NEW YORK (Reuters) - Sue Wagner is an unlikely Wall Street power broker.
Sure, she heads operations at BlackRock (BLK.N), the fund firm panicked bank CEOs call when they need to dump billions of dollars of dud loans in a hurry. She owns $100 million in BlackRock stock and is plotting the firm's global expansion.
But she is also a mother of three school-age children and a down-to-earth New York commuter. She leaves her suburban Westchester County house at 6:20 a.m. to drive to work, a 40-mile schlep. And her office has beige industrial carpet, a desk piled with papers and temporary furniture.
"I tell people I have two full-time jobs," says Wagner, 47, as she sips from a plastic bottle of not-so-fancy Poland Spring Water. "There is no such thing as the right balance between work and family. I'm torn at times; you can't get it right."
Wagner's rise on Wall Street mirrors BlackRock's ascent as the top publicly traded fund manager with $1.4 trillion in assets and a $26 billion market value. A cast-off of the Blackstone (BX.N) private equity group, BlackRock lived in obscurity for much of its 20-year existence.
That changed when it took over Merrill Lynch's MER.N fund business in 2006, doubling assets and staff overnight. Then the credit crisis struck and BlackRock emerged as the go-to fund manager for advice and a dumping ground for toxic securities.
"It's about: 'I have some stuff I own. What is it worth? How can I sell it?" Wagner says. "We have seen the worst of the credit crisis, but there is still a lot of risk out there."
Banks could see more losses if consumers default on car and home equity loans, she predicts. Her advice: Come clean.
"Otherwise, you don't know how troubled your portfolio is until it's a disaster," says Wagner.
Wagner should know. After getting an MBA in finance from the University of Chicago, she started her career at Lehman Brothers LEH.N in 1984 inventing mortgage securities -- forerunners of the stuff that triggered the credit crisis.
"Ultimately, the way it's all going to be resolved is through 'bad-bank' strategies," Wagner says, referring to a process whereby a bank transfers problem loans to a separate entity (the bad bank) to clean up its core (the good bank).
The latest example: UBS UBSN.VX transferred housing securities with a $22 billion face value to an entity run by BlackRock. It's a sweet deal: BlackRock bought the assets at a discount with an $11 billion loan from UBS, outside investor funds and a bit of its own money.
Expect more of these deals but not a flood, Wagner predicts, adding: "It's not like there are open and ready wallets for every deal."
Topping Wagner's to-do list is expanding into booming Asia, the Middle East and Brazil. While 70 percent of its clients are in North America, only 5 percent are in Asia.
"You need to have a presence in emerging markets," Wagner says, pointing to a stack of documents about next week's board meeting in the Gulf.
BlackRock is built on acquisitions, but Wagner sees no quick fix to fill the emerging markets gap, citing "crazy prices" for fund firms in countries like India.
"We don't want to take over things that are broke: Life is too short," she says.
That's Wagner's style -- straight and to the point, says Gary Shedlin, BlackRock's longtime M&A adviser, who chairs Citi's Global Financial Institutions Group.
"She's extremely focused and brutally honest -- that's what allows her to be so successful," Shedlin says.
Wagner's second priority is boosting BlackRock's advisory business - which generates a lot of publicity but just 5 percent of revenues -- in hopes of more UBS-type deals.
BlackRock also is looking into U.S. retirement services, an area dominated by Fidelity and Vanguard. Wagner, though, pooh-poohs "auto-pilot plans" or target date funds that buy more bonds as individuals near retirement.
"That's brute force: It's not about understanding your needs, it's about understanding your statistics," she says.
Wagner's challenge is to preserve the firm's nimbleness as it expands beyond 5,600 staff and offices in 19 countries.
She has done it before. Her only office decorations are two organizational diagrams on the Merrill merger and a caricature that shows her swinging a baseball bat as the deal was inked.
"I was hitting them on the head to get the deal done," she says. Wagner is the only woman in the caricature, a reminder that few women have made it on Wall Street.
"Sue is incredibility productive: She can get more high-quality work done than anybody I know and she does it with humanity and grace," gushes Ralph Schlosstein, BlackRock's retired president, who hired Wagner at Lehman and co-founded BlackRock with her and others in 1988.
There was "an image of the trading floor being a frat house" then, says Wagner, who graduated from elite women's college Wellesley. Her advice to women: Don't have a chip on your shoulder and make sure you're "part of the team."
Wagner herself is not about to leave the team, cash in the BlackRock chips and head for early retirement.
"It's not about the money. It's about the intellectual stimulation, it's about building something," she says.
Besides, her children axed the idea at a family dinner.
"They said: 'If you stayed at home, you would direct all that type-A energy onto us," Wagner chuckles.
Editing by Leslie Gevirtz