BlackRock has just knocked it out of the park with a record $10.5 trillion in assets under management, thanks to a booming stock market and a killer new Bitcoin ETF. This beast of a company pulled in a 36% jump in net income, landing at $1.57 billion this first fiscal quarter. We’re talking about an 11% hike in their revenue too, hitting $4.7 billion, which beat what all those Wall Street gurus at Bloomberg thought would happen.
But it wasn’t all high-fives and victory laps.
Their $57 billion in net inflows didn’t really live up to the hype. Why? Because everyone’s nervous with cash burning a hole in their pockets while the Fed’s got interest rates sky-high—the highest in 23 years, to be exact. Larry Fink, the big boss at BlackRock, laid it out. Loads of cash are still sitting idle because folks are scared and unsure about jumping back into stocks and bonds.
Holding Back on Bets and Banking on Bitcoin
Fink then talked about how the big pension funds are super hesitant to part with their cash, especially in private equity, because they’re not seeing quick returns thanks to a slowdown in business deals and IPOs.
He said, “More and more clients are keeping a higher balance of cash [to] meet their liability discharges.” He’s betting if private equity loosens up a bit, money would flow quicker into bonds and other places that make cash.
Now, let’s talk Bitcoin because BlackRock’s not playing around.
You know they launched a spot Bitcoin ETF, yeah? Now guess what? It’s on fire! It zoomed to $10 billion in assets like it was nothing and now sits pretty at $18.7 billion. That pumped their total ETF inflows up to $67 billion for the quarter.
Fink is also all in on investing in stuff like private markets and big projects that help cut down on carbon and digitize more of the world. They’re even set to close a massive $12.5 billion buy of Global Infrastructure Partners, fueled by $3 billion in fresh debt.
The CEO also stoked about pulling in new clients for BlackRock’s tech and retirement services. He thinks this is just the start of even bigger wins. Their tech revenue’s up to $377 million, a $37 million jump from last year.
The Aladdin platform they’ve got? It’s snagging big deals and there’s more where that came from.
Rolling with the Changes and Chasing Retirement Readiness
Talking about big numbers, the nearly $500 billion bump in assets they managed this quarter came mostly from the stock market doing its thing. The S&P 500 had its best first quarter since 2019. They saw $42 billion go into bond funds and $18 billion into stocks. Overall, long-term inflows hit $76 billion. Their operating margin even got a bit better, sitting at 35.8%.
On the staffing front, Martin Small, the CFO, said they’re keeping the team size steady this year, just like the last couple of years. Fink thinks AI will help them do more with fewer folks. But the stock market wasn’t too happy, it seems. BlackRock’s shares dropped 2% one fine Friday afternoon, and they’re down over 5% for 2024, after having a stellar end to last year with a 25% bump.
Now, onto something pretty serious—retirement.
Fink also complained about a retirement crisis. His annual letter to CEOs and investors was clear: the U.S. needs to get its act together because our current retirement plans and social security just aren’t cutting it. More than half of BlackRock’s managed assets are tied up in retirement funds.
Fink’s also trying to bridge gaps in the heated debates about climate change and investment responsibilities. He’s been around, talking to leaders in 17 countries last year, and he’s pushing what he calls “energy pragmatism.”
The guy believes we need both fossil fuels for now and green energy for the future. No one’s going to back a move to cleaner energy if it means freezing in the winter or sweating out the summer without affordable solutions.
So yeah, that’s about it.
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