As investors poured money into its exchange-traded funds and a stock market boom increased the value of client assets, BlackRock topped Wall Street projections for second-quarter profit on Wednesday, sending its shares up 6% in premarket trading.
The New York-based company’s assets increased from $12.53 trillion a year ago and $13.89 trillion in the first quarter to a record $15.34 trillion in the quarter.
As investors looked past the volatility brought on by the Middle East conflict, excitement grew about corporate profits, and major U.S. equity indexes concluded June with their largest quarterly gains since 2020.
The benchmark S&P 500 index, a measure of large-cap U.S. stocks, increased by 15% during the quarter.
Due to the success of its iShares ETF franchise, the largest money manager in the world received $192 billion in customer funds during that time.
That contrasts with $130 billion in the first quarter and $68 billion a year earlier.
Fixed-income products generated $92 billion in net flows during the quarter, compared to $71.6 billion from equity products.
New technology is driving stronger margins and profit momentum, and the market fundamentals remain solid and well-supported.
In a statement, CEO Larry Fink said, “The scope and depth of our client relationships worldwide have never been greater.”
According to estimates published by LSEG, BlackRock earned $13.91 per share on an adjusted basis in the three months ended June 30, exceeding expectations of $12.59.
The projected share buybacks by the business were raised from $1.8 billion to $2 billion in 2026.
Push for Private Markets
In recent years, BlackRock has increased its attempts to become a prominent participant in alternative assets, which encompass everything other than stocks and bonds.
Traditionally, BlackRock has been more well-known for its large position in stocks and bonds than in private markets.
To accelerate its push into private markets, the business has spent over $28 billion to acquire data supplier Preqin, private credit company HPS Investment Partners, and infrastructure investor Global Infrastructure Partners.
However, due to worries about lending standards and worries about AI-driven disruption at software businesses, the multitrillion-dollar private credit market has come under close examination.
Private credit investment vehicles with a retail concentration, such as BlackRock’s HPS Corporate Lending Fund (HLEND), have seen slower flows and more redemption requests in recent months due to growing investor worries about the asset class.
After investors attempted to withdraw 13.3% of shares in the second quarter of HPS’s flagship non-traded private credit fund, HLEND, BlackRock upheld the customary 5% cap on quarterly redemptions.
Infrastructure generated $5.2 billion during the specified period, while private credit net inflows totaled $6 billion. Net inflows into private markets totaled $15.4 billion.
Despite market commotion surrounding the asset class, Fink stated earlier this year that institutional demand for private credit was on the rise.
Between 2025 and 2030, the company wants to raise $400 billion in gross private market funding.
Exchange-traded funds, a vital component of BlackRock’s operations through its industry-leading iShares franchise, yield much lower costs than private assets.
