BlackRock Inc. ended the fourth quarter with a sharp rise in client cash, with its earning per share increasing by 10%, showing how the world’s largest asset manager is using strong inflows and recent acquisitions to deepen its reach beyond traditional investing.
The firm pulled in $342 billion of total client cash in the quarter, pushing its assets under management to a record $14 trillion.
The milestone comes as BlackRock integrates a string of deals and expands deeper into private markets, while still drawing steady demand into its mainstream long-term funds and ETFs.
ETF inflows stay a core driver
Investors added $268 billion on a net basis to BlackRock’s long-term investment funds during the quarter. A large share of that came from the company’s exchange-traded fund segment, which attracted $181 billion.
BlackRock said its ETF business now totals $5.5 trillion overall, keeping it at the centre of the firm’s growth story.
The firm’s fourth-quarter results also helped lift total annual inflows, including money-market and cash-management funds, to $698 billion, setting a new record.
Citi mandate boosts managed assets
Net flows into BlackRock’s long-term investment funds came in stronger than expected, signalling continued demand across its core product range.
The quarter also included a major outsourcing mandate, further strengthening the firm’s scale and client reach.
Citigroup Inc. handed BlackRock about $80 billion of investment assets tied to the bank’s wealthy clients, marking one of the biggest outsourcing deals in the industry.
The move reflects how large financial institutions are leaning on asset managers with broad product line-ups and operational capacity to handle large pools of client money.
Earnings beat as spending rises
BlackRock reported adjusted earnings per share of $13.16 for the quarter, up 10% from a year earlier. The result came in above the average analyst estimate of $12.28.
Revenue jumped 23% from the year-ago quarter to $7 billion, as rising assets and fee-generating products supported growth.
Operating expenses rose to $5.3 billion, reflecting higher costs as BlackRock continues to invest heavily in expansion.
Private markets and data strategy widens
BlackRock is in the midst of reshaping itself from a dominant public markets manager into a leading player in private credit and infrastructure markets globally.
Chief Executive Officer Larry Fink has spent about $28 billion buying Global Infrastructure Partners, HPS Investment Partners, and Preqin Ltd., forming one of the company’s biggest acquisition waves.
BlackRock has been integrating these businesses after the acquisitions, which wrapped up in July with the completion of the deal to buy credit firm HPS.
The firm is also unveiling new products aimed at wealthy retail investors and defined-contribution retirement plans such as 401(k)s, expanding its reach beyond institutional clients.
During the quarter, BlackRock took in $15.6 billion in liquid alternative and private assets, reinforcing its broader shift into private markets strategies.
Shares of BlackRock rose 13.4% over the past 12 months through Wednesday, trailing the S&P 500’s 18.6% gain.
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