BlackRock Inc., the world’s largest asset manager, announced a record-breaking achievement in the second quarter of 2024: its assets under management (AUM) reached $10.65 trillion.
This milestone is attributed to rising client asset values and significant investor inflows into the company’s exchange-traded funds (ETFs).
BlackRock reported total net inflows of $81.57 billion for the second quarter, a slight increase from $80.16 billion a year earlier. Notably, ETFs captured the majority of these flows, with $83 billion, marking the best start to a year for BlackRock’s ETFs.
CEO Larry Fink commented,
“BlackRock is executing on the broadest opportunity set we’ve seen in years, including in private markets.”
The benchmark S&P 500 index rose approximately 4% in the reported quarter, further boosting the company’s performance. This increased BlackRock’s AUM from $9.43 trillion a year earlier to $10.5 trillion in the first quarter of this year.
Financial Metrics and Revenue Growth
BlackRock’s financial results for the quarter showed an 8% increase in total revenue, reaching $4.81 billion. Investment advisory and administration fees, a significant portion of the company’s revenue, rose 8.6% to $3.72 billion.
Additionally, revenue from technology services increased by 10% to $395 million, reflecting sustained demand for BlackRock’s investment risk management platform, Aladdin.
The company’s net income for the quarter grew to $1.50 billion, or $9.99 per share, up from $1.37 billion, or $9.06 per share, a year earlier. Despite the revenue growth, BlackRock’s shares have risen only 2% this year, underperforming the S&P 500 index’s 17.7% gain.
Acquisitions and Market Expansion
In addition to its strong quarterly performance, BlackRock has been actively expanding its market presence through acquisitions. Last month, the company agreed to purchase data provider Preqin for nearly $3.2 billion to enhance its capabilities in private markets. This follows a $12.5 billion deal to acquire Global Infrastructure Partners earlier this year, positioning BlackRock at the forefront of investing in global infrastructure projects.
Fink emphasized the importance of these acquisitions, stating,
“We are opening up meaningful new growth markets for our clients and shareholders with our planned acquisitions of Global Infrastructure Partners and Preqin.”
These moves are expected to reduce BlackRock’s reliance on low-fee-generating ETFs and provide a strong growth opportunity within private assets over the next decade.
Market Reaction and Future Outlook
The market responded positively to BlackRock’s earnings report, with shares rising 1% in premarket trading. BlackRock’s robust earnings and strategic initiatives highlight its ability to attract substantial client investments and maintain a strong market presence despite challenging conditions.
BlackRock’s strong relationships with corporates and governments worldwide have positioned it as a key capital partner in private markets, offering clients unique investment opportunities. The acquisition of Global Infrastructure Partners, expected to close in the third quarter of 2024, is anticipated to double the firm’s private markets base fees and add approximately $100 billion of infrastructure AUM.
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