BlackRock's second-quarter profit rises 11 percent

Wed Jul 16, 2014 10:59am EDT
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By Ashley Lau

NEW YORK (Reuters) - BlackRock Inc (BLK.N: Quote), the world's largest money manager, reported an 11 percent jump in second-quarter profit on Wednesday, boosted by strong markets that helped drive flows into its funds across asset classes and regions.

The New York-based asset manager posted net income of $808 million, or $4.72 per share, up from $729 million, or $4.19 per share, a year earlier.

"A key thing for BlackRock is that we are the largest player," Chief Executive Officer Laurence Fink said in an interview, noting that the asset manager's global presence and local footprint in 30 different countries has enabled it to grow by winning assets from smaller players in many domestic markets.

"In Europe, we're seeing domestic mutual fund players losing market share to the international players," he said. "Some of the domestic managers may have superb asset management in their domestic market, but they don't have, in many cases, the global presence in products across the board."

BlackRock ended the quarter with $4.6 trillion in assets under management, up 19 percent from a year ago.

BlackRock's iShares exchange-traded funds business, which crossed $1 trillion in assets for the first time in June, drove the bulk of the asset manager's long-term net flows during the quarter. Of the $38 billion that investors poured into long-term funds during the quarter, 80 percent was into iShares funds.

BlackRock executives said they have benefited from investors utilizing ETFs in place of other financial instruments, replacing futures or single bond strategies with more liquid and cheaper ETFs to gain exposure.

"That is something that many of the other issuers of ETFs really don't think about," BlackRock President Rob Kapito said on a call with analysts. "We are treating (ETFs) as a significant financial instrument, not just a product that we're hoping to garner more assets in."   Continued...

The BlackRock logo is seen outside of its offices in New York January 18, 2012. 
REUTERS/Shannon Stapleton