He is responsible for roughly $2.4 trillion in total, according to the firm’s website.
“Technology will be a significant part of the work,” said Rieder. “The ability to use AI, machine learning and new data” will help develop new tools to improve investment returns.
–With assistance from Laura Noonan and Jeremy Hill.
(Adds additional context beginning in paragraph six.)
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