BlackRock's assets under management hit a record high for the third straight quarter on Friday, helped by surging inflows to the company's exchange-traded funds and a searing equity rally that boosted the value of its clients' investments.
Stock markets overcame an August sell-off and broadened their rally in the third quarter, driven by renewed hopes of a soft landing for the world's largest economy after encouraging inflation data.
Assets managed by BlackRock shot up to $11.48 trillion in the third quarter, compared with $9.10 trillion a year earlier and $10.65 trillion in the second quarter.
"Our strategy is ambitious, and our strategy is working," Larry Fink, chairman and CEO, said in a statement.
Last week, the New York-based firm completed its $12.5 billion acquisition of Global Infrastructure Partners, adding over $100 billion in assets to its kitty. Later this year, it is expected to close its $3.2 billion acquisition of private markets data provider Preqin.
The two deals are expected to bolster the world's largest asset manager's presence in infrastructure investments and in private markets, both key areas of growth.
"We're already seeing the power of BlackRock and GIP together as we drive access to the enormous investment potential of infrastructure, especially to support AI innovation," said Fink. "Our planned acquisition of Preqin will enhance data and risk analytics needed to support growing private markets allocations," he added.
BlackRock registered $160 billion in long-term net inflows in the third quarter. Total net inflows hit a quarterly record of $221.18 billion, up from $2.57 billion a year ago. A majority of the long-term inflows were captured by ETFs, at $97.41 billion. Clients poured in $62.74 billion into BlackRock's fixed-income products.
Asset managers have contended with softer inflows in recent years as interest rate hikes boosted the appeal of safe-haven assets like cash. Some investors also sat on the sidelines, waiting for more certainty on the interest-rate trajectory, before stepping back into riskier assets.
But with the U.S. Federal Reserve kicking off its long-anticipated easing cycle, asset managers are poised to benefit as huge piles of cash on the sidelines are expected to move into riskier assets such as fixed-income products.
Equity market benchmarks finished higher in the third quarter, with the S&P 500 gaining 5.4%, while the MSCI's gauge of stocks across the globe rose 6.2%.
BlackRock's net income rose to $1.63 billion, or $10.90 per share, in the three months ended Sept. 30, from $1.60 billion, or $10.66 per share, a year earlier.
Its shares have advanced about 18% in 2024 as of last close, trailing the 21% jump of the S&P 500.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Pooja Desai and Mark Potter)