BlackRock, the world’s largest asset manager, reported on Friday record assets under management (AUM) of about $10.5 trillion in the first quarter and posted a 36% jump in profit, as a rebound in global equity markets boosted its investment advisory and management fees.
Global equity markets rallied in the first quarter on expectations that the world’s main central banks were done with monetary policy tightening and would pivot to cutting interest rates, resulting in a jump in AUM. The S&P 500 index rose 10% in the first three months of the year and MSCI’s gauge of global stock performance rose 7.7%. BlackRock’s AUM rose 15% in the first quarter from a year earlier, while investment advisory and management fees, typically a percentage of AUM and the company’s main source of revenue, climbed nearly 8.8% to $3.63 billion.
“I see the biggest opportunities I’ve ever seen for BlackRock, for our clients and for our shareholders,” said Larry Fink, the company’s chairman and CEO, on a conference call to discuss the results.
He mentioned investment opportunities in areas such as artificial intelligence (AI), certain emerging markets and the need for new infrastructure.
BlackRock announced in January the acquisition of Global Infrastructure Partners (GIP) for $12.5 billion, as the asset manager aims to expand into private markets and alternative assets through infrastructure investments around the world.
BlackRock has been hunting for a transformational deal as its revenue has stagnated and its environmental, social and corporate governance business has come under political attack in the U.S. The acquisition is still on track to close in the third quarter, BlackRock Chief Financial Officer Martin Small said.
Fink said BlackRock would remain “open minded” to pursue more private market opportunities, though he did not suggest any other deal was forthcoming.
Shares of the company were up 2.32% in pre-market trading. They are down about 3.2% this year.
Inflows
Total net inflows fell to $57 billion from $110 billion a year earlier. That was partly due to about $14 billion in seasonal outflows from institutional money market funds at the end of March, Small said, adding that those were followed by $20 billion of money market net inflows in the first week of April.
Analysts expect industry flows to pick up again once interest rate hikes begin, as this would encourage the movement of money currently on the sidelines into riskier assets.
Exchange-traded funds (ETFs) captured the majority of inflows, which were also boosted by BlackRock’s iShares Bitcoin Trust, which drew $14 billion in net inflows in the first quarter since its January launch.
The company’s total revenue jumped 11% to $4.73 billion in the quarter, driven by higher performance fees and technology revenue as well as the impact of higher markets average AUM.
BlackRock provides investment management and technology services to retail and institutional clients worldwide, including sovereign wealth funds, insurance companies and large corporations.
Its technology revenue jumped about 10.9% to $377 million, reflecting continued demand for its Aladdin investment management platform.
Net income for the company rose to $1.57 billion, or $10.48 per share, in the three months ended March 31, from $1.16 billion, or $7.64 per share, a year earlier. (Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shinjini Ganguli, Ira Iosebashvili and Paul Simao)
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Published: 12 Apr 2024, 19:05 IST
(tagsTo Translate)BlackRock