Vanguard CIO Sauter to Retire at Year End

The fund shop taps Tim Buckley as his future replacement

Vanguard said Chief Investment Officer Gus Sauter (left) will retire on Dec. 31, when he will be replaced by Tim Buckley. Sauter, 57, joined Vanguard in 1987 and is head of the firm’s global investment management groups, which oversee about $1.6 trillion of Vanguard’s $2.1 trillion in global assets.

“Under his leadership, Vanguard has emerged as a world-class investment management firm with an unparalleled record of accomplishment,” said Vanguard CEO Bill McNabb, in a press release. “And it is equally important to acknowledge Gus for his contributions as a member of Vanguard’s senior staff; the entire enterprise has greatly benefited from his values, judgment, investment acumen, and ability to identify and develop the best investment talent in the industry.”

Buckley, 43, is currently a managing director. He has been a member of Vanguard’s senior staff since 2001 and has directed Vanguard’s Retail Investor Group, which has about 5 million investor clients, since 2006.

The future CIO joined Vanguard in 1991 as assistant to then-Chairman John C. Bogle. He is also a long-tenured member of Vanguard’s Portfolio Review Group, which includes nine executives.

“Tim Buckley has a strong commitment to the Vanguard way of investing, a keen intellect, and a passion for serving Vanguard clients,” said McNabb. “He will inherit a deep, talented group of more than 300 highly experienced equity, fixed income, risk management, and investment strategy professionals who oversee Vanguard portfolios on behalf of clients around the globe.”

Career Highlights

Sauter joined Vanguard as head of the firm’s internal equity management group on October 5, 1987, two weeks before that year’s market crash, in which stocks declined more than 22% in a single day. At that time, Vanguard says, it offered just two index funds—Vanguard 500 Index Fund and Vanguard Total Bond Market Index Fund, with aggregate assets of $1.2 billion.

The fund group introduced its Vanguard Extended Market Index Fund in December 1987 and, in subsequent years, Sauter worked to further expand its index lineup. Today, Vanguard manages more than $1.1 trillion in total index assets.

Sauter was also responsible for developing Vanguard’s active quantitative equity strategies, which now includes 15 domestic active portfolios totaling $12.1 billion.

Seeking to broaden the acceptance and use of index funds, Sauter led Vanguard’s foray into exchange-traded funds (ETFs). He helped develop a structure through which ETFs are offered as a separate share class of existing Vanguard index funds. Vanguard now offers 64 ETFs with nearly $200 billion in aggregate assets.

Sauter was named Vanguard’s first chief investment officer in 2003, assuming responsibility for all in-house stock and fixed-income management functions. In recent years, he has focused on integrating Vanguard’s global investment management capabilities to support the company’s expansion in Australia, the Pacific Rim, the U.K, Canada and Europe.

“I look back with a mixture of pride and humility on helping to popularize the indexing concept. I am also grateful for being associated with Vanguard for nearly my entire career, for it is an organization that truly stands alone in putting the interests of its clients first and giving them the best chance for investment success,” said Sauter, in a statement.

“It is time to pass the baton to a new leader who can further build upon our strong investment management foundation. Tim Buckley is the right choice for Vanguard and for our clients,” added the CIO, who is considering a number of activities after he retires, such as teaching.

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