BlackRock has achieved a milestone with its assets under management (AUM) reaching $10.65 trillion in the second quarter of 2024. This achievement was by inflows into its exchange-traded funds (ETFs) and a robust performance across various investment sectors.
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BlackRock attracted $51 billion in client cash to its long-term investment funds during the second quarter. Investors added $83 billion to ETFs and $35 billion to fixed-income funds.
CEO Larry Fink credited the organic growth to private markets, retail active fixed income and surging ETF flows.
The company saw $30 billion in net flows to cash-management and money-market funds. Total net flows for the period were $82 billion, although net flows to long-term investment funds fell short of the $86 billion average estimate by analysts.
A $20 billion redemption in active fixed-income from a large insurance client affected overall flows as reported by CFO Martin Small.
The company’s revenue for the second quarter rose 8% year-over-year to $4.8 billion. Adjusted net income per share increased by 12% to $10.36 surpassing Wall Street’s average estimate of $9.93.
Performance fees saw a boost of $46 million from the previous year driven by higher revenue from liquid alternatives.
The firm’s ETF inflows included contributions from its higher-fee Strategic and Precision products. BlackRock added approximately $2 billion to its illiquid alternatives business.
The firm’s position as a leading ETF provider was strengthened with about $150 billion in net inflows for the first half of the year, $83 billion of which occurred in the second quarter.
The company’s $12.5 billion acquisition of Global Infrastructure Partners will add about $100 billion in assets and elevate the firm’s standing in infrastructure investments.
The £2.55 billion acquisition of Preqin, a private-markets data firm aims to enhance BlackRock’s capabilities in indexing private markets and expanding access to alternative assets.
Other acquisitions include SpiderRock Advisors enhancing BlackRock’s market presence and product offerings.
The S&P 500 index’s 4% rise in the second quarter and a 10% increase in the first quarter buoyed market sentiment.
Investors are anticipating potential interest rate cuts by the Federal Reserve which may influence fixed-income fund flows.
The firm experienced growth in private markets and retail active fixed income contributing to its overall organic base fee growth of 3% in the first half of 2024.
The firm’s ETF success was partly attributed to the introduction of new spot Bitcoin ETFs approved earlier in the year.
The company’s earnings per share (EPS) for the second quarter rose to $9.99 from $9.06, showing strong financial health and performance.
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The benchmark S&P 500 index surged approximately 4% in the reported quarter. This market uplift contributed to the increase in BlackRock’s AUM from $9.43 trillion a year earlier and $10.5 trillion in the first quarter.
The bull market was driven by optimism regarding a soft landing for the US economy and around AI-linked stocks.
The company’s ETFs saw an inflow of $83 billion, the best start to a year on record for these investment vehicles.
The company registered total net inflows of $81.57 billion during the quarter slightly higher than the $80.16 billion recorded a year earlier.
The company announced the acquisition of private markets data provider Preqin for nearly $3.2 billion.
The company acquired Global Infrastructure Partners for $12.5 billion. This acquisition places BlackRock at the forefront of investing in global infrastructure projects.
BlackRock’s total revenue rose by 8% to $4.81 billion in the quarter. Investment advisory and administration fees which are typically a percentage of AUM increased by 8.6% to $3.72 billion.
Revenue from technology services jumped 10% to $395 million, an ongoing demand for BlackRock’s investment risk management platform, Aladdin.
Net income rose to $1.50 billion, or $9.99 per share, from $1.37 billion or $9.06 per share, a year earlier.
BlackRock’s introduction of the iShares Bitcoin Trust (IBIT) has attracted institutional investors. The firm’s holdings include over 300,000 Bitcoin.
In April, BlackRock achieved a streak of over 71 days of consistent inflows, a feat not matched by other asset managers during the same period.
BlackRock’s shares rose by 1.2% in premarket trading following the announcement of the record AUM. The stock has only gained 2% year-to-date, underperforming the S&P 500 index’s 17.7% gain.
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