Mark Wiseman Exits CPPIB for BlackRock | Chief Investment Officer

1_Profile_Mark Wiseman_EK_CB.jpg Mark Wiseman (Art by Chris Buzelli)BlackRock has appointed Canada Pension Plan Investment Board’s (CPPIB) Mark Wiseman to lead its $275 billion global active equities business.

Wiseman has worked at CPPIB for 11 years, latterly as president and CEO since 2012.

Mark Machin, currently senior managing director and head of international and CPPIB, has been appointed as Wiseman’s successor effective June 13. Wiseman is due to start at BlackRock in September.

“Leaving CPPIB was an extremely difficult decision and one that I deliberated over very carefully,” Wiseman in a statement released by the Canadian pension. “CPPIB is an exceptional institution on a long, strong path forward. I have every confidence in the senior management team and will watch with pride the successful delivery of CPPIB’s long-term global strategy. The opportunity to serve CPPIB for over a decade has been a great privilege. It will remain one of the greatest highlights of my career.”

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Wiseman added that he would work with Machin and the board as a senior adviser until September 5 to ensure a “smooth and successful transition” before his departure.

“Leaving CPPIB was an extremely difficult decision and one that I deliberated over very carefully.”“Having worked closely with Mark Machin for several years, I have complete confidence in his ability to assume this role without missing a beat,” Wiseman said. “I believe that Mark has all the skills to lead CPPIB through the next chapter of its evolution.”

Larry Fink, BlackRock chairman and CEO, said in a statement he was “thrilled to be bringing an executive of Mark’s stature.” Wiseman “is not only a best-in-class investor but also a great leader of investors. He has deep experience in both public and private capital markets globally—having worked with and driven strong investment results for some of the biggest and most sophisticated pools of investment capital in the world.”

Wiseman’s appointment follows a major reshuffle of senior staff at BlackRock, announced at the start of this year.

The restructuring combined the group’s fundamental active equity and scientific active equity groups into a “unified active equities platform,” at the time jointly led by Chris Jones, Nigel Bolton, Raffaele Savi, and Jeff Shen.

As well as leading this department, Wiseman will also become chairman of BlackRock Alternative Investors, which covers hedge funds, private equity, real assets, private credit, commodities, and “alternative solutions.” He will also chair the asset manager’s global investment committee.

Wiseman has been named in the top 10 of CIO’s Power 100 list of the most influential investors each of the past four years, twice ranking as number one.

Asset managers are raising cash levels in their portfolios and employing defensive trades ahead of a predicted “summer of shocks,” according to a survey by Bank of America Merrill Lynch (BoAML).

“Investors continue to hold elevated cash levels to protect against potential shocks from Brexit, China, and quantitative failure.”The global survey, carried out earlier this month, reported that investors had made major reductions to their UK exposures ahead of a public vote on the country’s membership of the European Union on June 23.

The average allocation to the UK has hit a low point not seen since 2008, BoAML said, as ‘Brexit’ was cited as the biggest tail risk by the 168 respondents. This is despite 71% of respondents saying they thought “unlikely” or “not at all likely” that the UK would vote to leave the EU.

“Although global growth expectations rose slightly from the previous month, investors continue to hold elevated cash levels to protect against potential shocks from Brexit, China, and quantitative failure,” said Michael Hartnett, chief investment strategist at BoAML.

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BoAML survey May 2016 The average cash balance from the managers surveyed reached 5.5%, BoAML reported. Similar stockpiles were last reported in 2012 at the height of the Greek debt crisis.

Managers also cited fears of devaluations or defaults in China as a serious tail risk to their portfolios, following a slump in Chinese economic output in 2015 and into the first quarter of 2016. Respondents predicted two interest rate hikes from the US Federal Reserve this year, and no move towards a “helicopter money” stimulus package—both seen as negative developments for equities.

These concerns drove investors into “defensive” sectors, the survey reported, including utilities and real estate companies. The majority of managers expected high-quality, high-dividend, and low-volatility stocks and strategies to outperform over the next 12 months. However, this area of the market was also cited as being the most crowded trade.

BoAML’s “risk and liquidity” index—a measure of how many respondents were taking more risk than usual—fell since April. A reading of 34, down from 36, was one of the lowest points since 2012.