BlackRock’s assets under management hit a high of $ 8.68 billion in the fourth quarter as robust financial markets led by record stocks helped the world’s largest fund manager eclipse expectations of income and profits.
BlackRock, headquartered in New York City, said on Thursday that revenue increased 13% year-on-year to $ 4.48 billion, while net income increased by a fifth to $ 1.57 billion .
The company reported earnings per share of $ 10.18 on an adjusted and diluted basis for the fourth quarter, beating analysts’ expectations of $ 9.19 polled by Bloomberg. The revenue of $ 4.48 billion also exceeded analysts’ estimates of $ 4.31 billion.
“Our strategic investment areas flourished in 2020 as we saw record client demand for active, sustainable, cash and alternative equity investing strategies,” said Larry Fink, CEO and President of BlackRock , in a press release. He highlighted the strong momentum resulting from “record annual growth of 13% in organic base costs in the fourth quarter”.
The company attracted net inflows of $ 127 billion in the fourth quarter, pushing its assets above the previous record of $ 7.8 billion set in the third quarter of last year. The asset manager generated $ 185 billion in net inflows into iShares, its exchange-traded fund business, while technology services revenues exceeded $ 1 billion.
Long-term investment flows at BlackRock increased by $ 116.2 billion in the fourth quarter, with fixed income securities accounting for $ 62.7 billion and equity funds increasing by 48.1 billion dollars.
BlackRock attracted $ 391 billion in total net inflows in 2020, reflecting 5% organic growth, driven by record cash flows, active stocks and alternative investments amid strong demand for fixed income securities .
“It’s a tall order to continue to generate 4 to 5 percent annualized organic growth, but they have a mix of companies that put them ahead of their peers,” said Rob Lee, analyst at KBW. “BlackRock Solutions and Aladdin are the backbone and backbone of the organization,” and their expansion is helping the asset manager solidify more investor relationships.
“It’s a unique value proposition,” said Mr. Lee.
BlackRock shares have risen nearly 50 percent in the past 12 months and the company has set a series of records ahead of its latest results. The stock closed at a record high of $ 788 on Wednesday. Over the past year, BlackRock has eclipsed the performance of the stocks of competitors in the S&P 500 Asset Manager Index.