BlackRock has shrugged off a series of ‘anti-woke’ political assaults in its home country to serve up another bumper profit and record assets under management during the final quarter of 2024.
The global investment behemoth reported profits of US$1.6 billion over the three months to December 31, about on par with the previous quarterly results, as the annual net income figure soared 21 per cent year-on-year to almost US$6.4 billion.
As at the end of last year, BlackRock funds under management hit more than US$11.5 trillion – up about US$1.5 trillion on the same date in 2023 as strong markets and net inflows of US$641 billion boosted the asset pool.
More than 40 per cent of the group’s annual net flows came in the final quarter through a gush of US$281 billion plus (including almost US$81 billion in cash management funds), of which roughly half – or US$142.6 billion – ended up in exchange-traded funds (ETFs).
The BlackRock ETF stash increased to US$4.2 trillion by the end of last year from US$3.5 trillion 12 months prior with all asset classes in positive flow territory: investors poured more than US$236 billion into equities, US$112 billion towards fixed income, US$1 billion in multi-asset and US$40.7 billion into alternatives (a category hyper-charged by the launch of the i-Shares bitcoin product last year).
Institutions represent almost US$5.4 trillion of the BlackRock ‘long-term’ (ex cash) money followed by ETFs and retail clients (US$1 trillion).
Over the last 12 months or so the firm, headed by Larry Fink, also splashed out around US$25 billion to purchase alternative asset managers Global Infrastructure Partners and HPS Investment Partners (a private credit specialist) with a further pending US$3.2 billion acquisition of UK-headquartered private markets data provider, Prequin.
Originally due to settle by the end of 2024, the Prequin deal has been held up by UK regulators with a decision expected early in February.
“Our record organic growth and financial results do not yet reflect the full integration or pending acquisitions of the high-growth businesses of GIP, HPS and Preqin,” Fink said in a release. “And we’ve steadily made organic investments ahead of structural trends that we expect to drive outsized growth in the years ahead.”
While asset-based fees represent the bulk of the US$20.4 billion revenue BlackRock scooped up last year, ‘technology services’ – a genre dominated by the group’s risk management platform, Aladdin – contributed US$1.6 billion to the topline.
“Technology services revenue increased $49 million from the fourth quarter of 2023 and $25 million from the third quarter of 2024, reflecting the successful onboarding of a number of new clients,” the report notes. “Technology services annual contract value.. increased 12% from the fourth quarter of 2023, driven by strong demand for a full range of Aladdin technology offerings.”
The 72 year-old Fink also confirmed that Mark Wiedman – BlackRock global client business head and previously among the favourites to succeed the current long-time CEO – would leave the business.
Wiedman joined the manager in 2004, filling various roles over his tenure including an eight-year turn as global head of the iShares ETF and index division.
At the same time, BlackRock has faced intense criticism of late in the US over its professed environmental, social and governance (ESG) investment stance – losing several state government mandates as well as facing a court case (along with Vanguard and State Street) led by the Texas Attorney General alleging collusion to raise coal prices.
The manager has also lost some kudos in NZ, where it is likely the single-largest influence on the KiwiSaver market, after forcing the local solar panel financing operation, SolarZero, into liquidation.
BlackRock had invested about $260 million in SolarZero since acquiring the business via a private equity vehicle in 2022: the same fund also suffered significant losses through its exposure to the now-bankrupted Swedish electric vehicle battery outfit, Northvolt.
In a separate private equity stumble, BlackRock also booked a US$600 million write-down after taking a majority stake in insurance-outsourcing provider, Alacrity, just two years ago, according to a Financial Times report.
A consortium of private credit managers including Antares Capital, Blue Owl Capital, KKR and Goldman Sachs Asset Management have since assumed control of the debt-bloated Alacrity business.