BlackRock, the world’s largest money manager, has achieved a monumental milestone by surpassing $11 trillion in assets under management (AUM) for the first time. This unprecedented growth, fueled by a robust market rebound and substantial inflows from investors, has propelled the firm’s shares to a new peak.
In the third quarter, BlackRock reported a 15% increase in revenues, climbing to $5.2 billion, significantly exceeding analysts’ expectations. The surge in assets—from $10.6 trillion three months ago to a staggering $11.5 trillion—was largely driven by $160 billion in long-term inflows, alongside an additional $61 billion injected into cash management products.
The market’s performance played a pivotal role in this growth, as the S&P 500 rose by 5.5% during the quarter. Anticipation surrounding potential interest rate cuts by the U.S. Federal Reserve has drawn substantial investments into bond funds, further boosting BlackRock’s results.
Larry Fink, BlackRock’s CEO, expressed optimism for continued growth, stating, “We expect momentum to further build to the year’s end and into 2025. Investors will have to re-risk to meet their long-term return needs.” Fink emphasized the strategic direction of the firm, which blends public and private market investments, viewing them as integral components of a unified market rather than alternatives.
The results exceeded analysts’ forecasts, with adjusted operating income rising by 26% to $2.1 billion surpassing expectations. BlackRock shares closed up 3.6% at a record $990.26, eclipsing previous peaks set in November 2021. The majority of the new capital came from low-cost exchange-traded funds (ETFs) and index products, which remain the cornerstone of BlackRock’s offerings.
In a strategic move, BlackRock recently completed a $12.5 billion acquisition of Global Infrastructure Partners, adding an impressive $116 billion to its AUM and significantly increasing fees from managing private market assets. The firm is also poised to finalize its acquisition of Preqin, a private markets data provider, by the end of 2024.
Fink concluded that while the firm is open to further acquisitions, they remain prudent with capital deployment, stating, “We do not need M&A to meet our growth targets.” The industry sentiment is positive, with analysts noting the firm’s strong performance as a catalyst for future growth.
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