Exceeding analysts’ expectations, the US-based publicly traded investment management firm, Blackrock has reported that its Q2 profit and revenue dropped compared to last year, but improved from the first quarter as clients deposited $15.2 billion into its funds – reported Bloomberg.
New York-based BlackRock attracted deposits as competitor Legg Mason had to encounter $30.3 billion in withdrawals. BlackRock collected $31.1 billion in stock and bond funds, more than offsetting redemptions from cash-management and alternative products such as hedge funds, reported the newspaper.
According to Reuters, adjusted earnings were $1.75 per share. Revenue was $1.029 billion, down from $1.387 billion in 2008 but up from $987 million in Q1. Assets under management were $1.37 trillion as of June 30, up 7% from the end of Q1.
In a statement Laurence Fink, CEO, said: We’re seeing a total change in how our clients are looking at asset allocation. But also we’re looking at how they think about how they should allocate in the equity space between active and passive.Clients are going to have, probably overall, a little less exposure than they did in alternatives and equities. So many clients had an under allocation in fixed income.
Greggory Warren, an analyst with Morningstar in Chicago, said: A weak spot for BlackRock is its low percentage of stock-fund-assets. Equity funds account for about 24 % of assets, bond funds represent 37% and cash- management funds have 23%. The remainder is in advisory and alternative investments, such as hedge funds. It’s harder to generate the same revenue growth when your realization rates are low, reported the newspaper.
