BlackRock reported a rise in first-quarter profit on Tuesday, reflecting strong flows into its exchange-traded funds (ETFs) and a sharp increase in performance fees, sending its shares up 3% in pre-market trade.
Total net inflows were $130bn, mostly into the asset manager’s iShares ETFs. Its private markets business drew inflows of $9bn in the quarter.
“BlackRock is a scale operator across public markets, private markets and technology,” said CEO Larry Fink. “That combination is proving more valuable every day.”
The company reported a net profit of $2.21bn, or $14.06 a share, for the three months to March 31. BlackRock said its adjusted earnings were $12.53 a share compared with analyst expectations of $11.54.
Assets under management amounted to $13.89-trillion, up from $11.58-trillion a year earlier.
Investment advisory performance fees reached $272m, representing a significant spike above the $60m reported for the same period last year.
Tuesday’s early share price gains were against a backdrop of a flat US market, though the stock remains down more than 4% this year, lagging behind its smaller rival State Street. The S&P 500 index lost 4.6% in the first quarter.
Private markets
Investors have been watching for clues on the health of BlackRock’s investments in private credit, an industry that has drawn huge sums of investor capital recently but has been hit by significant outflows from some managers of late.
The bankruptcies of US vehicle spares supplier First Brands and car dealership Tricolor last year brought attention back to the risk element in a sector that has been criticised by some for a lack of transparency.
BlackRock said on Tuesday that the value of assets in its private markets business was $320.4bn in the first quarter, down from $322.6bn at the end of last year. The figures indicate $9.1bn of net inflows and $8.5bn of returns of capital, along with a $2bn drop in market values.
Fink said inflows to private markets “were led by private credit and infrastructure, where we have strong fundraising and deployment momentum”.
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