Lee Kranefuss
Encyclopedia
Lee Thomas Kranefuss is an American businessman, investment manager, corporate adviser and entrepreneur.
Kranefuss started and ran the iShares
series of exchange-traded funds (ETFs) for Barclays Global Investors (BGI), the asset management arm of Britain’s Barclays Bank. BGI was acquired by BlackRock
in December 2009. Kranefuss saw the opportunity to commercialize and grow the extant but immaterial ETF industry that had developed by the time iShares
was launched in 2000, and is credited with driving ETFs from a novelty product to a mainstream investment choice through aggressive education and promotion of the iShares
line. By the end of 2009, global ETF assets exceeded a trillion dollars globally, with nearly half the total in the iShares funds.
In that role Kranefuss conceived of the plan for the iShares business. Believing that an aggressive education and sales program would be needed to explain the benefits of ETFs to investors, iShares
was launched in 2000 with an intensive marketing effort behind the initial 40 new iShares
funds to be launched in the U.S. — more than doubling the number of products then available in the market.
In 2005, after the departure of co-CEO Andrew Skirton, Kranefuss was promoted to the Executive Committee of BGI, and also put in charge of BGI’s Institutional Indexing, Cash Management, Securities Lending, and related businesses – collectively over one trillion dollars in assets, more than 75% of BGI’s assets under management, and 42% of the company’s profits. By the end of 2007 iShares had surpassed $400B in global assets, with Kranefuss overseeing nearly 80% of BGI’s assets and over 60% of BGI’s profits.
firm CVC Capital Partners
for $4.4B. Kranefuss announced at the time he would be stepping away from daily management duties to assume the title of Vice Chairman of iShares, focusing on the transition process. However, during a go-shop period in the CVC contract, Barclays reportedly received significant interest to buy all of BGI — including iShares — by numerous parties. Subsequently, New York money manager BlackRock
out-bid all others and purchased BGI, closing the deal in late in the year.
Though having grown iShares by extensive distribution over the decade — into a global fund family with over $500B in assets, and the 4th largest fund family in the U.S. — it was reported in early 2010 that Kranefuss (on reportedly good terms with BlackRock
senior management) would continue only through an integration period. He left BlackRock
at the end of April 2010.
Kranefuss also has an active interest in corporate sustainability, and has invested in that area. He appeared at the 2010 Fortune Brainstorm Green conference tto talk about that.
. He lives in the San Francisco Bay area
in Marin County
.
Kranefuss started and ran the iShares
IShares
iShares are a family of exchange-traded funds managed by BlackRock. The first iShares were known as WEBS but were since rebranded.Each iShares fund tracks a bond or stock market index...
series of exchange-traded funds (ETFs) for Barclays Global Investors (BGI), the asset management arm of Britain’s Barclays Bank. BGI was acquired by BlackRock
BlackRock
BlackRock, Inc. is an American multinational investment management corporation and the world's largest asset manager. BlackRock is headquartered in Manhattan, New York City, New York, United States and is the leading provider of investment, advisory, and risk management solutions...
in December 2009. Kranefuss saw the opportunity to commercialize and grow the extant but immaterial ETF industry that had developed by the time iShares
IShares
iShares are a family of exchange-traded funds managed by BlackRock. The first iShares were known as WEBS but were since rebranded.Each iShares fund tracks a bond or stock market index...
was launched in 2000, and is credited with driving ETFs from a novelty product to a mainstream investment choice through aggressive education and promotion of the iShares
IShares
iShares are a family of exchange-traded funds managed by BlackRock. The first iShares were known as WEBS but were since rebranded.Each iShares fund tracks a bond or stock market index...
line. By the end of 2009, global ETF assets exceeded a trillion dollars globally, with nearly half the total in the iShares funds.
Career
In 1997 Kranefuss joined Barclays Global Investors (BGI), the company that invented index funds. BGI was then the world’s largest manager of institutional assets. Kranefuss joined as Director of Strategy & Corporate Development.In that role Kranefuss conceived of the plan for the iShares business. Believing that an aggressive education and sales program would be needed to explain the benefits of ETFs to investors, iShares
IShares
iShares are a family of exchange-traded funds managed by BlackRock. The first iShares were known as WEBS but were since rebranded.Each iShares fund tracks a bond or stock market index...
was launched in 2000 with an intensive marketing effort behind the initial 40 new iShares
IShares
iShares are a family of exchange-traded funds managed by BlackRock. The first iShares were known as WEBS but were since rebranded.Each iShares fund tracks a bond or stock market index...
funds to be launched in the U.S. — more than doubling the number of products then available in the market.
In 2005, after the departure of co-CEO Andrew Skirton, Kranefuss was promoted to the Executive Committee of BGI, and also put in charge of BGI’s Institutional Indexing, Cash Management, Securities Lending, and related businesses – collectively over one trillion dollars in assets, more than 75% of BGI’s assets under management, and 42% of the company’s profits. By the end of 2007 iShares had surpassed $400B in global assets, with Kranefuss overseeing nearly 80% of BGI’s assets and over 60% of BGI’s profits.
iShares sale by Barclays
In April 2009, it was reported that Barclays had signed a deal to sell iShares to the European private equityPrivate equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firm CVC Capital Partners
CVC Capital Partners
CVC Capital Partners is one of the top five largest private equity firms globally with approximately US$46 billion in funds focused on management buyouts...
for $4.4B. Kranefuss announced at the time he would be stepping away from daily management duties to assume the title of Vice Chairman of iShares, focusing on the transition process. However, during a go-shop period in the CVC contract, Barclays reportedly received significant interest to buy all of BGI — including iShares — by numerous parties. Subsequently, New York money manager BlackRock
BlackRock
BlackRock, Inc. is an American multinational investment management corporation and the world's largest asset manager. BlackRock is headquartered in Manhattan, New York City, New York, United States and is the leading provider of investment, advisory, and risk management solutions...
out-bid all others and purchased BGI, closing the deal in late in the year.
Though having grown iShares by extensive distribution over the decade — into a global fund family with over $500B in assets, and the 4th largest fund family in the U.S. — it was reported in early 2010 that Kranefuss (on reportedly good terms with BlackRock
BlackRock
BlackRock, Inc. is an American multinational investment management corporation and the world's largest asset manager. BlackRock is headquartered in Manhattan, New York City, New York, United States and is the leading provider of investment, advisory, and risk management solutions...
senior management) would continue only through an integration period. He left BlackRock
BlackRock
BlackRock, Inc. is an American multinational investment management corporation and the world's largest asset manager. BlackRock is headquartered in Manhattan, New York City, New York, United States and is the leading provider of investment, advisory, and risk management solutions...
at the end of April 2010.
Current activities
Kranefuss is currently focused on corporate advisory an principal investing in the asset management industry. In September 2011, he and fromer iShares Colleague Rory Tobin announced the formation of ETF Opportunity Partners LLP, with an eye to acquiring ETF businesses (initially in Europe). He and Tobin penned an opinion piece in the Financial Times explaning their perspective the same month .Kranefuss also has an active interest in corporate sustainability, and has invested in that area. He appeared at the 2010 Fortune Brainstorm Green conference tto talk about that.
Affiliations
Kranefuss’ past and present affiliations include:- Cornell UniversityCornell UniversityCornell University is an Ivy League university located in Ithaca, New York, United States. It is a private land-grant university, receiving annual funding from the State of New York for certain educational missions...
– Parker Center for Investment Research
- Investment Company InstituteInvestment Company InstituteThe Investment Company Institute is the national association of U.S. investment companies. ICI encourages adherence to high ethical standards, promotes public understanding of funds and investing, and advances the interests of investment funds and their shareholders, directors, and advisers.As of...
– Board of Governors
- Democratic PartyDemocratic Party (United States)The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
Personal life
Kranefuss was born in Endicott, New YorkEndicott, New York
Endicott is a village in Broome County, New York, United States. The population was 13,038 at the 2000 census. It is part of the Binghamton Metropolitan Statistical Area. The village is named after Henry B...
. He lives in the San Francisco Bay area
San Francisco Bay Area
The San Francisco Bay Area, commonly known as the Bay Area, is a populated region that surrounds the San Francisco and San Pablo estuaries in Northern California. The region encompasses metropolitan areas of San Francisco, Oakland, and San Jose, along with smaller urban and rural areas...
in Marin County
Marin County, California
Marin County is a county located in the North San Francisco Bay Area of the U.S. state of California, across the Golden Gate Bridge from San Francisco. As of 2010, the population was 252,409. The county seat is San Rafael and the largest employer is the county government. Marin County is well...
.