Vanguard’s board of directors says Chief Investment Officer Tim Buckley will take the reins from CEO Bill McNabb on Jan. 1. Effective immediately, Buckley will be the fund family’s president and director.
Buckley, 48, will be the firm’s fourth CEO since its founding in 1975. McNabb, 60, has been in the CEO slot since 2008 and will remain the group’s chairman. Greg Davis, 46, head of Vanguard’s Fixed Income Group, will be chief investment officer.
“As the firm continues to grow, evolve and expand globally, it is the right time for a new leader and the board is unanimous in its belief that Tim Buckley is the ideal next chief executive for Vanguard,” McNabb said in a statement.
“I have worked alongside Tim for many years and he brings a strong passion for serving Vanguard clients and crew, a global mindset, and significant leadership experience in all facets of our operations,” he added.
Fund analysts say the news is not entirely surprising.
“It’s not a shock. The timing seems pretty logical, given McNabb’s age, and the time he’s been in the position,” said Kevin McDevitt, Morningstar’s lead analyst on Vanguard funds, in an interview with ThinkAdvisor.
McNabb took on the CEO role during the financial crisis, “which was one of the most stressful market environments in a generation or two,” explained McDevitt, “and he himself has said this time is the equivalent of adding several years to his tenure.”
As for the new CEO, “Tim Buckley is ready,” according to the analyst.
Buckley joined Vanguard in 1991 as an assistant to then Chairman John C. Bogle. He was elected as a principal of the firm in 1998 and served as chief information officer and head of Vanguard’s Information Technology Division from 2001 to 2006 and head of Vanguard’s Retail Investor Group from 2006 to 2012.
“This information and technology management experience will serve him well," since Vanguard relies on technology "and huge scale" to keep its costs low, McDevitt says. "That experience will be important for them going forward.”
As for Buckley’s personality, “He is more like McNabb than Bogle,” the analyst said. “There is never going to be another Bogle, who is an original. He was right for the firm [when he led it] and continues to be an investor advocate.”
Overall, given that Buckley worked as Bogle’s assistant and that he has been at Vanguard for his entire career, “There should be tremendous continuity in the firm’s culture," according to McDevitt.
As of June 30, Vanguard managed $4.4 trillion in global assets. It sells 369 funds to more than 20 million investors worldwide.
“Vanguard’s mutual structure and client-focused culture serve as the foundation for everything we do, and I am honored to lead this great organization into its next chapter,” said Buckley in a statement.
“Thanks to Bill’s strong leadership over the past 10 years, Vanguard is well-positioned to continue helping clients achieve investment success. I look forward to continuing to work closely with Bill over the next six months as I transition to my new role,” he added.
McNabb joined Vanguard in 1986 and became head of Vanguard’s Institutional Investor Group in 1995. He was named CEO in 2008 and chairman in 2009.