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Roaring equity markets and the popularity of a new spot bitcoin exchange traded fund powered BlackRock to record assets under management of $10.5tn and net income that rose by more than one-third.
The world’s largest money manager reported a 36 per cent year-on-year jump in net income to $1.57bn in its fiscal first quarter, on an 11 per increase in revenue to $4.7bn. Those figures, as well as adjusted net income of $1.47bn, all beat the expectations of analysts polled by Bloomberg.
However, net inflows of $57bn disappointed, dragged down by $19bn of outflows from cash management products.
Chief executive Larry Fink pointed in a statement on Friday to a “strong pipeline” of opportunities. “We see significant growth potential in infrastructure, technology, retirement and whole portfolio solutions,” he said.
BlackRock was one of a dozen providers to launch a spot bitcoin exchange traded fund in the first quarter but its product has been the runaway success story: it reached $10bn in assets in record time and now has $18.7bn. That helped power total flows into ETFs in the quarter to $67bn.
Most of the $1.4tn year-on-year increase in assets under management was due to rising equity markets. In the US, the S&P 500 had its best first quarter since 2019. Fixed income funds reported inflows of $42bn and equity funds received $18bn.
“What people are going to focus on is their ability to gather assets. It’s a mixed bag,” said Kyle Saunders, analyst at Edward Jones.
BlackRock and other asset managers have been predicting a big rotation into fixed income, but the US Federal Reserve’s decision to keep interest rates at a 23-year high has thus far depressed demand.
Technology revenues, which investors like because they are somewhat less tied to market gyrations, were up $37bn year on year to $377bn.
BlackRock’s operating margin improved to 35.8 per cent, slightly better than analysts expected. The money manager announced small job cuts in January as part of a broader effort to control costs.
BlackRock shares were up about 2.6 per cent in pre-market trading on Friday. The company’s stock price is down slightly in 2024, after a strong fourth quarter during which time it rose more than 25 per cent.