Client inflows boost revival at BlackRock
US ASSET manager BlackRock suffered a 20 per cent fall in second-quarter profit compared to last year, but saw results improve from the first three months of the year, it said yesterday.
The firm, which will become the world’s largest asset manager upon completion of its $13.5bn (£8.2bn) acquisition of Barclays Global Investors (BGI), said net income had fallen to $218m, or $1.59 per share, down from $274m, or $2 per share, in the same period of 2008.
Removing non-recurring costs from the firm’s results, BlackRock’s earnings reached $1.75 per share, well ahead of an analysts’ consensus forecast of $1.56.
Revenue sank 26 per cent from $1.39bn last year to $1.03bn, but rose from the $987m seen in the first three months of the year, changes that the company said tracked fluctuations in its assets under management (AUM).
AUM were $1.373 trillion for the quarter, down from last year’s $1.427 trillion but up from $1.283 trillion at the end of March.
The rise reflected $15.2bn of new money deposited by the firm’s clients into its funds during the quarter.
“While markets were significantly more favourable during the second quarter, they remain choppy in the face of conflicting signals about global economic conditions,” said Laurence (Larry) Fink, BlackRock’s chief executive.
Fink, who wrapped up the deal to buy BGI earlier this year, said that investors’ and clients’ view of the deal was “favourable”.
BlackRock will manage some $2.7 trillion in assets on completion of the merger, making it the world’s largest money manager.
The deal is expected to close in the fourth quarter, with executives predicting that integration costs would reach between $300m and $500m during next year.
The firm has also benefited from its position as a key adviser to the US government on the valuation of distressed assets.
BlackRock was one of nine firms chosen by US authorities to help administrate the Public-Private Investment Programme, which buys assets considered difficult to value from banks.