BlackRock, the world’s largest asset manager, has reached a historic milestone, with assets under management (AUM) soaring to a record $10.5 trillion in the first quarter of 2024. The firm also reported a remarkable 36% surge in profit, propelled by the buoyant global equity markets that bolstered investment advisory and administration fees.

The surge in BlackRock’s AUM, which spiked by 15% compared to the previous year, can be attributed to the robust performance of global stock markets. The MSCI’s global stock performance gauge rose by 7.7%, while the S&P 500 saw a substantial 10% jump in the first quarter.

Larry Fink, BlackRock’s chairman and CEO, expressed optimism during a conference call discussing the results, highlighting significant opportunities for the company, its clients, and shareholders. Fink emphasized areas such as artificial intelligence, emerging markets, and infrastructure as promising investment avenues.

In line with its strategic expansion plans, BlackRock announced the acquisition of Global Infrastructure Partners for $12.5 billion in January, aiming to diversify into private markets and alternative assets through infrastructure investments worldwide. The acquisition is set to close in the third quarter of this year, according to BlackRock’s Chief Financial Officer Martin Small.

Fink hinted at BlackRock’s openness to further private market opportunities, signaling the company’s proactive stance towards growth. Additionally, BlackRock anticipates securing large mandates that would drive future asset flows and expand its client base, particularly through its technology platform Aladdin.

Despite a slight dip in total net inflows to $57 billion from $110 billion a year earlier, BlackRock remains optimistic about future growth prospects. The company’s President, Rob Kapito, attributed the decline partly to seasonal outflows from institutional money market funds at the end of March, followed by subsequent money market net inflows in early April.

While inflation concerns and an inverted Treasury yield curve have delayed allocations to fixed income, analysts anticipate a resurgence in asset management industry flows post-interest rate cuts, incentivizing investments in riskier assets.

In the first quarter, fixed income products saw net flows of nearly $42 billion, surpassing expectations. Exchange-traded funds (ETFs) dominated inflows, with BlackRock’s iShares Bitcoin Trust drawing $14 billion in net inflows since its launch in January.

BlackRock’s impressive performance in the first quarter, characterized by a total revenue jump of 11% to $4.73 billion, underscores its pivotal role in providing investment management and technology services globally.

Source: Reuters