BlackRock had client assets of $3.35 trillion as of Dec. 31, with the company’s Dec. 1 acquisition of BGI and its $1.85 trillion in assets helping boost BlackRock’s assets under management 133% from the prior quarter and 156% from the year before, the company reported today.
If BlackRock had owned BGI for all of 2009, the company said its assets would be up 5% from the prior quarter and 24% higher from the year before.
In a conference call discussing the company’s latest earnings, Laurence D. Fink, BlackRock’s chairman and CEO, said the integration of BlackRock and BGI is proceeding smoothly, with the company “as well positioned as any investment manager in the world” to meet the evolving needs of clients over the coming years.
Client inflows for the quarter came to $82 billion, with $84.7 billion into long-dated mandates offset by $2.5 billion in distributions on distressed advisory portfolios BlackRock was tapped by the federal government to oversee, and $200 million in money market outflows.
U.S. and Canadian investors accounted for $38.9 billion of those long-term inflows, as well as an additional $9.1 billion of inflows into BlackRock’s cash management products. International clients accounted for $43.2 billion of long-dated inflows but $9.2 billion of outflows from cash products.
By client segment, institutional investors globally accounted for $49.3 billion of net new business for the quarter, with another $11.6 billion coming from retail and high-net-worth clients. Net inflows into iShares, the ETF business BlackRock acquired with BGI, totaled $21.2 billion.
By asset class, BlackRock said it ended the year with $1.54 trillion in equity assets, up $100.3 billion for the quarter, including $33.2 billion in net inflows. Index and ETF products saw the bulk of those inflows, with $46.1 billion into index products, of which iShares accounted for $13.2 billion, offset by $12.9 billion in outflows from active quantitative, or “scientific,” equity strategies.
Fixed-income AUM ended the quarter at $1.06 trillion, up $44.6 billion during the quarter. Inflows accounted for $42.9 billion of that total, of which index strategies saw $28.7 billion while $14.2 billion went into active strategies.
For the first time, BlackRock broke out its multiasset-class AUM separately, at $141.7 billion, up $7.7 billion for the quarter. Net inflows for the quarter came to $4.8 billion.
Assets in BlackRock’s alternative strategies, meanwhile, came to $102.1 billion, up $800 million from the prior quarter, lifted by net inflows of $1 billion.
Cash management strategies ended the year with $349.3 billion, with net outflows of $200 million.
Mr. Fink said BlackRock’s pipeline of wins this year that have been committed or already funded came to $38 billion as of Jan. 21, including $25.7 billion for fixed income, split equally between active and passive strategies, and $6 billion in equities, reflecting $9 billion in passive wins offsetting $3 billion in fundamental equity outflows. During its earnings call for the quarter ended Sept. 30, prior to the BGI acquisition, BlackRock said its pipeline as of Oct. 15 had totaled $42.5 billion.
Demand for passive strategies and ETFs should continue to outpace demand for active strategies in 2010, but with clients increasingly exploring “the intersection of beta and alpha,” BlackRock is well positioned for the trends likely to prevail over the coming years, Mr. Fink said.
He said BlackRock remains committed to further strengthening its overseas operations, with the firm looking to invest more in markets such as Latin America and Asia.
BlackRock reported net income of $256 million for the fourth quarter, down 19% from the prior quarter amid integration costs for the merger but up 392% from the year before.
Revenues for the quarter came to $1.544 billion, up 35% from the prior quarter and up 45% from the year before.