BlackRock, the world’s largest asset manager, has reported record-breaking assets under management (AUM) of $10.5 trillion in the first quarter of the year, accompanied by a remarkable 36% surge in profit. The company attributed this exceptional performance to the buoyant global equity markets, which propelled investment advisory and administration fees.
The first quarter witnessed a notable rally in global stock markets, driven by the anticipation of major central banks pivoting towards interest rate cuts rather than tightening monetary policies. The MSCI’s global stock performance gauge surged by 7.7%, while the S&P 500 experienced a substantial 10% jump during this period.
BlackRock’s AUM experienced a remarkable 15% surge compared to the previous year, while its investment advisory and administration fees climbed nearly 8.8% to reach $3.63 billion. Larry Fink, the company’s chairman and CEO, expressed optimism about the future, citing unprecedented opportunities for BlackRock, its clients, and shareholders. He highlighted potential investment avenues in artificial intelligence, specific emerging markets, and infrastructure development.
In line with its expansion strategy, BlackRock announced the acquisition of Global Infrastructure Partners for $12.5 billion in January, aiming to venture into private markets and alternative assets through infrastructure investments globally. The acquisition is expected to be finalized in the third quarter of the year.
Despite the impressive financial results, BlackRock observed a decrease in total net inflows to $57 billion from $110 billion the previous year. This decline was partly attributed to seasonal outflows from institutional money market funds at the end of March. However, BlackRock’s President, Rob Kapito, noted that inflation concerns and an inverted Treasury yield curve were impacting allocations to fixed income.
Analysts foresee a potential resurgence in asset management industry flows following interest rate cuts, which could incentivize the movement of cash into riskier assets. Exchange-traded funds (ETFs) captured the majority of inflows, with BlackRock’s iShares Bitcoin Trust drawing significant attention, amassing $14 billion in net inflows since its launch in January.
BlackRock’s total revenue surged by 11% to $4.73 billion in the quarter, driven by higher performance fees and technology revenue, as well as the impact of higher markets on average AUM. The company’s robust performance underscores its position as a leading provider of investment management and technology services globally.
