U.S. News

Hildebrand Taking Up Key Role at Blackrock

Michael Mackenzie in New York

Philipp Hildebrand, the former chairman of the Swiss National Bank, is joining BlackRock as vice-chairman and will oversee the firm’s largest institutional client relationships outside of the U.S.

BlackRock headquarters
Mark Lennihan

The move to the world’s largest money manager marks Mr Hildebrand’s active return to finance after his resignation in January as chairman of the Swiss central bank after a series of controversial currency trades by his wife.

It also highlights BlackRock’s growing ambitions and clout in the financial system, as the group responds to the recent financial crisis to expand.

BlackRock has leapt ahead of many rivals in recent years to become the world’s largest asset manager, with some $3.68 trillion of assets. It has become a key adviser for governments and private sector companies in managing distressed assets.

It is involved, for example, in the Federal Reserve’s management of AIG assets and more recently has helped the Greek and Irish governments to value their assets.

This expansion has left BlackRock keen to attract more policy making and political expertise. The group already has several former government officials working for its operations in America, including Peter Fisher, a former U.S. Treasury undersecretary and senior figure at the New York Federal Reserve.

However, the appointment of Mr Hildebrand marks the first time that BlackRock has employed a former European government official of this rank.

Paul Volcker, a former Fed chairman, told the FT he had great respect for Mr Hildebrand: “He is a real leader. I always found his comments to be very wise. He was a breath of fresh air in central banking.”

Martin Feldstein, professor of economics at Harvard University and who has known Mr Hildebrand for many years, said he brings deep knowledge and experience of markets and economics, together with expertise in public and regulatory policy for BlackRock’s clients.

The company on Tuesday said that Mr Hildebrand’s role would be to deal with large clients in the Europe, Middle East, Africa and Asia, rather than handle government or political affairs. He will be based in London and will report directly to Laurence Fink, chairman and chief executive officer at BlackRock, when he starts in October.

“Few leaders are as widely respected for their expertise, judgment and integrity as Philipp Hildebrand,” said Mr Fink in a statement.

Mr Hildebrand earlier worked as chief investment officer at Union Bancaire Privée and the Vontobel Group, while before that he was a partner at Moore Capital Management.

After joining the SNB in 2003 as a member of its governing board, Mr Hildebrand departed in the wake of his wife’s execution of controversial currency trades before Switzerland imposed a ceiling on the appreciating Swiss franc last August that weakened the currency.

Friends of Mr Hildebrand and other senior Swiss figures complain that the scandal was driven by political opponents, who were angry about his radical measures to weaken the Swiss franc and impose tough new rules on the Swiss banks. Internal SNB committees subsequently cleared Hildebrand of wrongdoing.

However, critics of Mr Hildebrand argue that he was inappropriate for the job, not least because many Swiss politicians are uneasy about putting private sector financiers into public sector roles.

Additional reporting by Gillian Tett