Sat, May 26, 2018
A A A
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


Bg

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. Investing - Hedge funds hike Smurfit Kappa positions amid takeover deal hopes, Hedge fund IBV Capital digs deep to unlock long-term value in a competitive market, Eisman of 'The Big Short' fame recommends shorting Deutsche Bank[more]

    Hedge funds hike Smurfit Kappa positions amid takeover deal hopes From Irishtimes.com: Two US hedge funds, Davidson Kempner and York Capital, have accumulated a combined 4.74 per cent interest in cardboard box maker Smurfit Kappa using financial derivatives. It comes as many investors cl

  2. Foundations of hedge fund managers gave big to controversial donor-advised funds[more]

    In the world of philanthropy and tax-deductible charitable giving, the explosion of donor-advised funds has touched off intense debate. Now, there is evidence that the DAF boom is being further fuelled by hedge fund foundation money. Four of the top five foundations that gave the most to large do

  3. Third Point to raise $400 million for SPAC, Farley to run it[more]

    From Reuters.com: Daniel Loeb's hedge fund Third Point LLC plans to raise $400 million for a "blank check" company which will be run by outgoing stock market operator NYSE Group President Thomas Farley, according to a regulatory filing made on Tuesday. The new company, referred to on Wall Stre

  4. Study: For hedge funds, smaller is better[more]

    From Institutionalinvestor.com: The smaller the hedge fund is, the better its performance is likely to be, according to a new study. The study - "Size, Age, and the Performance Life Cycle of Hedge Funds," released April 26 - sought to determine whether a hedge fund's size and age had any effect on i

  5. Hedge fund returns rose in April for first gain since January[more]

    From Bloomberg.com: Bloomberg Hedge Fund Database shows returns flat this year - Currency strategies had the biggest monthly gain at 13% Hedge fund returns increased 0.78 percent in April, reversing two consecutive monthly declines. The swing of 134 basis points was driven by gains in all seven