April 14 (Reuters) – 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% before the bell.
Total net inflows were $130 billion, mostly into the asset manager’s iShares ETFs. Its private markets business drew inflows of $9 billion in the quarter.
“BlackRock is a scale operator across public markets, private markets and technology,” said Chief Executive Laurence Fink. “That combination is proving more valuable every day.”
The company reported a net profit of $2.21 billion, or $14.06 per share, for the three months to March 31. BlackRock said its adjusted earnings were $12.53 a share, against analyst expectations of $11.54.
Assets under management stood at $13.89 trillion, up from $11.58 trillion a year earlier.
Investment advisory performance fees, meanwhile, reached $272 million, representing a significant spike above the $60 million in the same period last year.
Tuesday’s early share price gains were against a backdrop of a flat U.S. market, but 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 in huge sums of investor capital in recent years but has been hit by significant outflows from some managers of late.
The bankruptcies of U.S. auto parts supplier First Brands and car dealership Tricolor last year brought attention back to the risk element in a sector that has been criticized by some for a lack of transparency.
BlackRock said Tuesday that it had $320.4 billion of assets in its private markets business in the first quarter, down from $322.6 billion at the end of last year. The figures reflect $9.1 billion of net inflows and $8.5 billion of returns of capital, along with a $2 billion drop in market values.
Fink said private markets inflows “were led by private credit and infrastructure, where we havestrong fundraising and deployment momentum”.
(Reporting by Pritam Biswas in Bengaluru and Colin Barr in New YorkEditing by Leroy Leo and David Goodman)
Comments