Fri. Jan 21st, 2022

A fourth-quarter boom in BlackRock’s exchange-traded funds helped the firm become the first asset manager to reach the $ 10 trillion milestone.

By Bloomberg

BlackRock Inc. became the first public asset manager to achieve $ 10 trillion in assets, driven by an increase in flows in the fourth quarter to its exchange-traded funds.

Investors have poured a net $ 104 billion into ETFs in the three months ended December 31, the firm said in a statement Friday – a record for the company.

Chart showing how BlackRock's assets under management rose to a record high in 2021

The world’s largest asset manager also benefited from a boom in markets, with the S&P 500 climbing 11% in the most recent quarter and 27% in 2021. Investors added a net $ 169 billion to BlackRock’s long-term investment vehicles, including ETFs and mutual funds, in the last three months of the year.

“Our business is more diversified than ever before,” CEO Larry Fink said in the statement. “Active strategies, including alternatives, have contributed more than 60% of 2021’s organic base fee growth.”

The results strengthen BlackRock’s position at the top of the industry, with assets under management recovering from a decline at the end of the third quarter. The earnings come before an annual letter Fink (69) sends to corporate leaders, setting out priorities on everything from council diversity to climate change.

Chart showing flows in BlackRock's active funds jumping into the fourth quarter of 2021

Actively managed funds, a style that includes ETFs and mutual funds, achieved a net $ 101 billion in cash flow. BlackRock now manages $ 2.6 trillion in such assets. The firm’s alternative business, which includes hedge funds, had inflows of $ 5.5 billion, bringing the total assets to $ 265 billion.

Employee compensation and benefits increased $ 218 million from the fourth quarter of 2020, reflecting the firm’s move to increase staff payments as inflation in the US increases. As of September, base salaries have risen by 8% for all staff at director level and below.

New York-based BlackRock had adjusted earnings per share of $ 10.42, beating the average estimate of $ 10.15 of analysts surveyed by Bloomberg. Revenue for the quarter was $ 5.11 billion, missing the average estimate of $ 5.16 billion.

BlackRock fell short of revenue due to a decline in performance fees, according to Kyle Sanders, an analyst at Edward Jones. The stock fell 1.6% in early trading in New York to $ 854.

(Add analyst comment in last paragraph. An earlier version of this story corrected the ETF record and the amount in the first cover heading.)

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