Mark Wiedman, the BlackRock executive regarded as the top contender to succeed Larry Fink at the helm of the financial services group, has warned Brexit is causing big challenges for asset managers that operate on a global scale.
New York-based BlackRock, which manages more money than any other investment group in Europe, has taken steps to prepare for Britain’s divorce from the EU, including setting up a hub in Paris and seeking additional regulatory licences in Amsterdam.
But speaking at the Financial Times’ inaugural Future of Asset Management conference in New York last week, Mr Wiedman said the UK’s departure would cause the European financial system to become more fragmented.
“[BlackRock] is built on a global business model. What is becoming much less easy to do — at least as we foresee — is to actually implement that model globally,” he said. “Our European operations are centred around a single hub, we have a single operational model, a single set of funds. Post Brexit, that is going to be fractured.”
Last year the FT revealed that Paris had won the hotly contested battle to host BlackRock’s global office for its alternatives business, while the company later announced that it had received additional regulatory permissions for its Amsterdam office.
London remains BlackRock’s biggest operation within Europe, though the fund manager has opened a data and tech centre in Budapest with up to 500 staff.
“It’s not the exit of the UK that we are prepared for,” said Mr Wiedman. “It’s the fragmentation within the European Union with no dominant financial centre ready to check the efforts of each national actor to try to move jobs into its sector. That’s going to make it much harder for there to be a European common market in financial services.”
He added: “The single market is an unfulfilled dream and it is also slowly taking steps backwards behind the scenes. My concern about Brexit is not so much about the British leaving the EU, it’s having the notion of having an integrated financial market, which is critical to how we run, that starts to crack. That’s not good for us — it’s also not good for the Europeans.”
According to an index published by consultancy Z/Yen last week, London has fallen further behind New York as the leading global financial centre, with hubs in Paris and China on track to overtake London within two years.
Manny Roman, chief executive of Pimco, the largest bond fund manager with $1.7tn of assets, also spoke at the FT event. “I find it incredible that London, which clearly was giving New York a run for its money as the most important financial hub in the world, could be jeopardised by what I think is pure politics,” he said.
“There is an issue of competitive advantage. The UK was really, really good at financial services . . . It’s sad that it’s gone the other way.”
Mr Wiedman is a senior managing director at BlackRock, as well as head of its international business and corporate strategy. He is one of a small pool of executives who have been groomed by the company to eventually replace Mr Fink in the highest-profile job in global asset management.
But Mr Wiedman — who was elevated to his current role at that start of the year, having previously run BlackRock’s index and exchange traded fund business — is widely seen as the leading contender within the company.
