MutualFundWire.com: Crossing the $7T-AUM Mark

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Friday, January 17, 2020

Crossing the $7T-AUM Mark

For the first time in history, there is now an asset manager with more than $7 trillion in AUM.

Laurence D. Fink
BlackRock
Chairman, CEO

On BlackRock's Q4 2019 earnings call (as transcribed by Seeking Alpha, Gary Shedin, chief financial officer, told analysts, "Full year revenue of $14.5 billion was up 2%, while operating income of $5.6 billion increased marginally. Earnings per share of $28.48 was up 6% versus 2018. For the fourth quarter, BlackRock generated revenue of $4 billion and operating income of $1.5 billion, up 16% and 17% respectively from a year ago, when results were impacted by significant market volatility."

Larry Fink, chairman and CEO, says "We generated a record $429 billion of total net inflows for the year representing 7% organic asset growth and 5% organic base fee growth. BlackRock's result reflects the strength of our platform which is diversified across now $2 trillion in active strategies, $5 trillion in iShares and index strategies and now over $500 billion in cash strategies. We generated $226 billion of net inflows in iShares and index, we generated $110 billion in flows in active investing and we generated $93 billion in cash strategies."

Craig Siegenthaler and his equity research team at Credit Suisse note that BlackRock's net flows are higher than expected for Q4 2019, at $129 billion versus an anticipated $115 billion.

According to their earnings release, AUM as of December 31, 2019 was at $7.429 trillion, an increase of 24 percent from $5.975 trillion as of December 31, 2018. This is also a 6.7 percent increase from 6.963 trillion as of September 30, 2019.

Overall, Blackrock beat Q4 Non-GAAP EPS expectations of $8.34 by $0.69, and the New York City-based fund firm beat GAAP EPS expectations of $8.29 by $0.60. Their revenue of $3.98 billion (an increase of 15.7 percent year-on-year) beat expectations by $140 million.

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