BlackRock, the world’s largest money manager, achieved a historic milestone, with its assets under management (AUM) exceeding $11 trillion for the first time. This record was driven by a robust market rally and a surge in new investments, pushing the company’s shares to a new high.

Revenues Exceed Expectations

During the recent quarter, BlackRock’s revenues rose by 15% to $5.2 billion, surpassing analysts’ forecasts of $5 billion. The growth in revenues was supported by a rise in net income, which reached $1.63 billion. Improved profit margins and strategic inflows of capital fueled these impressive results. BlackRock saw its AUM grow 8%, increasing from $10.6 trillion three months prior to $11.5 trillion.

Strong Inflows Across Products

The asset growth was largely attributed to $160 billion in long-term flows and an additional $61 billion in cash management products. Investors were drawn to BlackRock’s diverse range of funds, including bond funds that benefited from the prospect of the U.S. Federal Reserve reducing interest rates. The S&P 500 also surged by 5.5% during the quarter, providing further support to BlackRock’s growth.

Larry Fink, BlackRock’s CEO, expressed confidence about the company’s future, stating, “We expect momentum to further build to the year’s end and into 2025. Investors will have to re-risk to meet their long-term return needs.” He emphasized that the capital markets are playing an increasingly significant role in the global economy.

Alternative Assets: A Growing Focus

While most new investments went into BlackRock’s staple exchange-traded funds (ETFs) and index products, the company is also expanding its presence in alternative assets, which yield higher fees. BlackRock’s recent $12.5 billion acquisition of Global Infrastructure Partners, completed after the quarter ended, added $116 billion to its AUM. This strategic purchase doubled the firm’s fees from managing private market assets. BlackRock also plans to finalize a $2.55 billion deal to acquire Preqin, a private markets data provider, by the end of 2024.

Analysts Praise BlackRock’s Performance

The results were met with praise from industry analysts. Jefferies analyst Daniel Fannon called the performance “strong,” while Edward Jones’ Kyle Sanders labeled the results as “impressive.” Sanders noted that the shift of capital from cash to fixed income and equity products serves as a “positive near-term catalyst” for the company.

BlackRock’s shares closed 3.6% higher, reaching a record $990.26, surpassing the previous peak set in November 2021. The company remains focused on sustainable growth, with CFO Martin Small affirming, “We do not need M&A to meet our growth targets of 5% annual fee growth.”

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