Investment giant Vanguard Group Inc. said its chief executive officer, Tim Buckley, will retire by year-end after more than three decades at the company. 

The Valley Forge, Pennsylvania firm’s board has initiated a search process for its next CEO and will consider both internal and external candidates, according to a statement. Vanguard said Chief Investment Officer Greg Davis has been named president, a job he will hold in addition to his current responsibilities. 

“Thirty-three years ago, I was lucky to join a company that believed in giving investors a fair shake as they saved for retirement, for their kids’ college education, or for their dream home,” Buckley said in the statement. “In my seventh year as CEO, we have scaled our mission to more than 50 million investors, and our team is just getting started.”

Buckley has held the CEO post since 2018. Vanguard managed $8.7 trillion through the end of January.

The outgoing CEO’s biggest legacies include the firm’s push into becoming an adviser, and its growth in ETFs, Bloomberg Intelligence analyst Eric Balchunas said in an interview. The analyst said Buckley grew the company by $4 trillion, partly due to momentum built by Vanguard founder, the late Jack Bogle.

“He certainly was a good steward” of Bogle’s legacy, said Balchunas, who anticipated the firm will most likely hire from within. “They want someone with that Bogle blood.”

The firm said it’s looking at candidates both inside and outside Vanguard.

“Evaluating internal and external candidates for such a critical role reflects good governance, particularly for a firm of Vanguard’s scale and complexity, and the board will be considering both in its current process,” a Vanguard spokesperson said.

Index Boom

Vanguard has benefited from a decade-long boom in index investing, particularly in the US, as clients shifted toward the kind of cheap passive funds that the company has promoted. That move away from active funds with portfolio managers picking stocks and bonds has picked up, especially in ETFs — which Vanguard has expanded into as the second-largest US ETF issuer behind BlackRock Inc.

Buckley is the fourth CEO of a company founded by Bogle, who seized on the concept that a fund indexed to the broad stock market could be successful, cheap and marketed to the masses. Bogle, who died in 2019, was CEO of the firm from 1975 to 1995, and once the index fund took hold, it eventually led to plunging fees for many asset managers.

In more recent years, Vanguard has tried to expand into financial advisory businesses to cultivate new clients. It continues to offer some actively managed funds and has made limited inroads into the fast-growing markets for private assets. Vanguard said this month that since inception in 2020 its private equity program with HarbourVest has raised cumulative commitments from clients of more than $1.8 billion.

On the international front, the firm has aimed to carry its low-cost mission of investing to new countries, offering index funds and ETFs. In some areas it has pulled back, notably from its business in China.

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