BlackRock AUM Nears $4 Trillion


BlackRock AUM Nears $4 Trillion

BlackRock, Inc. (NYSE:BLK), the world’s largest money manager, on Thursday reported a 24 percent increase in its fourth quarter profits amid stronger than expected performance of exchange-traded funds and investment related to bonds. The asset manager reported $690 million or $3.96 per share in fourth quarter profits on an unadjusted basis. Earnings were better than analysts’ estimates of $3.73 per share.

The company’s board has increased its quarterly dividend payout by 12 percent to $1.68. BlackRock, Inc. (NYSE:BLK) also announced that its share buyback program has been expanded by 7.5 million shares to 10.2 million shares. BlackRock’s CEO, Laurence Fink, called the results “strong by any measure”, he said the company recorded $107.7 billion in  net profits for new business during the full-year.

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BlackRock cut its fees in October for six ETFs and brought a new low-fee exchange-traded fund to compete with Fidelity Investments, Vanguard Group and Charles Schwab Corp (NYSE:SCHW),  who were rapidly eating into its business. IShares, the ETF BlackRock, Inc. (NYSE:BLK) purchased from Barclays PLC (LON:BARC) (NYSE:BCS) in 2009, remains the biggest in the world. It attracted $35.7 billion in new customer funds during the fourth quarter.

The company reported net inflows of $31.2 billion in equity, $12.4 in fixed income and $4.1 billion in multi-asset class product. The total inflows in long-term products stood at $47 billion. The alternative net outflows during the same period were $700 million. By the end of fourth quarter, BlackRock, Inc. (NYSE:BLK) had $3.792 trillion in assets under management, up 7.94 percent from $3.513 trillion in the same period a year ago. Its fourth quarter revenues surged 14 percent to $.254 billion due to higher performance fees and strength in base fees. Analysts polled by Thompson Reuters were expecting $2.49 billion in revenues.

Last year, it seemed BlackRock’s stupendous growth was slowing down, as quarterly profits slipped. But these fourth quarter earnings assures investors that the firm has found new ways to keep growing despite its immense size. BlackRock’s CEO, Mr. Fink said last year’s slow growth was caused by investments and acquisitions the company made. And now those investments have started to pay off.

BlackRock, Inc. (NYSE:BLK) shares were up 4.43 percent to $231.94 in trading today.