BlackRock sets record with $8.7 trillion in AUM

BlackRock's assets under management hit a record $8.68 trillion in the quarter ended Dec. 31.

Data from BlackRock's earnings report released Thursday showed that AUM run by world's largest money manager's rose 11.1% over the prior three-month period and 16.8% compared to the same date a year earlier.

The firm's asset growth in the fourth quarter, which included $126.9 billion in net inflows, was attributed to "strong performance from our entire active (investment) franchise along with near-record inflows" from the firm's iShares ETF unit, said Gary F. Shedlin, BlackRock's chief financial officer, during an analyst call Thursday.

BlackRock's fourth quarter net inflow trailed the $128.7 billion in the prior quarter and the $128.8 billion net inflow in the quarter ended Dec. 31, 2019.

Mr. Shedlin said the firm's broad investment categories all produced net inflows in the fourth quarter.

The breakdown of BlackRock's net inflows in the quarter ended Dec. 31 were led by iShares, $78.8 billion (prior quarter, $41.3 billion); retail investors, $35.3 billion ($19.6 billion); cash management, $8.9 billion ($27.8 billion); and advisory, $1.8 billion ($3.3 billion).

The decline in the quarter ended Dec. 31 in BlackRock's institutional net inflow to $2.1 billion down from $36.7 billion in the quarter ended Sept. 30 was the result of "several large clients" reallocating out of equities "after significant market gains or tactically shifted assets fixed income and cash," Mr. Shedlin explained on Thursday's call.

He noted that a large U.S. public pension fund changed its asset allocation and will move about $55 billion of low-fee index assets to another manager in the first half of 2021.

"While this transaction will result in a significant net asset outflow, it will have a de minimis impact on our organic base fee for the year," Mr. Shedlin said.

Mr. Shedlin did not identify the BlackRock clients during the call.

In a response to an analyst question about regulatory matters and money manager scale, Laurence D. "Larry" Fink, BlackRock's chairman and CEO, told analysts on Thursday's call that "the size of our footprint and AUM" is due to the firm's commitment to "strong global capital markets."

Mr. Fink said "an interesting point" relative to the query is that BlackRock managed a little under 2% of global markets in 2009 and now manages a little over 2% of the world's markets.

"The notion that the investment management industry is not regulated is a myth. It's not true," Mr. Fink said, noting that "the investment management industry is very fragmented."

"We need regulators around the world and have encouraged regulation to ensure functioning capital markets," he said.

Regarding profitability, BlackRock's net revenue in the quarter ended Dec. 31 was $4.5 billion, up 2.5% from the prior quarter and up 12.6% from the same quarter a year earlier. Net income totaled $1.5 billion in the fourth quarter 2020, an increase of 13.5% vs. the previous quarter and up 19% for the three-months ended Dec. 31, 2019.