BlackRock shares surge as record ETF quarter drives profit jump
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The news: BlackRock shares rose almost 5% after the world’s largest asset manager posted a 46% jump in quarterly profit, shrugging off a volatile market and a wave of private credit withdrawals.
CEO Larry Fink called it “one of the strongest starts to a year in BlackRock’s history.”
The numbers: Net income reached USD2.2 billion ($3.1 billion) in the first quarter, with revenue up over 25% to USD6.7 billion.
A record quarter for the iShares ETF business drove USD130 billion in net inflows, pulling in USD72 billion across equity funds and USD34 billion into fixed income. Adjusted earnings of USD12.53 a share beat analyst estimates by 99 cents, according to Reuters.
Shares rose 4.91% on Tuesday to USD1,073.96.
Assets under management dipped 1% to USD13.89 trillion from a record set at year-end, as a sell-off across stocks, bonds and cryptocurrencies wiped about USD266 billion off the value of assets BlackRock manages.
Performance fees surged to USD272 million from USD60 million a year earlier, boosted by the acquisition of private credit specialist HPS Investment Partners.
Private markets drew USD9 billion in inflows, below analyst projections compiled by Visible Alpha of USD12 billion, as wealthy investors attempted to pull more than USD20 billion from private credit funds industry-wide, forcing BlackRock’s HPS unit to cap withdrawals.
Chief financial officer Martin Small said institutional demand remained “strong,” with Fink adding that spreads on new private credit loans had widened by 0.25 to 0.5 percentage points since year-end.
What they said: “Our model is working, and we’re more confident than ever in the opportunity we see ahead for our firm, clients, and shareholders,” Fink said.
The sources: BlackRock, Financial Times, Reuters
