BLACKROCK, INC. 
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But as Chief Executive Laurence Fink shifts the company's focus from being an acquirer to operating its businesses, some industry executives, analysts and even employees say BlackRock lacks a clear strategy. Fink has said the firm is done with large acquisitions for now, but has offered little on how it will improve its funds' middling performance.
A recent spate of high-level departures, one tinged with controversy, and rumors that Fink may leave to take the post of U.S. Treasury Secretary if it is offered to him, have only increased concern about BlackRock's direction and who will lead it.
More changes in the senior ranks are in the works, including possible new departures, according to people familiar with the situation. The board also is discussing succession planning in case Fink leaves, the sources said.
"I would assume that there is a plan internally, but it is hard to see what it is from the outside," said Geoff Bobroff, a fund consultant based in East Greenwich, Rhode Island.
BlackRock declined to make any executives available for comment for this article. The firm would not comment on its business or talk in detail about its succession plans, but said its board is always focused on talent.
BlackRock's business is hardly in trouble. It manages $3.68 trillion in assets and dominates much of the investment industry. It is the world's largest provider of exchange-traded funds, and among the biggest asset managers globally. Many on Wall Street profess faith in Fink, who helped found the firm in 1988 and is its controlling force.
BlackRock also has a number of seasoned executives under Fink. President Robert Kapito is Fink's heir apparent, according to three people familiar with the situation.
BlackRock is so large that U.S. regulators are considering whether it should be deemed too big to fail, like its rival PIMCO, and receive tighter regulatory oversight.
Regulators worry that BlackRock manages so much money for pension funds that it could hammer the economy if it ever went under. The New York-based firm has lobbied hard to fend off the "systemically important" designation.
LAGGING PERFORMANCE
But for all its size and stature, the firm's fund results are far from industry leaders.
Most of its investment funds have failed to match the performance of their competitors at other companies over the past five years, according to Morningstar.
Last year, BlackRock attracted little new money from investors. And its financial performance has slowed.
In June, amid news of the executive departures, BlackRock shares fell 0.6 percent while the Dow Jones U.S. Asset Managers Index rose 6.5 percent.
One foundation manager said he would not put money with BlackRock because its size makes it hard to manage money well.
"BlackRock is currently not firing on all cylinders," said Chris Spahr, an analyst at CLSA. He has an "underperform" rating on the firm although he thinks it is strong at its core.
"What is good is not good enough and what is bad is worse than it should be," Spahr said referring to BlackRock's funds, which overall are average.
The weakness has prompted some observers to say Fink needs new people to handle operations or he should cede more control to Kapito, a BlackRock co-founder, and others.
"For years every decision, from should we buy a company to picking the wine for the managing director dinner," was made by Fink and co-founders Sue Wagner, Ralph Schlosstein and Barbara Novick, said a person familiar with the situation.
CHANGES AT THE TOP
BlackRock has recently added to its management ranks. Former Swiss central bank Chairman Philipp Hildebrand has joined as a vice chairman focused on non-U.S. institutional clients. Mark McCombe, who was CEO in Hong Kong for HSBC, also came on board as BlackRock's chairman for Asia-Pacific.
At the same time, a number of longtime senior executives have left or announced they are leaving.
In June, BlackRock announced that Bob Doll, its high-profile chief equity strategist, was retiring. The funds he managed had underperformed their competitors for years, and Reuters disclosed that Doll had used outside models to pick stocks. BlackRock had previously said the picks were his own.
Wagner, who served as chief operating officer and vice chairman, announced in June that she was retiring from the firm. She will join the board.
Robert Capaldi, who served as senior client strategist for Fink, also left in June. His position is not being filled.
Also in June, BlackRock said portfolio manager Daniel Rice was leaving following disclosures that the energy funds he co-managed invested in businesses in which his family had stakes.
The potential conflict of interest, which emerged in news reports, raised questions about whether the firm can effectively oversee its massive operations.
Some of BlackRock's client relationship managers said they were upset at not having talking points to reassure clients after Rice's departure.
"The Rice situation is deeply disappointing," said Harry Milling, an analyst who covers BlackRock for Morningstar. "One can only wonder whether this raises questions in investor minds about what else might be going on."
BlackRock has said the departures are unrelated to one another.
Given the scale and complexity of BlackRock's business, and particularly with the recent headlines, analysts said they want to hear more from the other business heads.
"I haven't gotten exposure to senior managers there to get a sense of who is capable of what," said Jason Weyeneth, a senior research analyst with Sterne Agee, based in Birmingham, Alabama. "The firm needs to do a better job of showing their bench strength."
Some wonder if adopting a co-chief or heir apparent structure similar to PIMCO's might be a better model for BlackRock, given its size. And if Kapito is in fact the heir apparent, the firm might be well served by getting that message out more.
"It's all about Larry," said a former chief executive of a fund company, who declined to be identified because he did not want to be on Fink's bad side. "If I were him, I would want people to see another face."
(Reporting By Jessica Toonkel; additional reporting by Jennifer Ablan; Editing by Jennifer Merritt, Alwyn Scott and John Wallace)
By Jessica Toonkel
