US- Officials at iShares are making plans to fill vacant key roles and potentially shuffle its non-US personnel, as it breaks away from parent company Barclays and positions itself for overseas growth.
Tobin told Global Pensions he and global co-chief executive Mike Latham "will spend time evaluating the organisational structure and how we will position the team."
However, no changes will be made until the 'go-shop provision' has passed, a clause in the sale that allows other bidders to make offers for the business for the next 45 days. Barclays will begin accepting competing bids tomorrow.
On Thursday, Barclays announced the sale of iShares for $4.4bn to private equity firm CVC Capital Partners, as it moved to raise cash and avoid joining the UK government's asset protection scheme. The deal is expected to close in the fourth quarter of 2009. (Global Pensions, 4 April 2009)
Tobin says the portfolio management team will remain intact, particularly in the US. "On the investment side, the transfer of the portfolio management and trading is dependent on location. We're moving the entire portfolio management team in the US to the iShares business from the start."
"In other geographies, we'd need to explore (potential changes)," he says. Tobin said the firm's non-US offices are well positioned to continue running, but that some changes may need to be made as he and Latham evaluate the firm's position going forward.
iShares has plans to grow its non-US business, particularly in Europe, Latin America and the Middle East where it does not currently have a strong foothold. These plans were in place before the firm's sale to CVC and will not be slowed by the change of ownership, Tobin says.
iShares also plans to expand its client base. Tobin says: "The focus outside the US has been mainly institutional. Going forward, we'll explore the intermediary markets." He adds officials will target independent financial advisers and other intermediaries that work with high-net-worth individuals.
In the US, iShares will branch out into the pension fund market, a segment it had not pushed into because of "legacy issues". Tobin says Barclays' main focus was on winning mandates in the US instead of the ETF business.
The biggest short-term challenge going forward is the shop-around clause, where a new owner may ultimately emerge. "The 45-day go-shop provision is a question mark," says Tobin.
He adds that officials are preparing for a CVC ownership structure "and are planning our internal work stream with this in mind."
How hands-on CVC will be remains to be seen and the private equity firm has reportedly considered an eventual initial public offering (IPO). Officials at CVC could not comment before press time.
Tobin says CVC will look at a number of exit strategies, whether that be an IPO, strategic partnership or other moves. But, he says, the changes to the firm will not specifically be done with an eye towards an IPO.
"These changes are about positioning us to be an independent company first and foremost," says Tobin.
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