BlackRock’s revenues drop as investors move into passive

The world’s largest asset manager Blackrock has released its third quarter (Q3) results and seen its revenues drop by almost 3% year-on-year as investors move away from active strategies.

But the US giant did see its total assets under management rise by 5% since Q2 to $5.1 trillion (€4.6 trillion), with revenues broadly flat during the same time frame.

Lawrence Fink, chairman and chief executive of BlackRock, said: “In the third quarter, even as investor preferences continued to migrate from equity to fixed income and cash, and away from active strategies, the diversity of our platform drove nearly $70 billion of total net inflows.”

The firm’s net income rose by 3.8% year-on-year to $875 million. The reported revenue increase comes after a cost-cutting exercise was announced earlier this year that includes the planned culling of 400 jobs.

While BlackRock saw $2.2 billion of outflows from its higher margin active retail strategies in Q3, the firm’s passive offering, iShares, continues to accumulate assets, gathering a further $51.3 billion during the same time period, albeit at a lower margin.

BlackRock has shown resilience in what has been a tough market for asset managers. Its adjusted diluted earnings per share of $5.14 came in ahead of analyst expectations of $5 a share.

©2016 funds europe

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