Vanguard Group, the $9 trillion investment firm that employs 12,000 in Chester County, has named Salim Ramji as chief executive, reaching outside company ranks for the first time in its 49-year history.
Ramji, 53, has worked 25 years in the investment business, the last 10 at the only U.S. investment company bigger than Vanguard — New York-based BlackRock, which has back offices near Princeton and Wilmington. Ramji replaces Mortimer “Tim” Buckley, who, like his three predecessors, had worked for the late Vanguard founder John C. Bogle.
The new CEO faces a competitive investment market, where some of Vanguard’s historically low fund fees have been matched by rivals like Fidelity and Schwab, and money managers like Vanguard are feeling pressure to offer new products and advisory services to bring in more cash.
“The current investor landscape is changing, and that presents opportunities for Vanguard,” Ramji said in a statement. “My focus will be to mobilize Vanguard to meet the moment while staying true to that core purpose: remaining the trusted firm that takes a stand for all investors.”
Vanguard confirmed the appointment in a news release Tuesday evening. Buckley had announced in March that he would retire as CEO by year’s end.
Past presidents had been elevated to CEO, but this time Vanguard decided to conduct a wider search. Greg Davis, named Vanguard’s president in March, will stay in that job. He will retain his earlier post as chief investment officer and join the Vanguard board, the company said.
Ramji was head of BlackRock’s iShares and Index Investing Group, competing head-to-head against Vanguard’s top products, when he left BlackRock in January. He joined BlackRock from consultant McKinsey & Co., where he headed the asset management group.
At BlackRock, Ramji served on the top executive committee. At Vanguard he will join the board, along with Davis and another new member, John Murphy, chief financial officer at Coca-Cola, whose addition to the board follows the resignation of Deanna Mulligan, a retired insurance executive which leaves two women on the 12-member board. Vanguard did not say why Mulligan stepped down.
Born in Tanzania, in East Africa, Ramji holds a bachelor’s in economics and politics from the University of Toronto, then spent a year as a microlender “getting field experience” in the mountains of Pakistan, he told Wharton Fintech in a 2021 interview. He holds a law degree from Cambridge in England. He is also a chartered financial analyst (CFA), completing a complex set of tests certifying investment analysis.
“We have significant opportunities for growth ahead,” Mark Loughridge, a former IBM executive who is the leading non-Vanguard employee on the company’s board, said in a statement. “Vanguard has an important future, and we believe he is the best person for the job.”
In another change from past Vanguard practice, Loughridge will take over this summer as chairman of the Vanguard board that oversees company management.
In the past, that post had been held by the CEO, so that Buckley and his predecessors effectively reported to a governing board they also headed, a once-common practice at big U.S. financial and industrial companies that has been changing under pressure from corporate-governance reform advocates — though as a private, for-profit company Vanguard is largely shielded from activist shareholders.
Buckley said he knew Ramji from their service together on the top board of the Investment Company Institute, an industry lobby. In a statement, Buckley credited Ramji with strategic thinking and an understanding of Vanguard’s purpose.
“Ramji is one of a few people with experience running an asset manager as large as Vanguard that has seen [similarly] dramatic growth,” Jeff De Maso wrote in an email to subscribers of his Independent Vanguard Adviser newsletter.
The new leader’s outsider status “may be a positive,” as past CEOs have managed “in the shadow” of their founder Bogle, who popularized low-fee index stock funds, he said.
“Bogle deserves his cult following, but today’s Vanguard is more of a sprawling organization than an upstart,” De Maso added.
Vanguard’s Bogle-era culture, while still useful as a marketing tool, “has been changing already,” he said, as it sold off its small-business retirement accounts earlier this year to Dresher-based Ascensus, reversed a Bogle-imposed ban on the word product to describe Vanguard funds, and continues to boost some service fees.
“Everyone other one [Vanguard CEO] was internal star and former Bogle assistant,” Eric Balchunas, an analyst at Bloomberg, posted on his X feed, adding that he was in “semi-shock” at Ramji’s hiring.
Ramji’s appointment sparked immediate interest from crypto traders and watchers, who noted that Vanguard has resisted adding funds that bet on Bitcoin and other crypto currencies, while BlackRock embraced the speculative products.
Nate Geraci, a Kansas financial planner who has predicted BlackRock will gain exchange-traded fund market share from Vanguard this year, posted that it “will be interesting to see if Salim Ramji tries to help Vanguard investors gain access to crypto” as he did promoting crypto funds for BlackRock customers.
But Ramji promptly told Barron’s he has no plans to reverse Vanguard’s crypto ban, adding that he will lead the company to growth within its long-standing culture, “with the zeal of a convert.”
For its part, BlackRock hailed Ramji’s hiring in a statement early Wednesday: “We congratulate Salim on this accomplishment and thank him for his leadership at our firm. BlackRock is proud to have a track record of our firm’s alumni later going on to lead other investment management companies.” BlackRock alumni also run Wilshire, Northern Trust, Russell Investments, and other investment firms.
