|
The
current macroeconomic environment, ridden with worries of
surging inflation, geopolitical turmoil and rate hikes, has only
added to the pressures of fund managers, as a large part of
their business is dependent on market conditions.
Moreover, the pullback in the pandemic-era stimulus from the
U.S. Federal Reserve has hit the risk appetite of investors who
have rejigged porfolios this year towards safe-haven and
fixed-income products, with equity markets tumbling on recession
fears.
BlackRock's shares, which have shed nearly 36% so far this year,
were down 1.7% in premarket trading after results.
"Investors are simultaneously navigating high inflation, rising
rates and the worst start to the year for both stocks and bonds
in half a century," said Chief Executive Officer Larry Fink said
in a statement.
More rate hikes by the U.S. central bank to combat decades-high
inflation could further impact asset managers as investors
refrain from large investments. They are also facing tough
comparisons to last year, when easy monetary policy and cheap
borrowing led to frenzied investment activity.
BlackRock's assets under management (AUM) fell 11% to $8.49
trillion compared to last year, well below the $10 trillion
milestone from the fourth quarter of 2021.
Revenue in the quarter for BlackRock fell 6% to $4.53 billion,
while total net inflows stood at $90 billion.
Adjusted profit fell to $1.12 billion, or $7.36 per share, for
the three months ended June 30, from $1.61 billion, or $10.45
per share, a year earlier.
Analysts on average had expected the asset manager to report a
profit of $7.90 per share, according to IBES data from Refinitiv.
The company bought back shares worth $500 million in the
quarter.
(Reporting by Manya Saini in Bengaluru and Carolina Mandl in New
York; Editing by Shinjini Ganguli)
[© 2022 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
