Business Intelligence (BI)

BlackRock Hits $10.6 Trillion Asset Record, Cites ETF Boost

15 July 2024

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Zaker Adham

Summary

BlackRock Inc. saw a significant increase in its asset base, with $51 billion in new client investments flowing into its long-term funds in the second quarter.

This milestone pushed the global money manager to a record $10.6 trillion in assets.

Investors poured $83 billion into exchange-traded funds (ETFs) and $35 billion into fixed-income investments, according to a statement from the New York-based company on Monday.

“Organic growth was driven by private markets, retail active fixed income, and surging flows into our ETFs, which had their best start to a year on record,” said Larry Fink, BlackRock’s Chief Executive Officer.

The company also reported $30 billion in net inflows to cash-management and money-market funds during the quarter, contributing to a total net inflow of $82 billion. However, net flows to the long-term investment funds fell short of the $86 billion average estimate by analysts surveyed by Bloomberg.

BlackRock's performance was impacted by a $20 billion redemption from an insurance client in the active fixed-income sector, noted Chief Financial Officer Martin Small. Additionally, institutional outflows from index funds totaled $35 billion.

Fink highlighted that BlackRock recently secured its first large-scale general account allocation for a private structured-credit mandate. The firm's ETF inflows saw growth, particularly in higher-fee Strategic and Precision products.

The company also bolstered its illiquid alternatives business by $2 billion, with performance fees rising by $46 million from the previous year, partly due to higher revenue from liquid alternatives.

Despite these gains, BlackRock's shares dropped 0.6% to $823.41 at 9:45 a.m. in New York.

Money managers are starting to recover following challenges posed by the Federal Reserve's interest rate hikes and bond market volatility over the past two years. The S&P 500 index increased by about 4% in the second quarter, following a 10% rise in the first quarter, as investors anticipate potential rate cuts by the central bank.

BlackRock's inflows are helping the firm position itself as a comprehensive provider of both actively managed and index ETFs and mutual funds, while also expanding into private assets. The firm's recent $12.5 billion acquisition of Global Infrastructure Partners will add approximately $100 billion in assets, enhancing its standing among infrastructure investors.

Last month, BlackRock announced a £2.55 billion acquisition of Preqin, a private-markets data firm. This acquisition will enable BlackRock to leverage data and analytics to broaden access to alternative assets, said Fink and senior executives.

BlackRock’s adjusted net income per share increased by 12% from the previous year, reaching $10.36 and surpassing Wall Street's average estimate of $9.93. The company's revenue grew by 8% to $4.8 billion year-over-year.

As of the market close on Friday, BlackRock's shares have risen about 2% this year, lagging behind the S&P 500 Index’s 18% gain.