By Jaiveer Shekhawat and Carolina Mandl
(Reuters) -BlackRock Inc on Friday beat second-quarter profit estimates, as investors continued to pour money into its various funds on the back of a rally in markets after a bruising start to the year.
Markets have staged a comeback so far this year, braving the Federal Reserve’s rate hikes and a banking crisis that have raised risks of an economic downturn later in 2023.
The New York-based firm ended the second quarter with $9.4 trillion in assets under management (AUM), up from $8.5 trillion a year earlier and $9.1 trillion in the first quarter.
Revenue at BlackRock fell 1.4% to $4.4 billion from a year earlier, driven by the impact of market movements over the past 12 months on average AUM, it said.
“Revenue growth was tepid and could remain pressured in the near-term until there is more clarity on the path of inflation and economic growth,” said Kyle Sanders, senior equity research analyst at Edward Jones.
Net inflows for the quarter for BlackRock were at $80 billion, down from $89.6 billion a year ago.
The world’s largest asset manager, which makes most of its money from fees charged for investment advisory and administration services, saw a 25% rise in its second-quarter adjusted profit, helped by gains in its private equity investments.
The company’s adjusted profit of $9.28 per share leapfrogged analysts’ estimates of $8.46, according to Refinitiv IBES.
Larry Fink, BlackRock’s chairman and chief executive officer, said in a statement that clients have consolidated more businesses with the firm that helped boost ETF inflow.
Fink in an investor event last month said that he is not planning to leave the asset manager “any time soon”.
The company also last month laid off employees impacting less than 1% of its total workforce due to budget reallocations to support critical priorities. It had cut 500 jobs earlier in the year as well.
BlackRock has been attempting to enter into the crypto space as it seeks the Securities and Exchange Commission’s permission to list an exchange-traded fund that will reflect the price of bitcoin.
(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Maju Samuel and Chizu Nomiyama)
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