(Adds share price, executive and analyst comment, earnings
By Ashley Lau
NEW YORK, July 16 BlackRock Inc, the
world's largest money manager, reported an 11 percent jump in
second-quarter profit on Wednesday, boosted by strong markets
that helped drive flows into its funds across asset classes and
The New York-based asset manager posted net income of $808
million, or $4.72 per share, up from $729 million, or $4.19 per
share, a year earlier.
"A key thing for BlackRock is that we are the largest
player," Chief Executive Officer Laurence Fink said in an
interview, noting that the asset manager's global presence and
local footprint in 30 different countries has enabled it to grow
by winning assets from smaller players in many domestic markets.
"In Europe, we're seeing domestic mutual fund players losing
market share to the international players," he said. "Some of
the domestic managers may have superb asset management in their
domestic market, but they don't have, in many cases, the global
presence in products across the board."
BlackRock ended the quarter with $4.6 trillion in assets
under management, up 19 percent from a year ago.
BlackRock's iShares exchange-traded funds business, which
crossed $1 trillion in assets for the first time in June, drove
the bulk of the asset manager's long-term net flows during the
quarter. Of the $38 billion that investors poured into long-term
funds during the quarter, 80 percent was into iShares funds.
BlackRock executives said they have benefited from investors
utilizing ETFs in place of other financial instruments,
replacing futures or single bond strategies with more liquid and
cheaper ETFs to gain exposure.
"That is something that many of the other issuers of ETFs
really don't think about," BlackRock President Rob Kapito said
on a call with analysts. "We are treating (ETFs) as a
significant financial instrument, not just a product that we're
hoping to garner more assets in."
BlackRock said it had positive net flows across asset
classes during the quarter, and fixed-income products led gains
with $21.3 billion in long-term flows. Investors added $9.7
billion in net flows into its equity funds, $6.8 billion into
multi-asset products, and $267 million into alternatives.
The company's annualized organic growth during the quarter
was 4 percent, and Fink stood by his target to generate 5
percent annual growth in assets under management.
"I'd rather see Larry set aggressive targets just so that
there's drive behind their business model," said Gabelli & Co
analyst Macrae Sykes.
Revenue at BlackRock grew 12 percent to $2.8 billion, with
revenue generated by performance fees paid by investors growing
29 percent to $115 million from a year earlier.
Excluding a net non-cash tax expense and other one-time
items, earnings were $4.89 a share, beating analysts' average
forecast of $4.46 a share, according to Thomson Reuters I/B/E/S.
BlackRock shares were down 0.2 percent at $323.18 after
rising earlier in morning trading on the New York Stock
(Reporting by Ashley Lau in New York; Editing by Lisa Von Ahn,
Bernadette Baum and Nick Zieminski)