BlackRock’s managed assets have peaked at a record $ 9tn in the first quarter, driven by record fund flows across its investment platform led by fixed income.
Shares of BlackRock rose 2 percent to a fresh high on Thursday, following earnings and revenue forecasts. Investors in particular encouraged higher performance fees and organic growth of assets that came above the long-term target set by the world’s largest asset manager.
The first quarter was marked by a sharp rise in yields on 10-year government debt and strong turnover in such volatile areas as the stock market, as investors took their position to recover from vaccine-led economic activity this year.
“Inflation and deficit issues are key in conversations with fixed-income clients,” said Larry Fink, chief executive of BlackRock.
Total net investment flows rose to a record 2 172bn in the first three months of the year, marking the fourth quarter, attracting more than 100 100 billion in new money.
The flow of long-term investments increased by 3 133bn over the period, with income 60.8bn of fixed income coming in and equity funds swelled by ing 49.8bn.
Fixed-income clients wanted floating interest rate products and short-term bonds that were at low risk for a sharp rise in long-term market rates in the quarter, BlackRock said. There was also a demand for income through the high-yield bond market, the field of fixed income which has recorded a positive performance this year.
Fink said the breadth of BlackRock’s product range puts it in the best position to win business from institutional investors around the world, who have acquired huge cash holdings.
“The sidelines have an incredible amount of money. Overall, our clients are still sitting in pools of money and investing in them, ”Fink said.
“While all private managers will benefit from the growing equity market this quarter, we believe BlackRock’s ability to expand its outflows remains a key differentiator,” said Kyle Sanders, an analyst at Edwards Jones. “The strong flow illustrates that the company is widening the competitive gap against competitors and gaining market share.”
BlackRock has recorded annual biological growth in assets under 8 percent management and a record 14 percent biological base fee increase.
“It was a strong biological growth for Blackrock and it exceeded their long-term target of 5 percent, so there will be a readback at that pace later this year,” said Credit Suisse analyst Craig Siegenheler.
Quarterly earnings rose 19 percent year-on-year to 4. 4.4bn, beating a forecast of $ 4.3bn. Net income rose 16 percent to $ 1.2 billion and the company reported consolidated earnings per share of 7.77. Analysts, led by Bloomberg, expected earnings per share of 7.71.
The asset manager’s larger investment returns fell 44.4 percent during the quarter, but “Blackrock’s margins are in the best position in the asset management industry,” Sanders said.