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BlackRock Garners More than $5 Trillion in AUM, Beating Estimates

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Dec. 4 2020, Updated 10:53 a.m. ET

Earnings rise, revenue decline

BlackRock (BLK), the world’s largest asset manager, reported its 3Q16 earnings on October 18, 2016. The company beat Wall Street analysts’ adjusted EPS (earnings per share) estimates of $4.98, posting EPS of $5.14.

BlackRock reported net income of $875 million in 3Q16, which is a rise of 4% from $843 million in 3Q15. However, its revenues fell 3% YoY (year-over-year) to $2.8 billion due to lower performance fees. The company’s total assets under management rose to $5.1 trillion, as compared to $4.5 trillion in 3Q15.

BlackRock continued to attract funds in its ETFs and passive investment offerings in 3Q15. The stock rose 0.5% on the earnings announcement.

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Management comments

In a company press release on October 18, 2016, BlackRock Chair and Chief Executive Officer Laurence Fink stated: “BlackRock’s business model was built to thrive in all market environments. In the third quarter, even as investor preferences continued to migrate from equity to fixed income and cash, and away from active strategies, the diversity of our platform drove nearly $70 billion of total net inflows. Our $55 billion of long-term net inflows were positive across both active and index strategies, and positive across every asset class and region.”

BlackRock posted revenues of $11.4 billion in 2015, as compared to the following revenues for its peers:

  • State Street (STT): $2.7 billion
  • JPMorgan Chase (JPM): $51 billion
  • Bank of New York Mellon (BK): $3.2 billion

Together, these companies account for 1.8% of the SPDR S&P 500 ETF (SPY).

Biggest in the world

BlackRock has become the world’s biggest asset manager in just two decades. The company is managing $5.1 trillion in assets for governments, institutions, sovereign wealth funds, and retail clientele. It manages assets through various product offerings such as portfolio investing equities, alternatives, fixed income, and money market instruments across global markets and asset classes.

In this series, we’ll study BlackRock’s ETFs, fund flows, strategic initiatives, outlook, dividends, pricing pressures, and valuations.

Let’s start by analyzing how BlackRock iShares managed to rake in more assets in 3Q16.

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