BlackRock reported a 15.9% year-over-year decline in assets under management in the third quarter of 2022, eased by ETF inflows.
Specifically, AUM totaled about $7.96 trillion at the end of the third quarter of 2022, down from about $9.46 trillion at the end of the year-ago third quarter, BlackRock said in a Thursday release.
The third quarter AUM represented a 6.2% drop from the $8.49 trillion recorded at the end of the second quarter of 2022.
Net market losses and foreign-exchange rate movements reduced end-of-third-quarter AUM by $401.8 billion and $141.1 billion, respectively, from the end of the second quarter.
Long-term net inflows amounted to $65.21 billion in the third quarter of 2022. By client type, exchange-traded funds saw $22.37 billion of net inflows in the quarter, retail had $4.89 billion net outflows, while institutional witnessed net inflows of $47.73 billion.
By product type, equity products saw net outflows of $29.28 billion in the third quarter, alternatives suffered net outflows of $6.18 billion, while fixed income and multiasset products had net inflows of $90.62 billion and $10.06 billion, respectively, in the third quarter.
By comparison, BlackRock had recorded long-term net inflows of $90 billion in the second quarter of 2022, and long-term net inflows of $98 billion in the third quarter of 2021.
With respect to earnings, third quarter 2022 revenue dropped by 15% year over year, "primarily driven by the impact of significantly lower markets and dollar appreciation on average AUM and lower performance fees," the firm said in the release.
Third quarter revenue declined by 4.8% from the second quarter.
Third quarter net income attributable to BlackRock declined 16.4% year over year, partly reflecting a "lower effective tax rate and a lower diluted share count," the firm added in the release. However, third quarter net income attributable to BlackRock jumped by 30.5% from the second quarter.
"Market conditions remain very challenged in the third quarter with global equity and debt market ending down 25% and 14%, respectively, for the first nine months of 2022," said Gary Shedlin, chief financial officer, according to a transcript of a Thursday morning earnings call with analysts. "In total, these market declines along with significant dollar appreciation against major currencies, reduce the value of BlackRock's rocks assets under management by over $2 trillion since December 31."
Mr. Shedlin added in the call: "While we continue to have deep conviction (in) our strategy and the long-term growth of the global capital markets, we have begun to more aggressively manage the pace of certain discretionary (spending). We are continuing to pursue critical hires that support our near-term growth. But (we) our pausing the balance of our hiring plans for the remainder of 2022."
Regarding BlackRock's ETFs business, Mr. Shedlin noted that bond ETFs generated $37 billion in net inflows in the third quarter, the second best quarter in the firm's history. "We're not only leading the bond ETF industry in terms of AUM and net new business market share, but we're working with all stakeholders to grow the bond ETF industry itself," he added. "It took 17 years for the (bond ETF) industry to reach $1 trillion in 2019, it is now closing in on $2 trillion, and we believe that the industry will be at $5 trillion before the end of the decade with BlackRock leading that significant growth."
