By Arasu Kannagi Basil and Davide Barbuscia
(Reuters) – BlackRock, the world’s largest asset manager, reported record assets under management (AUM) of around $10.5 trillion in the first quarter on Friday and reported profit up 36% as the rebound in global stock markets has boosted its investment advisory services and administrative fees.
Global stock markets rallied in the first quarter on expectations that the world’s major central banks would be done with tightening monetary policy and turn to cutting interest rates, leading to higher prices. assets under management. The S&P 500 index rose 10% in the first three months of the year and the MSCI index of global stock performance rose 7.7%.
BlackRock’s assets under management jumped 15% in the first quarter from a year earlier, while investment advisory and administrative fees, which are typically a percentage of assets under management and the main source of the company’s revenue, climbed nearly 8.8% to $3.63 billion.
“I see the greatest opportunities I have ever seen for BlackRock, for our clients and for our shareholders,” Larry Fink, the company’s chairman and CEO, said on a conference call to discuss the results.
He mentioned opportunities for investors 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 in the whole world.
BlackRock was seeking a transformative deal as its revenues stagnated and its environmental, social and corporate governance activities came under political attack in the United States. The acquisition is still on track to close in the third quarter, said Martin Small, BlackRock’s chief financial officer.
Fink said BlackRock would remain “open-minded” to pursuing more private market opportunities, although he did not suggest another deal was forthcoming.
Shares of the company rose 2.32% premarket. They are down about 3.2% this year.
INFLUX
Total net inflows fell to $57 billion from $110 billion a year earlier. This was partly due to some $14 billion in seasonal outflows from institutional money market funds at the end of March, Small said, adding that these were followed by $20 billion in net inflows into the market. monetary during the first week of April.
Analysts expect a further acceleration of flows into the asset management sector after the start of interest rate cuts, as this would encourage a shift of cash currently stashed away towards riskier assets.
Exchange-traded funds (ETFs) captured the majority of inflows, which were also boosted by BlackRock’s iShares Bitcoin Trust, which attracted $14 billion in net inflows in the first quarter since its launch in January.
The company’s total revenue jumped 11% to $4.73 billion in the quarter, driven by higher performance fees and technology revenues as well as the impact of higher average assets under management on the markets.
BlackRock provides investment management and technology services to retail and institutional clients around the world, 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.
The company’s net income rose to $1.57 billion, or $10.48 per share, in the quarter ended March 31, up from $1.16 billion, or $7.64 per share, a year ago. earlier.
(Reporting by Arasu Kannagi Basil in Bengaluru; editing by Shinjini Ganguli, Ira Iosebashvili and Paul Simao)
News Source : finance.yahoo.com
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