BlackRock close to break $8trn AuM threshold

On the 10/13/20 at 1:28PM


Adrien Paredes-Vanheule

Fixed income products have drawn most of the $128.7bn net inflows recorded by the US investment manager in the third quarter of 2020.

The world's largest asset management company BlackRock has ended the third quarter of 2020 with $7.80trn in assets under management, up 7% quarter-on-quarter, according to its Q3'20 earnings published on Tuesday. The US investment manager boarded a total $128.7bn in net new money over the quarter, including $97.6bn in long-term flows. This suggests that the firm has achieved more than half of its inflows so far this year ($264bn) over Q3'20 solely.

Asian Pacific and EMEA investors accounted for around half ($47bn) of the $98bn long-term flows while US investors formed the remaining $41bn. BlackRock's iShares business has recorded $41.3bn in net new money (vs. $51bn in Q2'20), its institutional business $36.7bn (vs. -$5bn in Q2'20) and its retail business $19.6bn (vs. $16.7bn in Q2'20). 

Most net new cash went into fixed income products ($70.4bn), of which more than half ($31.5bn) in iShares non ETF index products, $19.7bn in active ETFs and index funds on the asset class as well as $19.2bn in active fixed income funds. BlackRock only recorded $2.2bn in its equity products, where it faced a $22.4bn net redemption in iShares non ETF index equity products. The US manager also stressed net inflows of $14bn and $11.1bn in multi-asset and alternative products respectively.

Investment advisory, administration fees and securities lending revenue rose to $3.2bn (+$259m qoq). BlackRock explained this was primarily driven by organic growth and the positive impact of market beta and foreign exchange movements on average AUM, partially offset by the impact of strategic pricing changes to certain products.

Performance fees increased $411m yoy and $420m qoq. However, BlackRock said this was primarily reflecting "strong performance from a single hedge fund with an annual performance measurement period that ends in the third quarter." Tech services revenues increased $23m yoy but only $4m on a quarterly basis. Furthermore, advisory and other revenue dropped $20m yoy but gained $3m over Q3'20.

BlackRock's adjusted operating income amounted to $4.4bn at the end of Q3'20 with a net income of $3.7bn attributable to BlackRock. Its operating margin was 44.3% v 43.7% the year before.