BlackRock Inc, the world's largest asset manager, generated higher profit during the first quarter by luring more money from investors even as stock and bond markets fell. Fund manager profits typically decline during market routs because their fees are based on the value of customer assets.
But BlackRock benefited from its large footprint in exchange-traded funds (ETFs), which have been taking market share away from pricier investment products for several years. BlackRock attracted nearly $57 billion in new cash from clients in the latest quarter. Its iShares ETFs unit was the biggest contributor, drawing $35 billion in net inflows. "It's better to be BlackRock in this atmosphere," BlackRock Chief Executive Larry Fink said in an interview. "We have always differentiated ourselves in more volatile times." Markets swung wildly during the first three months of the year as early enthusiasm over US corporate tax cuts was soon blunted by concerns about inflation, the risk of a global trade war and Federal Reserve policy.
Even so, BlackRock's assets under management climbed to $6.32 trillion as of March 31, up from $5.42 trillion a year earlier. In addition to customer inflows, BlackRock benefited from favorable currency movements, lower taxes and ensuring expenses rose less than revenue. The New York-based company's net income rose to $1.09 billion, or $6.68 per share, in the first quarter, up 28 percent from the year-ago period. Adjusted for special items, BlackRock earned $6.70 per share, beating the $6.39 per share analysts expected, on average, according to Thomson Reuters I/B/E/S.
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