BlackRock’s AUM hits $10.5 trillion amid global market surge

BlackRock’s assets under management: BlackRock, the world's largest asset manager, reported record assets under management (AUM) of approximately $10.5 trillion in the first quarter, accompanied by a 36 per cent surge in profit. The increase was fueled by a rebound in global equity markets, which heightened investment advisory and administration fees.

The first quarter witnessed a rally in global equity markets, driven by expectations of major central banks shifting from monetary policy tightening to potential interest rate cuts. This optimism propelled AUM up by 15 per cent compared to the previous year. Investment advisory and administration fees, key revenue sources for BlackRock, saw a nearly 8.8 per cent increase to $3.63 billion.

Larry Fink, BlackRock's chairman and CEO, expressed optimism about the company's prospects during a conference call discussing the results. He highlighted opportunities in areas such as artificial intelligence, select emerging markets, and infrastructure development.

In pursuit of expansion, BlackRock announced its acquisition of Global Infrastructure Partners (GIP) for $12.5 billion in January to broaden its presence in private markets and alternative assets through infrastructure investments worldwide. 

Looking ahead, Fink underlined BlackRock's openness to further opportunities in private markets. However, he did not hint at any imminent deals.

Shares of BlackRock rose by 2.32 per cent in premarket trading, although they have experienced a 3.2 per cent decline this year.

Total net inflows decreased to $57 billion from $110 billion year-over-year, partly attributed to seasonal outflows from institutional money market funds at the end of March. However, analysts anticipate a resurgence in asset management industry flows following potential interest rate cuts.

Exchange-traded funds (ETFs) dominated inflows, boosted by BlackRock's iShares Bitcoin Trust, which garnered $14 billion in net inflows since its January launch.

Overall revenue surged 11 per cent to $4.73 billion in the quarter, driven by higher performance fees, technology revenue, and the impact of increased markets on average AUM. BlackRock's technology revenue rose approximately 10.9 per cent to $377 million, reflecting sustained demand for its Aladdin investment management platform.

Net income for the company climbed to $1.57 billion, or $10.48 per share, in the first quarter, compared to $1.16 billion, or $7.64 per share, in the same period last year.

(With Reuters inputs)