Alternative Investment

BlackRock posts 14% decline in 4th quarter AUM amid volatile markets

Despite the decline in total assets in the fourth quarter, BlackRock had $145.7 billion of long-term net inflows, including cash management. Without cash management, which was down $31.9%, net inflows totaled $113.7 billion, according to the firm’s earnings release Friday.

Investors have been buffeted by the threat of a recession and the efforts of the Federal Reserve to tame inflation by ratcheting up interest rates. The S&P 500 tumbled 19% last year, while the Bloomberg US Aggregate index, which includes Treasuries, investment-grade corporate bonds as well as mortgage- and asset-backed securities, plunged a record 13%.

“We are not immune to complex and volatile market conditions,” Chief Executive Officer Larry Fink, 70, said in a separate memo to staff. “The current operating environment is unlike anything we’ve seen in decades, and 2022 was a year of huge transition for geopolitics and markets. We saw a rewiring of global supply chains, soaring inflation, hawkish monetary policy and a deepening of political polarization.”

By client type, exchange-traded funds attracted net inflows $89.7 billion in the fourth quarter. Total institutional net flows totaled $70.9 billion, with active strategies notching $76 billion in net flows while passive strategies were down $5.2 billion.

Retail assets were down $14.8 billion, the report showed.

By product type, fixed-income strategies brought in $115.5 billion of net inflow and equity funds had net inflows of $29.7 billion. Multiasset had a total of $2.1 billion in net inflows. BlackRock’s combined alternative investment strategies had total net outflows of $1.7 billion in the fourth quarter with illiquid alternative strategies attracting $4.4 billion of net inflows while liquid active strategies had net outflows of $1.9 billion and currency and commodities strategies had net outflows of $4.2 billion.

Regarding net inflows, Gary Shedlin, BlackRock’s chief financial officer, told analysts during the firm’s earnings call that BlackRock captured one-third of all long-term industry flows in 2022.

Mr. Shedlin also noted that BlackRock is making a minority investment in 401(k) provider Human Interest and will lead a financing round to support the firm’s growth.

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