Vanguard says chief Tim Buckley will leave $9tn asset manager this year

Vanguard chief executive Tim Buckley is stepping down at the end of this year after six years, following a period of rapid growth that included the $9tn asset manager coming under fire for its stance on climate change.

The world’s second-largest money manager said it planned to consider internal and external candidates to replace Buckley, a 33-year veteran, who led Vanguard’s efforts to expand overseas and in the provision of financial advice.

The Pennsylvania-based group, best known for its low-cost index funds and retirement plan offerings, also said it had elevated chief investment officer Greg Davis to an expanded role as president, effective immediately.

Davis will continue to run investment management and will pick up responsibility for Vanguard’s retirement business and the arm that serves professional financial advisers.

Under Buckley, Vanguard’s reach expanded to more than 50mn clients and assets under management rose 80 per cent. The group has been slowly chipping away at BlackRock’s lead in US exchange traded funds, currently one of the hottest parts of the asset management industry.

However, it has come under criticism from progressives for pulling out of one of the highest-profile climate alliances, and faced allegations of greenwashing from Australian regulators. In the US, it and fellow index fund providers BlackRock and State Street have come under scrutiny from the left and right for the influence they wield by holding large stakes in most American public companies.

Buckley initially joined Vanguard as a research assistant to Jack Bogle, the group’s founder, who pioneered passive investing and the company’s unusual mutual structure. This has enabled the company to shake up the asset management industry by reinvesting profits into lowering the fees charged to investors and putting pressure on rivals to do the same.

Buckley eventually served as CIO and then president before becoming the firm’s fourth CEO.

Mark Loughridge, Vanguard’s lead independent director, praised Buckley for leading the group through “a period of unprecedented innovation, growth, and transformation, building high-value-added services and businesses and expanding our advice offers”.

Davis, who was born in Germany to a US military family, joined Vanguard’s bond indexing team 24 years ago, and has been CIO since 2017.