On Wednesday, BlackRock’s (BLK.N)executives told analysts that the firm’s diversified business model could help it weather a difficult year for asset managers, although they warned against potential fee pressures.
Investors poured money into BlackRock’s different index-traded and active funds, helping the world’s largest asset manager earn a better-than-expected quarterly profit.
In the three months ended March 31, adjusted profit increased to $1.46 billion, or $9.52 per share, up from $1.2 billion, or $8.04 per share, a year earlier. According to Refinitiv IBES data, analysts predicted a profit of $8.75 per share on average.
“The successful multi-year investments have allowed us to enhance and diversify our organic revenue growth profile while also deepening our solutions-oriented partnerships with clients,” said Chief Financial Officer Gary Shedlin.
According to Shedlin, BlackRock expected that recent market volatility will result in decreased fees from liquid alternatives and long-only products for the rest of the year.
Despite the positive findings, BlackRock’s stock rose modestly to $717 in morning trading following the announcement. In the first quarter, they dropped about 17%.
Higher investment advice and administration fees boosted total revenue by nearly 7% to $4.69 billion. In comparison, $4.73 billion was predicted.
Traditional asset managers have been struggling to adjust to a rapidly changing macroeconomic environment marked by rising inflation, interest rate hikes, and fears of a possible recession since the beginning of the year, which has been exacerbated by Russia’s “special military operation” in Ukraine.