BlackRock AUM tumbles 12.9% in first quarter

Updated with correction

BlackRock's assets under management totaled $6.47 trillion in the quarter ended March 31, down 12.9% compared to the prior quarter, the firm's first-quarter earnings report released Thursday showed.

For the year ended March 31, BlackRock's AUM was down 0.8%.

The firm's revenue took a knock in the quarter ended March 31, down 6.7%, but was up 10.9% from the same quarter a year earlier, according to the firm's earnings release.

Total net flow of $35 billion in the quarter ended March 31 was buoyed by strong net inflow of $52.4 billion into the firm's cash management strategies, which was a new quarterly high, said Laurence D. "Larry" Fink, chairman and CEO, during the firm's earnings call.

Mr. Fink said much of the net inflow into cash came from investors who were derisking their assets during turbulent market conditions in the first quarter. Some of that net inflow was from institutional investors that moved a total of $40 billion from indexed strategies, Mr. Fink said.

In addition to cash, the first quarter net flows included net outflow of $18.7 billion in long-term funds with the breakdown by strategy: iShares with net inflow of $13.8 billion; retail investors, net outflow of $1.5 billion; and institutional investors, net outflow of $31 billion.

Also included in the total quarterly net flow number was $1.2 billion of assets from the Federal Reserve Bank of New York’s new primary and secondary market corporate credit facilities, said Gary Shedlin, BlackRock's chief financial officer, during the earnings call. BlackRock’s financial markets advisory unit was appointed by the Fed to manage the facilities in March.

In contrast, BlackRock's net flow for the year ended March 31 totaled $399 billion, with positive net inflow for all categories.

Long-term strategies had net inflow of $258 billion, with $166.6 billion from iShares; $76.3 billion from institutional investors; and $15.1 billion from retail investors. Cash management had net inflow of $139.9 billion and assets managed for the Federal Reserve’s corporate credit facilities were $1.2 billion.

Among other highlights in the first quarter, Mr. Fink spotlighted $7 billion of net inflow to BlackRock's array of illiquid alternatives strategies. Total alternatives net flow in the first quarter was $9.2 billion.

Other bright spots included net inflow of $4.4 billion into the firm's multiasset funds and $3.2 billion of net inflow into equities, he said.

Fixed-income strategies took the biggest hit among BlackRock's asset classes in the quarter ended March 31, with net outflow of $35.4 billion, the earnings report showed.

Salim Ramji, BlackRock's head of ETFs and index investing, told analysts on the call that much of the net inflows to ETFs was from "more pension funds, asset managers and insurance companies investing in fixed-income ETFs in the quarter." He noted that "ETFs are becoming an essential tool for fixed-income investing."

Mr. Samji also said that the firm's family of sustainable ETFs experienced record high net inflow of $10 billion in the quarter, raising BlackRock's sustainable indexed and ETF assets to $40 billion.