BlackRock (BLK.US) Beats Q2 Earnings Estimates, Asset Management Size Sets New Record

BlackRock(BLK.US) reported second-quarter 2024 earnings. The world's largest asset manager reported net long-term fund flows of $51bn, taking its assets under management to a record $1.065tn.

In a statement on Monday, BlackRock said second-quarter ETF flows were $83bn and fixed income flows were $35bn. Net long-term fund flows were below the average analyst estimate of $86bn.

Chief executive Larry Fink said in a statement: "Organic growth was driven by private markets, small active fixed income, and record inflows into our ETFs, which is the best year start ever."

Over the period, the company had net inflows of $30bn in cash management and money market funds. Total net inflows were $82bn.

Adjusted earnings per share rose 12% quarter-on-quarter to $10.36, beating consensus estimates of $9.96. Revenue rose 8% to $4.8bn.

After two years of Fed rate hikes and bond market volatility, funds are rebounding. The S&P 500 rose about 4% in the second quarter after rising about 10% in the first quarter, as investors bet the Fed will begin to cut rates from a 40-year high in September.

This has driven inflows into fixed income funds, as managers say the risk of holding money market funds long-term is that they may not be able to deliver a 5% yield once rates fall.

BlackRock positions itself as a one-stop shop, offering active management ETFs, index ETFs and mutual funds, while seeking to expand its business in the fast-growing and lucrative private assets space. The company's $12.5bn acquisition of Global Infrastructure Partners will add about $100bn of assets to the company and put it at the forefront of infrastructure investors.

Last month, BlackRock also announced the $2.55bn acquisition of private market data company Preqin. Fink and other executives said Preqin would allow BlackRock to "index the private markets" and use data and analytics to broaden the investment opportunities in alternative assets.

Finally, BlackRock said it would repurchase $5bn of stock in the current quarter.

As of Friday's close, BlackRock shares have risen about 2% year-to-date, lagging the S&P 500's 18% rise. The stock was up 0.81% at $834.66 at Monday's opening trade, according to data from Refinitiv.