Kelly Haughton, strategic director and guiding force behind the growth of Russell Indexes, has told employees he is retiring.

Company officials confirmed the decision to IndexUniverse.com early Friday. Russell Indexes is a unit of Russell Investments, which is mainly known for its institutional money management expertise. It was founded in 1936 and is a subsidiary of Northwestern Mutual Life Insurance Co.

Haughton is chiefly responsible for the growth of the index giant, from its first stab at the index creation business back in 1983, to its leading position today as provider of 63% of the benchmarks for institutional investors, covering 55.6% of all U.S. institutional assets, or approximately $4.4 trillion in assets.

According to company insiders, a decision on filling Haughton's role has yet to be made. Russell has been enhancing its strategic global indexing group, which Haughton has been overseeing for the past two years. An in-house replacement, most probably in the form of a number of people sharing responsibilities, is viewed as the most likely scenario after Haughton's stepping down. 

His decision is effective on Oct. 17 and has been anticipated for months. 

In 1984, as an outgrowth of its research on U.S. money managers and noting the lack of transparent performance benchmarks covering U.S. equity funds, Russell created its first U.S. Equity Indexes, including the Russell 1000 and small-cap Russell 2000.

The company also introduced the concept of float-adjusted indexes at the time, the first index family to reflect the investable portion of companies. Throughout his tenure at Russell, Haughton has also served as the public face, and voice, for index-related issues.

Haughton joined Russell in 1982, and created the first version of the asset allocation model used by Russell Investment Management Co. to assist clients in asset allocation across the Russell funds.

Over the past two decades-plus, Russell Indexes has grown not only its index family, but its strategic business lines and products extended from the underlying indexes. Haughton has been instrumental in all of the major Russell Index initiatives. Some of the more notable developments since 1983 include:

• Creation of the first style indexes—growth and value, in 1987.
• The development of multifactor style indexes in 1993.
• Strategic partnership with Nomura Securities for the Russell/Nomura Japan Equity Indexes, in 1995.
• First ETF tied to a Russell index launches, in 1999.
• The float-adjusted index approach, pioneered by Russell, becomes the global industry standard, in 2000.
• Russell introduced active manager benchmarks, the Manager Universes, in 2006.
• The company goes global, offerings it series of Global Indexes, in 2007.
• An increase of market share in the institutional benchmark business from 18.5% in 1996, to 63% today.

Throughout his time at Russell, Haughton has had a role in numerous business areas. He was the company's first chief Internet strategist in 2000, developing Web technology to deliver Russell's proprietary research to investors. Haughton also spent 12 years as head of client service programs for U.S. institutional investors.