BlackRock assets jump in second quarter, driven by ebullient markets
Profits exceed estimates as world’s biggest fund manager generates higher fee income
BlackRock surpassed profit estimates in the second quarter after the bumper stock market rally boosted its assets under management, increasing the group’s fee revenue.
The group delivered $7.85 in diluted earnings per share on an adjusted basis for the quarter, 13 per cent above analyst estimates. Assets under management for the world’s largest fund manager rose 13 per cent from the first quarter to $7.3tn, undoing the big drop early in 2020. The figure was just $100m short of the record reached at the end of last year.
Net income of $1.2bn was a fifth higher than the same period last year, while revenue rose 3 per cent to $3.6bn from the second quarter in 2019. Fee revenue rose 2 per cent from the prior year.
BlackRock has taken a prominent role during the pandemic, managing the Federal Reserve’s bond-buying programme that attracted criticism given the central bank’s scheme includes purchasing exchange traded funds, even the asset manager’s own funds. The company has not taken revenue from the ETFs the Fed buys.
The group’s financial markets advisory unit, which manages the Fed programme and works with central banks around the world, generated $39m in revenue, down on the same quarter a year ago. Technology revenue hit a record $278m, nearly a fifth above the same period last year, driven by the group’s Aladdin tech platform.
BlackRock’s ETF business, iShares, brought in $51bn of the group’s $100bn in net inflows for the quarter. The company trailed Vanguard, the world’s second-largest fund manager, in ETF inflows in the first half of the year, according to data from ETFGI.
BlackRock stock is a shade off the year’s high point reached in February and just 5 per cent from the record reached two years ago. The shares are up 13 per cent this year compared with an 8 per cent decline for fund managers in the S&P 500 index of US blue-chips.