BlackRock had assets under management of $3.659 trillion as of June 30, up 0.3% from the prior quarter and 16% higher than the year before, according to the company's second-quarter earnings report Wednesday.
For the latest quarter, BlackRock reported roughly $8.5 billion in net inflows for its long-term investment strategies, after accounting for $9.9 billion of outflows related to client concerns about parking too much of their assets with a single manager following BlackRock's December 2009 acquisition of Barclays Global Investors.
In a conference call detailing second-quarter results, Laurence D. Fink, BlackRock's chairman and CEO, said the $9.9 billion outflow should be the last notable merger-related outflows to report.
Otherwise, the firm's more than $8 billion in net gains reflected inflows for BlackRock's multiasset-class offerings and iShares equity and fixed-income ETFs more than offsetting continued outflows for the firm's active quantitative equity strategies and institutional bond index strategies.
Net inflows for BlackRock's multiasset-class offerings, which include its fiduciary outsourcing capabilities, came to $20.7 billion, and more than $6 billion apiece for equity and bond ETFs, as well as $4.2 billion in active fixed income and $1.4 billion in institutional equity index strategies. Institutional bond index strategies saw $10.5 billion in net outflows, active quant equity strategies lost $8.9 billion, and alternative strategies lost $1.3 billion in outflows.
However, on the conference call, Mr. Fink said the performance turnaround for BlackRock's long-suffering “scientific” active quant strategies has been dramatic this year — in line with a broader upturn being enjoyed by quantitative managers — setting the stage, he predicted, for a return to net inflows over the coming years.
Elsewhere, $9.9 billion in money market outflows and $14.1 billion in drawdowns on government-owned assets BlackRock has managed in the wake of the recent global financial crisis were offset by $12.1 billion in market-related gains and $14.2 billion in foreign-exchange related gains, leaving the firm with a 0.3% gain in assets for the quarter.
Mr. Fink noted that growing concerns about political and economic uncertainties around the globe in May and June have caused “confusion, uncertainty and ultimately retrenchment” by investors. Amid that uncertainty, and a resulting pickup in volatility, a number of clients “have capitulated,” trimming their allocations to risky assets, a decision Mr. Fink said he has tried to discourage. “Many customers are derisking … focusing on today's headlines. I think this is a mistake,” he said.
For the quarter, BlackRock reported net income of $619 million, up 9% from the prior quarter and 43% above the year before.
Revenues, meanwhile, came to $2.3 billion, up 3% from the prior quarter and 16% higher than from the year before.
Separately, Northern Trust on Wednesday reported $684.1 billion in assets under management in the second quarter, 3.3% above the previous quarter and up 13% from a year earlier.
Net income stayed relatively flat at $152 million for the second quarter of 2011 compared with $151 million in the previous quarter, but was down 24% from the second quarter of 2010.
Assets under custody remained at the $4.4 trillion reported in the previous quarter but were up 24% from a year earlier.
Consolidated revenue totaled $944.8 million for the quarter, up 5.2% from the previous quarter but down slightly from the $964.2 billion in revenue in the second quarter of 2010.
