Wed, Nov 25, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

BlackRock: Investors slowed down on ‘re-risking’ activities, shift to passive funds

Wednesday, April 28, 2010
Opalesque Industry Update – BlackRock Inc., the largest global asset manager with now $3.364tln in AuM, said that inflows into hedge funds slowed down in the first quarter of this year as institutional investors stepped back to reassess their allocation strategies and shifted their focus from active to passive funds.

BlackRock reported this week that alternative investment AUM had decreased $0.2bn to $101.9bn. AUM growth during Q1-10 was driven by positive investment performance and net new business, primarily from institutional investors. Net new business totaled $2.5bn, including net inflows in single strategy hedge funds and FoFs, as well as currency and commodity offerings. Commercial real estate continued to lag the recovery, however.

Performance fees were $50m in Q1-10, compared to $11m in Q1-09. The increase primarily relates to an increase in performance fees from hedge funds and fixed income products.

The estimated economic investments in hedge funds and FoHFs at the end of Q1-10 amounted to 10 to 15%.

BlackRock’s chairman and CEO Laurence D. Fink, made the statement as the firm announced $423m in net income during Q1-10, compared with $339m in Q1-09. In its Q1-10 financial report, Blackrock said its AuM rose by $17.6bn to $3.36tln as at March 31, 2010, compared with $3.34tln as at Dec. 31, 2009.

“Institutional ‘re-risking’ activity slowed down and reallocations focused primarily on shifting from active to passive and from money market funds to deposits,” Fink said.

Operating income was $654m and non-operating expense, net of non-controlling interests, was $3m. The operating margin was 32.8%, which included the effect of $52m of pre-tax Barclays Global Investors (BGI) integration costs. BlackRock completed its acquisition of Barclays’ investment unit for $13.5bn in cash and shares in December 2009.

In the last quarter of 2009, operating income was $389m and non-operating income was $17m. The operating margin was 25.2%, which included the impact of $152m of pre-tax BGI transaction and integration costs.

Fink said, “I am pleased with BlackRock’s first quarter performance and progress on our integration. Most importantly, our focus on investment and risk management has been steadfast, and the organization has come together quickly to share insights and expertise across disciplines. While our record is not unblemished, we have achieved strong investment performance across much of our platform, including fixed income, international equities, single strategy hedge funds and fund of funds.”

According to the report, BlackRock’s revenue was $1,995m for the period, up 102% compared to Q1-09 ($987m) and 29% compared to Q4-09 ($1,544m). Q1-10 revenue included $1,753m of base fees, which included the full quarter effect of acquired BGI AUM, revenue associated with $63bn of growth in long-term AUM and net market appreciation and $50m of performance fees in Q1-10 .
- Dumlao, Bischoff, Gravrand


What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Hedge fund marketing and the selling cycle[more]

    By Bruce Frumerman. How long is the selling cycle now? That’s a question my financial communications and sales marketing consulting firm has been asked on a regular basis by hedge fund firm owners and sales people, ever since we opened the doors to our firm in 1987 pre-crash. Wa

  2. Investing - BlackRock targets ETF investors with flexible currency hedging, Nelson Peltz bets on General Electric Company and Mondelez International, Apple plummets to 4th place among hedge holdings, from No. 1, Top Q3 equity purchases and sales of top 50 hedge funds[more]

    BlackRock targets ETF investors with flexible currency hedging From BlackRock Inc., the world’s largest asset manager, is changing course on exchange-traded funds that protect against currency volatility. After stressing the easy switch between hedged and unhedged ET

  3. BlackRock is shutting down its Global Ascent macro fund[more]

    Komfie Manalo, Opalesque Asia: BlackRock, the world’s largest asset manager, has announced plans to shut down a macro fund, Global Ascent Fund, because of "headwinds facing the industry". The hedge fund, which makes bets on stock, bond and currency markets, will return money to investors. Ac

  4. Opalesque Roundtable: Seeding deal terms can be onerous for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Executives from fund of funds firms, family offices, a placement agent, a private equity firm, and an accounting firm gathered in Connecticut last month for the

  5. Opalesque Roundtable: Family offices flock to co-investment[more]

    Bailey McCann, Opalesque New York: Co-investments have been a hot topic for pension funds in recent years, as they try to move away from high fees and improve transparency. But now, family offices are more readily getting into the mix and establishing in-house deal teams, according to the delega