Magazine article American Banker

Fixed-Income Returns Give BlackRock a Lift

Magazine article American Banker

Fixed-Income Returns Give BlackRock a Lift

Article excerpt

Inflows into managed accounts, equity funds, and insurance helped BlackRock Inc.'s fourth-quarter profits rise.

The New York company, which is majority-owned by Pittsburgh's PNC Financial Services Inc., announced Wednesday that its net income in the three months was $33.8 million, up 20% from a year earlier and 2% from the third quarter.

Assets under management at BlackRock, which mostly manages fixed-income products for institutional clients, rose 11% from the fourth quarter of 2001, to $272.8 billion, and 14% from yearend 2001.

Chairman and chief executive officer Laurence Fink said in a conference call that $23 billion of the $27 billion of new assets under management in the three months came from fixed-income returns.

"For equity products, we are starting to see a nice impact from recent hires" in the managed-account business, Mr. Fink said. "We saw $1.3 billion in equity inflows -- that is the first equity inflows in three years. We saw it across from board, from small and midcap (funds) to our international business. In these areas, where we are spending money and focusing our attention, we are starting to see real positive responses."

BlackRock had $8.1 billion of new fixed-income business in the fourth quarter, though clients moved $1.8 billion from bonds to equities. Net new separate account assets made up $7.5 billion of its $27.3 billion of net new business on the year, even though its mutual fund redemptions were $626 million in the fourth quarter. …

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