BlackRock’s assets reach new $13.5T high as private markets, ETFs drive growth

view original post

CEO Larry Fink highlights ETF and alternatives growth in quarterly results, with new acquisitions and digital asset offerings contributing to higher revenue and expenses.

BlackRock reported record assets under management of $13.5 trillion at the end of the third quarter, as the world’s largest asset manager benefited from robust inflows into exchange-traded funds, private markets, and cash strategies.

The New York-based firm saw $205 billion in net inflows for the quarter, with its iShares ETF business surpassing $5 trillion in assets for the first time.

The firm’s latest results reported Tuesday highlight a period of broad-based growth, with net inflows into long-term investment funds totaling $171 billion – outpacing analyst expectations. The company’s adjusted earnings per share rose 1% year-over-year to $11.55, beating consensus forecasts, while revenue climbed 25% to $6.5 billion. On a GAAP basis, diluted earnings per share were $8.43, reflecting acquisition-related expenses tied to recent deals.

Growth was especially strong in the firm’s ETF and alternatives businesses. Investors added $153 billion on a net basis to stock, bond, and other ETFs, reflecting continued demand for low-cost, index-tracking products.

Meanwhile, BlackRock’s alternatives platform – which includes private credit, real estate, and infrastructure – expanded to $663 billion in client assets, nearly doubling from $334 billion a year earlier. The company’s acquisition of HPS Investment Partners, completed at the start of the quarter, added $165 billion in assets and further cemented BlackRock’s push into private markets.

Performance fees, driven largely by private markets, rose about one-third to $516 million. However, the expansion into alternatives and the integration of new acquisitions also pushed expenses higher. Operating expenses reached $4.55 billion, exceeding analyst estimates, with employee compensation and benefits rising to $2.4 billion as BlackRock integrated staff from HPS and Global Infrastructure Partners .

Chief executive Larry Fink described the quarter as one of the firm’s strongest for flows, highlighting the diversity of growth across ETFs, private markets, digital assets, and outsourcing.

“That growth is even more notable in its diversification. Top organic base fee growth contributors included our systematic franchise, private markets, digital assets, outsourcing, cash and iShares ETFs, which saw record demand,” Fink said in the earnings statement. He added that BlackRock’s “multiple sources of growth differentiate us and are resonating through accelerating client activity across our platform” .

The firm’s technology and digital assets business also contributed to growth, with technology services and subscription revenue up 28% year-over-year.

Earlier this month, BlackRock unveiled a new AI-driven auto-commentary feature for advisors on its Aladdin Wealth platform, with Morgan Stanley signing on as the first enterprise client. 

Both Fink and chief financial officer Martin Small told analysts that BlackRock is investing heavily in digital asset technology, aiming to eventually allow investors to access long-term investments via blockchain. Small noted that some of the firm’s current offerings, including a Bitcoin ETF and an Ethereum ETF, were top contributors to organic fee growth in the quarter.

Despite the positive momentum, BlackRock’s net income on a GAAP basis fell 19% to $1.32 billion, reflecting higher costs tied to acquisitions and integration. The company’s operating margin, as adjusted, was 44.6% for the quarter, compared with 45.8% a year earlier .

Looking ahead, BlackRock is targeting further expansion in private markets, with a stated goal of raising $400 billion in additional capital by 2030. Fink said the firm is “entering our seasonally strongest fourth quarter with building momentum and a fully unified platform.”

Shares of BlackRock have risen 14% this year, outperforming the S&P 500 Index over the same period.