Paving the Way to the S&P 500

By the time Ann Marie Petach joined BlackRock as its CFO in 2008, she had already amassed deep finance know-how after more than two decades at Ford Motor Co. "Given the complexity of the international business model, [Ford] was just a great training ground," Petach says. "What Ford does for people, and for me over a span of 23 years, is offer a very diverse set of experiences that really expand you as a global finance professional."

Over the course of her career at Ford, Petach spent three years in Brazil working on a joint venture with Volkswagen and two years in Portugal working on a separate start-up joint venture. And once she was appointed Ford's treasurer in 2004, Petach oversaw currency and commodity hedging, ran funding for Ford and its finance subsidiary, Ford Credit, and managed the company's pension funds, which at the time had liabilities of $70 billion. "You get an intimate understanding of how the financial markets work, but you get it from an insider's perspective," she says.

Petach arrived at New York-based BlackRock, which had $3.56 trillion in assets at the end of 2010, as the investment management and risk advisory company embarked on an ambitious growth trajectory following its 2006 acquisition of Merrill Lynch Investment Managers. "I saw it as an opportunity to help build out a larger-company finance department from a smaller finance department," she says.

Soon after her arrival, the financial crisis began to worsen. Despite a hit to BlackRock's revenue, as Petach explains it, the company's relatively small size and business model helped buffer it from the pain that many on Wall Street were experiencing.

"We are a services company and our key assets are the people here," she says. "And that's a terrific business model.

"Even when the economy was going through a crisis, we maintained more stable revenues and actually grew our risk advisory revenues," Petach adds. "We earn money by charging basis points on assets under management. The fees do go down as those assets go down, but we have a very diversified business model, so only a portion are linked to equities and the rest is in cash, fixed-income and alternatives. You are making a good margin even in crisis, if you are managing your cost basis appropriately."

Having gotten through the worst of the crisis, BlackRock's senior team was able to consider opportunities. They found one in 2009, when U.K.-based Barclays put its Barclays Global Investors (BGI) unit on the block. With its costs under control and the crisis contained, BlackRock's share price remained relatively strong. "We knew we had a strong currency, liquidity, and creditworthiness such that we could finance something like this," Petach says.

As the $13 billion BGI acquisition moved forward, Petach lost no time in integrating the two finance groups. "We worked so closely together in finance pre-close that on the first day when we closed, we were on a single GL system," she says. "One GL system the day of close." More recently, Petach is working with others to expand the company's investor relations capabilities in the wake of BlackRock's secondary stock offering in late 2010, which expanded its public float from around 20% to over 50%, paving the way for the company's inclusion this month in the S&P 500.

Looking back, Petach says one reason she was interested in joining BlackRock was the fact that two of its four founding partners were women, Susan Wagner and Barbara Novick, who are both now vice chairs. Now BlackRock's senior management is putting more processes in place to help women advance their careers. The new program, the Women's Initiative Network, helps create opportunities for women to meet and support each other.

"I arrived here excited just because of the senior-woman influence inherent in the firm from the beginning," says Petach. "But now I think we're going to take it to a whole new level by really institutionalizing and formalizing what we're doing and making it not a woman's commitment but a firm commitment."

 

See the complete coverage of Treasury & Risk's 2011 Women in Finance list here.

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