In another record-breaking run, BlackRock, tipped the scales above US$10 trillion for the first time in 2021 as market performance combined with net flows of US$540 billion.
Larry Fink, BlackRock chief, said the 2021 results – released last week – represented “the strongest organic growth in our history, even as our assets under management reached new highs”.
And, somewhat surprisingly, the global trend towards passive investing only accounted for about half of the flows last year.
“We generated $540 billion of net inflows in 2021, including an industry leading $267 billion of active net inflows,” Fink said.
“Our business is more diversified than ever before – active strategies, including alternatives, contributed over 60% of 2021 organic base fee growth. Our industry-leading iShares ETF platform remained a significant growth driver with record flows of $306 billion. And our technology services businesses, powered by Aladdin, delivered $1.3 billion in revenue with ACV [annual contract value] up 13% year over year.”
Almost half (US$212 billion) of the annual BlackRock net flows came in the December 2021 quarter alone, led by US$104 billion of exchange-traded fund (ETF) money.
During the final quarter and 12-month period, institutional investors backed away from BlackRock passive strategies – mostly in equities – with respective net index outflows of US$40 billion and US$118 billion in favour of active investments.
Institutions piled in US$84 billion into BlackRock active investments over the December quarter and US$169 billion during the calendar year.
“Active strategies contributed over 60% of our annual organic base fee, and our growth is significantly outpacing that of our peers and the broader industry as we take market share in this fragmented landscape,” Fink said.
The Nasdaq-listed investment firm reported annual revenue of about US$5.1 billion and a net profit of more than US$1.6 billion.
“Our record results across each of our strategic priorities demonstrate the benefits of continually investing in our platform over years ahead of our clients’ needs, and the tireless commitment of our employees,” Fink said. “Our strategy is resonating – we’re building deeper partnerships with our clients and other stakeholders, and delivering durable returns for our shareholders.”
Last year BlackRock developed ‘deeper partnerships’ with both AMP and ASB in NZ, giving the New York-headquartered manager influence over roughly NZ$30 billion of KiwiSaver and other investments.
Based on its 2021 numbers, BlackRock manages about 10 per cent of the entire global funds market, which rose above US$100 trillion last year, according to the Boston Consulting Group.
Vanguard, the second-biggest fund manager in the world, reported assets under management of about US$8.4 trillion near the end of 2021.