BlackRock Inc.’s
second-quarter profit rose 14% on new money coming into the giant asset manager, a sign that investors are becoming more confident about an economic recovery.
The company posted a quarterly profit of $1.378 billion or $8.92 a share, up from $1.214 billion or $7.85 a share a year earlier. Its revenue grew 32% to $4.82 billion.
The company’s adjusted profits beat analysts’ estimates.
Its assets under management rose 30% to $9.5 trillion, from $7.3 trillion a year earlier, cementing its dominance as the world’s largest money manager. Known for its funds that track markets and trade rapidly on exchanges, BlackRock’s returns reflect the market’s tremendous rally since the depth of the pandemic and Chief Executive
Larry Fink’s
push to build a company that serves nearly all types of investors.
While the firm’s returns were lifted by a slate of assets rising to record highs, its fortunes remain tied to markets and shifts in investor sentiment. Mr. Fink will now have to navigate an environment where the pandemic and the central banks’ intervention in markets are changing the economy in radical ways.
And, as the largest shareholder of many of the country’s largest companies for investors, Mr. Fink thinks inflation is likely here to stay.
“I don’t think it’s temporary,” he said.
He said government policies that focused on protecting domestic jobs and America’s supply chain will have inflationary effects. He added that most of the businesses he is talking to are behind on their hiring plans for 2021. This is going to lead to wages rising.
“We’re making structural changes that are going to change the framework of inflation,” he added.
He projects that inflation will exceed 2% annually over the next five years or so.
Money moving through the company’s sprawling lineup of exchange-traded funds, index products and other funds is a barometer of Wall Street sentiment and where major investors are making bets.
BlackRock added roughly $81 billion of new investor money, down from the $100.2 billion haul in a year earlier. Part of the fall came from one big pension fund withdrawing indexed assets in the first half of the year.
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