BlackRock assets hit record $10.5 trillion as markets surge

Global equity markets rallied in the first quarter on expectations that the world’s major 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 was up 10% in the first three months of the year and the MSCI’s gauge of global stock performance rose 7.7%. BlackRock’s AUM surged 15% in the first quarter from a year earlier, while investment advisory and administration fees, typically a percentage of AUM and the company’s chief source of revenue, climbed nearly 8.8% to $3.63 billion.

“I see the greatest opportunities I’ve ever seen for BlackRock, for our clients, and for our shareholders,” Larry Fink, the company’s chairman and CEO, said during a conference call to discuss the results.

He mentioned investor 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 globe.

BlackRock has been hunting for a transformative deal while its revenues stagnated and its environmental, social, and corporate governance business came under political attacks 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 premarket 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 some $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 asset management industry flows to re-accelerate after interest rate cuts begin, as that would incentivize the movement of cash piles 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 has drawn $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 the impact of higher markets on average AUM.

BlackRock provides investment management and technology services to retail and institutional clients globally, including sovereign wealth funds, insurance companies, and large corporations.

Its technology revenue jumped about 10.9% to $377 million, reflecting sustained 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, 07:05 PM IST