Investment juggernaut BlackRock’s plans for its alternatives business remain unchanged following the termination of global head of active equities Mark Wiseman for failing to disclose a workplace relationship, the firm has said.
Wiseman joined BlackRock in September 2016 from the Canada Pension Plan Investment Board, where he was president and chief executive, and was brought in to head the global active equity business and oversee a team responsible for investing what was at the time more than $275 billion in equity-based strategies.
BlackRock is in market with its Long Term Private Capital fund, which is seeking as much as $12 billion and will have the capacity to hold companies “up to forever”, Wiseman told Institutional Investor in May. At least $2.75 billion has been raised for the vehicle so far, according to PEI data.
In an internal memo sent to BlackRock staff and obtained by Private Equity International, chief executive Laurence Fink and president Robert Kapito said Wiseman’s violation of the company’s Relationships at Work policy had “no impact on any portfolios or client activities”.
“It is deeply disappointing that two senior executives have departed the firm in the same year because of their personal conduct,” the firm leaders wrote, referring to the departure of the head of the human resources group Jeff Smith in the summer, reportedly because “he failed to adhere to company policy”.
“This is not who BlackRock is. This is not our culture. We expect every employee to uphold the highest standards of behavior. This is especially critical for our senior leaders.”
In a separate memo, Wiseman said that in recent months he “engaged in a consensual relationship with one of our colleagues without reporting it as required by BlackRock’s Relationships at Work Policy”.
“I regret my mistake and I accept responsibility for my actions.”
Wiseman added he is “committed to doing everything I can to ensure an orderly transition”.
Fink and Kapito wrote there are “no changes in our alternatives business”, with global head of BlackRock Alternative Investors Edwin Conway and BAI chief investment officer Jim Barry continuing to “oversee all aspects of the business”.
Conway will continue to report to Kapito, while the leaders of the active equity teams who previously reported to Wiseman will report to Kapito “as we assess the best leadership structure to continue to drive the business forward”.
In July 2018 BlackRock hired Goldman Sachs Asset Management managing directors Steve Lessar and Konnin Tam to lead a push into the secondaries market. The firm’s debut fund is set to come to market in 2020 with a target of $1.5 billion, Secondaries Investor reported.
BlackRock’s assets under management hit $6.96 trillion as of 30 September. On the firm’s third-quarter earnings call, Fink reiterated that alternatives is “a strategic priority for BlackRock”.
“We have raised a total of $46 billion in the last three years and nearly doubled our illiquid alternative platform to $92 billion in AUM and dry powder today. Demand for private markets remain strong as clients seek longer duration, higher returns, and eFront further strengthens our illiquid alternatives and will support growth over time,” Fink said, referring to the firm’s acquisition of alternatives risk management platform eFront this year.
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