Vanguard appoints ex-BlackRock executive Salim Ramji as new CEO

Key Takeaway

• Salim Ramji, ex-BlackRock executive, appointed as Vanguard's CEO to drive expansion and improve technology and advisory services.
• Aims to enhance Vanguard's global presence and tech infrastructure, leveraging his experience from BlackRock and international roles.
• Faces the challenge of integrating advancements while preserving Vanguard’s culture, amidst efforts to expand beyond 50 million customers.

Vanguard's New Leadership

Salim Ramji, a former senior executive at BlackRock, has been appointed as the new chief executive of Vanguard, marking the first time the $9.3 trillion asset manager has selected an outsider for its top position. Ramji, who has a rich background in strategy, wealth management, and ETFs from his time at BlackRock, aims to expand Vanguard's reach beyond its current 50 million customers. His appointment follows the retirement announcement of Tim Buckley, Vanguard's previous CEO. Ramji's vision includes scaling Vanguard's advisory offerings and improving its technology infrastructure, areas where the firm has faced challenges, particularly in international markets.

Strategic Expansion and Challenges

Under Ramji's leadership, Vanguard seeks to capitalize on its strengths in mutual funds and ETFs while addressing areas of growth such as wealth management and technological innovation. Despite being a dominant player in the US, Vanguard has lagged behind its main competitor, BlackRock, in global asset management and technological advancements. Ramji's experience at BlackRock, particularly with the iShares ETF and index business, positions him well to lead Vanguard's expansion efforts. However, he faces the challenge of maintaining Vanguard's unique culture and mission, deeply rooted in the principles of its founder, Jack Bogle.

Embracing Technology and Global Growth

Ramji's strategy for Vanguard emphasizes the importance of technology in asset and wealth management. His previous roles have equipped him with the experience necessary to enhance Vanguard's technological capabilities, which have been a point of contention among customers and counterparties. Additionally, Ramji's international experience, including his tenure at McKinsey and Clifford Chance, will be valuable as Vanguard aims to increase its global presence. The firm recently closed its Chinese joint venture and a German wealth platform, highlighting the need for a strategic approach to international expansion.

Street Views

• Daniel Sotiroff, Morningstar (Neutral on Vanguard):

  "It’s really that cultural element at the end of the day that is a big selling point. I think deviating from that would not be good, and I think maintaining that is going to be his biggest challenge."

• Andy Saperstein, Morgan Stanley (Bullish on Salim Ramji's leadership capabilities):

  "He doesn’t try to make something marginally better, [instead asking] what could we do differently that will have an impact."

• Ron O’Hanley, State Street (Bullish on Salim Ramji's potential at Vanguard):

  "He’s proved to be quite versatile and resilient at BlackRock ... He’s got an incredibly high IQ and high EQ."

Management Quotes

• Salim Ramji:

  "I really do believe that there can be millions more people who can benefit from what Vanguard has to offer."
  "The mission and purpose started by Bogle and continued by his successors will continue under my leadership. I plan to pursue that with the zeal of a convert."
  "Vanguard’s clarity and consistency of purpose is something I have long admired."
  "Technology is something that any leader of any wealth or asset management firm has to focus on. It’s something that I focused on as a top priority in each of the different roles I had."