BlackRock, Inc. (NYSE:BLK) Delivered 9% Organic Fee Growth for the Third Quarter

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BlackRock, Inc. (NYSE:BLK), the world’s largest asset manager, stock rose 1.16% (As on Oct 14, 11:46:00 AM UTC-4, Source: Google Finance) after the company’s adjusted net income rose 19% to $1.69 billion. BlackRock has ended the past quarter with $9.46 trillion in assets under management, up from $7.81 trillion a year earlier, but about flat from the second quarter of this year. Some analysts had expected the investment giant to top $10 trillion in assets. The firm delivered 9% organic fee growth for the quarter, its sixth straight quarter in excess of their 5% target. The organic growth was broad-based, spanning the active platform as well as in each of the ETF product categories. BlackRock is at the forefront of asset managers steering their clients to invest via ESG metrics. The company is pressing for greater disclosure by companies in China as global investors move more money into the country.

With their dominant presence in exchange traded funds and mutual funds, large asset managers are seen facing a tougher regulatory environment. The IMF recently called for better global regulation of investment funds to stem the threat of asset fire sales during periods of market stress. Long-term investment flows, a metric that excludes cash management, came in at $98bn. This represented an organic base fee growth of 9 per cent and BlackRock said it was “driven by broad-based growth spanning the active platform and our ETF product categories. BlackRock’s sustainable products attracted $31bn of net inflows during the quarter.

BLK in the third quarter of FY 21 has reported the adjusted earnings per share of $10.95, beating the analysts’ estimates for the adjusted earnings per share of $9.35, according to IBES data from Refinitiv. The company had reported the adjusted revenue growth of 16 percent to $5.05 billion in the second quarter of FY 21 from $4.37 billion last year. The revenue growth is driven by technology services revenue growing 13% to $320 million. Jefferies analysts attributed strength in revenue to robust performance fees which came in at $345 million, compared with Jefferies’ estimate of $220 million. The adjusted operating margin eased to 38.3 per cent in the quarter, from 40.2 per cent a year ago, driven in part by a drop in performance fees.

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