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BlackRock manages assets of over $10 trillion, revenue misses analysts' estimate

By Arghyadeep on Jan 15, 2022 | 04:35 AM IST

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• Asset managing firm added a net $169 billion in long-term investment vehicles

• It also benefited from the rally in markets last year

BlackRock Inc (NYSE: BLK) became the first publicly traded asset management company to hit $10 trillion in assets, boosted by a surge in investments into its exchange-traded funds (ETFs) in the fourth quarter.

Investors poured a record $104 billion into ETFs, the company said in a statement.

The world’s largest asset manager posted a higher profit in its earnings report for the quarter ended December 31, 2021.

While analysts were expecting the company to report a profit of $10.16 per share, BlackRock’s profit rose 2.5% to $1.61 billion, or $10.42 per share, compared to a year earlier.

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Shares of New York-based BlackRock slipped 4% to $832.87 in afternoon trading, as revenue slightly missed Wall Street estimates.

Although revenue rose nearly 14% to $5.11 billion, it was marginally below the analysts’ estimate of $5.17 billion.

The growth

The earnings will reinforce BlackRock’s position in the industry, with a rebound from a dip at the end of the third quarter, as the company benefited from the bullish markets, with the S&P 500 climbing 11% in the latest quarter.

The asset manager reported a net inflow of $211.74 billion for the quarter, of which $168.55 billion was accounted for the long-term investment vehicle, including ETFs and mutual funds.

“Our business is more diversified than ever before,” Chief Executive Officer Larry Fink said in the statement. “Active strategies, including alternatives, contributed over 60% of 2021 organic base fee growth.”

BlackRock’s assets under management (AUM) stood at $10.01 trillion at the end of the fourth quarter, up from $8.68 trillion a year earlier.

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On a conference call with analysts, Fink said the firm’s active business benefits from the build-outs it had made to both its investment teams and its sales organization.

Big pensions, endowments, and other institutional clients are turning to a handful of asset managers to oversee a larger slice of their assets, Fink added, which is helping BlackRock as one of only a few firms that have both large active and passive platforms.

“We are probably the best-positioned organization in the world to meet those types of opportunities,” he said. “If anything, I think that momentum is going to accelerate going forward.”

Picture Credit: Fortune

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