Reports
BlackRock's Income Slumps While Assets Remain Relatively Stable
BlackRock, the US asset manager part-owned by Merrill Lynch, reported a net GAAP income of $84 million for the first quarter of this year, down 65 per cent from $241 million for the same period a year before.
Revenues for the first three months of 2009 were $987 million, down from $1.064 billion in the fourth quarter of 2008, and $1.3 billion for the first quarter of 2008. BlackRock’s operating income for Q1 2009 was $271 million, falling from $396 million a year before - a 32 per cent decline.
Market-driven declines in assets under management explain period-over-period changes in revenues and operating income, the firm said in a statement.
BlackRock said its assets under management ended the first quarter of 2009 at $1.283 trillion, a decline of 2 per cent since the end of 2008, and down 6 per cent year-on-year. In the twelve months to 31 December 2009 the MSCI World Index, a broad index of developed markets equities, dropped by 40 per cent.
Net new business totalled $5.6 billion during the first three months of this year and $138 billion over the last twelve months. Favourable organic growth was overwhelmed by combined market and foreign exchange-related declines of $29.4 billion and $219.1 billion in the first quarter and last twelve months, respectively, the firm said.
New business during 2009’s first quarter included $21.3 billion of net inflows in long-dated and advisory mandates - $3.3 billion derived from retail and high net worth clients, and the remainder from institutional investors. Inflows were however offset by $15.7 billion of outflows in cash management products, BlackRock said.
“As we anticipated last quarter, lagging real estate and private equity markets began to catch up, and declining net asset values in these products hurt both our clients and our balance sheet, with the adverse impact to us reflected in our income statement,” said Laurence Fink, chairman and chief executive of BlackRock.
“We entered the second quarter with a strong pipeline of new business wins, an increase in search activity, competitive performance across many products, and strong demand for our BlackRock Solutions and advisory capabilities. We remain cautious but optimistic on the environment, and dedicated to helping our clients navigate these uncharted waters,” he added.
