George U. “Gus” Sauter, managing director and chief investment officer of Vanguard, will retire from the firm at the end of the year, and Mortimer J. “Tim” Buckley, a managing director, will assume the role of chief investment officer upon Sauter’s retirement, Vanguard announced today.

Sauter, 57, joined Vanguard in 1987 and currently directs the firm’s global investment management groups, which oversee $1.6 trillion of Vanguard’s $2.1 trillion in global assets. Buckley, 43, a long-time member of Vanguard’s senior staff, has directed Vanguard’s Retail Investor Group since 2006. The group serves 5 million individual investors through its client services, high-net-worth, brokerage, advice, annuity, college savings and processing operations.

In a statement, Vanguard CEO Bill McNabb praised Sauter’s contributions as a member of Vanguard’s senior staff. “On behalf of the entire Vanguard family, I thank him for his dedication and service to our clients and our crew. Under his leadership, Vanguard has emerged as a world-class investment management firm with an unparalleled record of accomplishment,” he said.

Sauter joined Vanguard as head of the firm’s internal equity management group just two weeks prior to the 1987 market crash. He played a lead role in expanding Vanguard’s line-up of index funds, helped develop the firm’s active quantitative equity strategies, and led the firm’s charge into exchange-traded funds. In 2003, he was named Vanguard’s first chief investment officer. In recent years, Sauter has focused on integrating Vanguard’s global investment management capabilities to support the company’s expansion in Australia, the Pacific Rim, the U.K., Canada, and Europe, the firm said.

“I look back with a mixture of pride and humility on helping to popularize the indexing concept. I am also grateful for being associated with Vanguard for nearly my entire career,” Sauter said in a statement. “It is time to pass the baton to a new leader who can further build upon our strong investment management foundation. Tim Buckley is the right choice for Vanguard and for our clients.”

Buckley joined Vanguard in 1991 and has held various leadership positions within Vanguard’s Planning and Development, Retail Investor, and Web Services groups. From 2001 to 2006, Buckley served as chief information officer and head of Vanguard’s Information Technology Division.

Buckley is a long-time member of Vanguard’s Portfolio Review Group, which includes McNabb and six members of Vanguard’s senior staff. The group has oversight responsibilities for Vanguard’s in-house investment management functions and 30 external investment advisory firms employed by Vanguard in the U.S. and abroad.

“I look forward to working closely with Gus and the entire investment management team in the months ahead as I transition to this important role,” Buckley said in a statement.

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