BlackRock Hires Barclays’s Knapp for New Fixed Income Team

Apr 08, 2014 1:43 pm ET

(Adds background on market calls in sixth paragraph)

April 8 (Bloomberg) -- BlackRock Inc., the world’s largest money manager, hired Barry Knapp from Barclays Plc to oversee a new strategies team for its active bond unit.

Knapp, 52, who was head of U.S. equity portfolio strategy for the London-based bank, will join the money manager later this year to lead and build the thematic strategies team, according to a memo sent to employees today by New York-based BlackRock. The group will focus on major structural themes, identify investing opportunities and figure out ways to capture them, according to the memo.

BlackRock, which oversees $4.3 trillion in assets, revamped its bond unit in 2012 after performance at funds trailed peers, giving unit heads Rick Rieder and Kevin Holt greater autonomy and accountability. In 2013, BlackRock’s active bond strategies attracted $10.4 billion as fixed-income competitors such as Pacific Investment Management Co. faced redemptions amid fears of rising interest rates.

“Having somebody with his experience in this type of environment where rates are expected to be on the rise certainly doesn’t hurt,” Robert Pavlik, chief market strategist at Banyan Partners LLC, which manages $4.5 billion, said in an interview. “He brings a line of thinking that can certainly fit in, and he might also bring in a different perspective.”

Lehman Collapse

Before joining Barclays five years ago, Knapp worked at Lehman Brothers Holdings Inc. for 19 years in a variety of roles, including head of U.S. portfolio strategy. At BlackRock, he will report to Rieder, chief investment officer of fundamental fixed income and co-head of Americas fixed income, who worked at Lehman for 21 years. CNBC reported the news of his hire earlier today.

At Barclays, Knapp was bullish at the start of the last three years, forecasting an annual Standard & Poor’s 500 Index increase of 8.5 percent on average, according to data compiled by Bloomberg. He was alone among strategists at the biggest Wall Street firms in predicting a retreat at the start of 2009. The benchmark gauge dropped to a 12-year low by March that year.

Knapp was promoted to chief stock strategist four months before the collapse of Lehman in September 2008. He moved to Barclays when the bank bought his unit and put him in charge of U.S. equity strategy. Before the appointment, he was a trader on Lehman’s prop desk where he bet the securities firm’s capital on stocks and bonds.

Soccer Player

Knapp attended the University of Rhode Island on a soccer scholarship and aimed at a professional career in the sport -- until the North American Soccer League collapsed in 1984, the year he graduated.

The midfielder fell back on his economics and finance degree, landing jobs at Merrill Lynch & Co. in New York and Boston-based Fidelity Investments while pursuing a Master of Business Administration from Fordham University at night. He joined Lehman in 1989 to sell equity derivatives.

Last month, Thomas Lee, the former chief equity strategist at JPMorgan Chase & Co., left the firm after holding the job since 2007. Lee intended to take time away from work, according to a memo sent to employees.

Erica Chase, a spokeswoman for Barclays in New York, confirmed Knapp’s departure but could not provide details around his end date.

“We wish Barry all the best in his new role,” according to a statement from the firm.