Nick Evans writes that institutional investor demand for ETFs, alternatives, and outsourcing mandates continued to drive net inflows at BlackRock in Q3, despite the worsening market environment causing a further fall in overall assets under management.
The world’s largest asset manager reported USD65 billion of long-term net inflows in the third quarter – with total net inflows of USD17 billion reflecting outflows from cash management and advisory AUM.
Total AUM dipped below USD8 trillion as at the end of September – a fall of USD1.5 trillion, or 16 per cent, from their level of USD9.5 trillion 12 months ago at the end of Q3 2021 – down from USD8.5 trillion at the end of Q2 and a peak of USD10 trillion at the start of this year.
For the year to date, BlackRock has generated long-term net investor inflows of almost USD250 billion in the face of the increasingly difficult market and economic conditions – with institutional and ETF inflows leading the way.
However, the changed market and macro environment has taken its toll on the firm’s financial results – with revenue, operating income, net income, and earnings per share suffering year-on-year falls of 15 per cent, 21 per cent, 16 per cent, and 15 per cent respectively.
“The power of our diversified platform is most evident in times of uncertainty, and clients are turning to us more than ever,” said BlackRock chairman and CEO Larry Fink in a statement.
“We once again saw strong growth in bond ETFs, with USD37 billion of net inflows. Active strategies reflected momentum from significant outsourcing mandates and continued demand for alternatives, where we raised USD8 billion across commitments and net inflows.”
As at the end of September, ETFs accounted for 33 per cent of the firm’s AUM. Active and index institutional products represented 48 per cent, with retail and cash management comprising around 10 per cent each,
Despite the continued growth in both illiquid and liquid alternative products to more than USD250 billion as at the end of the third quarter, alternatives only represent some 3 per cent of BlackRock’s overall assets under management.
“Our wide range of investment offerings, leading technology platform, whole portfolio approach and global insights are resonating deeply as clients seek partners to help them build stronger, more resilient portfolios that meet their long-term investment goals,” said Fink.