Blackrock’s profit and AUM down but world’s largest fund manager reports net inflows of $146bn

Blackrock reported an 18 per cent drop in its fourth-quarter profit blaming an ‘operating environment unlike anything we’ve seen in decades’.

The world’s largest fund manager still managed to net increase inflows, which totalled $146bn during the three months ending 31 December.

Blackrock’s net income income fell 23 per cent to $1.3bn (£1.1bn) from $1.6bn while assets under management fell 14 per cent, from $10 trillion to $8.6 trillion in the quarter ending 31 December.

In its announcement Blackrock said the rise in net inflows, which were more than double the previous quarter, were grounds for optimism.

Revenue fell by 15 per cent to $4.3bn from $5.1bn, a fall which it said was “primarily driven by the impact of significantly lower markets and dollar appreciation on average AUM and lower performance fees”.

Blackrock reported $146bn of quarterly long-term inflows. While this was far below last year’s $540bn, it was substantially higher than the $65bn reported in the third quarter, when inflows were last year’s market sell-off. 

In a memo sent to employees seen by Bloomberg, Larry Fink, chair and CEO of BlackRock, said: “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 polarisation.”

According to Morningstar data, the US Market Index lost 19 per cent last year – its biggest annual loss since 2008 – while the US Core Bond Index lost 13 per cent in 2022, the worst performance since 1999.

Earlier this week it was reported that Blackrock is planning to lay off 500 staff globally, as it sought to cut costs following 2022’s market sell-off.