LONDON/ZURICH (Reuters) - Philipp Hildebrand, who quit as chairman of the Swiss central bank in January over a currency trading scandal, is joining BlackRock (BLK.N) to nurture the world’s largest money manager’s major client relationships and reinforce its role as a financial crisis troubleshooter.
The appointment reflects BlackRock’s ambition to raise its profile in Europe’s fragmented funds industry, where it competes with scores of firms that have a tight hold on their domestic markets via relationships with local banks.
It also fits with the New York-based investment house’s efforts to forge a reputation for advising governments and regulators, a role often played by big investment banks such as Morgan Stanley (MS.N) and Goldman Sachs (GS.N).
Since the euro zone crisis erupted, BlackRock has advised policymakers on the restructuring of Irish and Greek sovereign debt, echoing its work with the U.S. Federal Reserve following the collapse of insurer AIG.
Supremely well connected among policymakers and bankers, Hildebrand’s appointment is expected to aid BlackRock’s expansion in this lucrative line of business.
He was appointed vice chairman of the Financial Stability Board, the regulatory task force for the Group of 20 economies, just months before the scandal broke. He also relinquished that post upon leaving the SNB.
BlackRock is not the first fund manager to sign up an ex-central banker. Five years ago, Allianz AG’s (ALVG.DE) Pacific Investment Management Co (Pimco) hired former U.S. Federal Reserve chairman Alan Greenspan as a consultant on economic issues.
In his new job, Hildebrand will be based in BlackRock’s offices in London and will take charge of the firm’s largest institutional client relationships in Europe, the Middle East, Africa and Asia Pacific from October.
He will lead a small team of existing BlackRock staff and a number of new hires that will focus on guiding major clients on investment against a backdrop of uncertain central bank policy, political change and turbulent global markets.
“He will contribute a unique perspective on global markets and economic trends to BlackRock’s investment teams and also represent the firm to senior government officials and regulators across EMEA and Asia Pacific,” BlackRock said in a statement.
Hildebrand resigned from the Swiss National Bank (SNB) after he failed to prove he had not been involved in lucrative currency trades by his wife, Kashya, just weeks before he oversaw the introduction of a cap on the Swiss franc’s value.
The former Moore Capital hedge fund manager, who controlled his own portfolio while at the SNB, was later found not to have broken the central bank’s old rules, which were tightened up after the scandal.
He joined the SNB in 2003, rising to chairman in 2010, and won praise for helping to orchestrate the 2008 bailout of UBS UBSN.VX, which prompted tougher Swiss banking regulations.
Since March, he has been a visiting fellow at the Blavatnik School of Government at Oxford University - where he studied at Lincoln College and received his doctorate in international relations in 1994.
Hildebrand made his first public appearance in Switzerland since the scandal last week at an economic conference, where he discussed the euro zone crisis and the urgent need to stabilize the European banking system.
His latest move marks a return to the private sector, where he began his career before becoming a central banker. Before the SNB, Hildebrand worked as chief investment officer at Swiss banks Union Bancaire Privee in Geneva and Vontobel in Zurich.
BlackRock, founded more than 20 years ago as a one-room bond investment firm, has become the world’s largest publicly traded asset manager through a series of acquisitions, led by Chairman and Chief Executive Larry Fink. It has around $3.7 trillion in assets.
Shares in BlackRock, valued at $30 billion, have slipped 3 percent so far this year, underperforming a 3 percent gain on the Dow Jones industrial average .DJI.
Reporting by Jochelle Mendonca, Emma Thomasson and Sinead Cruise; Writing by Ian Geoghegan; Editing by Himani Sarkar, Neil Fullick and Jane Merriman