As bloggers across the Internet were talking up a potential sale of exchange-traded funds leader Barclays Global Investors, some real news was taking place at the San Francisco-based asset management giant. 

The $1.5 trillion asset manager said on Thursday it had hired longtime Citi/Smith Barney executive John Longley as its new head of national accounts in the U.S.

In that role, Longley will set the strategic direction and lead a team to expand iShares ETF distribution through partnerships with national and regional banks and brokers, according to the company. 

Earlier in the day, a Financial Times blog came out with a report that built on speculation running through the industry that Barclays Plc was preparing to unload its asset management arm. BGI refused to comment on the rumors.

But a later Reuters report, citing an inside source, disputed that claim. And a Dow Jones piece from London also seemed to dismiss the blog item.  (See related article here.)

Although an ongoing credit crisis is creating havoc within the financial sector -- while at the same time, most ETF providers are still attracting net inflows -- parent Barclays' chief executive has been quoted recently as saying that he prized BGI's growth potential for the entire company.

Besides owning one of the world's largest asset managers with BGI's 3,000 institutional clients, Barclays also operates a leading distributor of exchange-traded notes, Barclays Capital. It serves as the investment banking arm of Barclays Bank.

But as the rumors of an emminent break-up  of the global financial institution were dying, BGI was moving to beef-up its distribution channels. Besides the iShares ETF line, the firm also oversees the LifePath target-date retirement family of funds, global long-short investment strategies for institutional investors and securities lending services, among others.

Longley has a background in distribution and customer relations management stretching back 20 years. He joined Smith Barney in 1993 and moved up from a branch to regional and divisional director for the firm. Longley has worked in the U.S. as well as abroad and last year was named chief executive of Citi's private banking operations in the U.S. and Canada. 

Last year, his responsibilities were expanded to include Citi global wealth management's domestic lending services and its capital strategies unit. 

The selection of Longley figures to reinforce BGI's strategy of moving deeper into the institutional marketplace with its ETF business. Last year, it hired the leading global researcher in the exchange-traded marketplace, Deborah Fuhr. She had been a pioneer in developing and analyzing exchange-traded investment products for Morgan Stanley's institutional clients. (See related story here.)

"We are delighted to have someone of John’s caliber and experience join us as we continue to reinforce our leadership position in the fund industry," said Michael Latham, CEO of U.S. iShares at BGI, in a statement.

-- This article was submitted by IndexUniverse's Murray Coleman.