BlackRock's Assets Fall Below $6 Trillion on Market Turmoil

(Bloomberg) -- The brutal stock market took its toll on BlackRock Inc. in the fourth quarter as institutions withdrew money from the firm, pushing assets down from their record level.

The world’s largest asset manager reported assets under management declined 5 percent to $5.98 trillion.

"The year was a year of records, good and bad records," Chief Executive Officer Larry Fink said in a CNBC interview Wednesday. He also noted that market volatility is weighing on the asset management industry. "We’re seeing the seeds of a global slowdown," he said.

Key Insights

  • Big institutional withdrawals hurt BlackRock as firms pulled $34.6 billion from its investment products.
  • Retail investors also pulled out funds. Fourth quarter retail outflows totaled $3.2 billion in the period, their first quarter of outflows since 2016.
  • Overall the flow of money that usually pours into BlackRock slowed. Full-year total net inflows of $124 billion for 2018 -- about 66 percent lower than last year’s record.
  • A bright spot was that investors sought out index products despite volatility. BlackRock’s iShares exchange-traded fund division reported a record $81 billion in inflows for the quarter. U.S. iShares hit back-to-back monthly inflow records in November and December.

Digging Deeper

  • Fink added that a resolution in global trade tensions could result in a surge of investing in 2019. The company has already seen customers putting money to work in January, he said.
  • Last week, BlackRock announced plans to cut 3 percent of its global workforce, or 500 jobs. That’s the firm’s largest round of dismissals since 2016. The firm today reported a $60 million charge for expenses related to that decision.
  • Chief Executive Officer Larry Fink also made some management alterations this month. He named Mark Wiedman, previously the head of BlackRock’s powerhouse exchange-traded funds business, to a new global strategy role. Fink said more leadership changes are coming.

Market Reaction

BlackRock shares fell as much as 1.6 percent in pre-market trading in New York on Wednesday.

Other Key Results

  • Quarterly revenue of $3.43 billion was in line with analyst estimates. It declined 9 percent from the year-earlier period.
  • Adjusted earnings per share of $6.08 for the period missed estimates of $6.28.

Get more

  • See BlackRock’s earnings statement here.

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