Tags: BlackRock | BLK | iShares Gold Trust | IAU | financials | stocks

BlackRock Thrives as Assets Grow

By    |   Friday, 08 Jul 2011 01:45 PM

There’s always a bull market somewhere in financial markets, whether it was Treasurys during the financial crisis of 2008 or stocks over the past two years. That puts BlackRock (BLK), the world’s largest asset manager, in a strong position for any market environment. BlackRock had $3.65 trillion of assets under management as of March 31, rising 2.5 percent from $3.56 trillion at the end of last year.

The firm has been around since 1988, but it turned into a colossus with the 2006 acquisition of Merrill Lynch Investment Managers and the 2009 purchase of Barclays Global Investors.

More than two-thirds of BlackRock’s assets come from institutional clients, which is an advantage because institutional investors tend to be more loyal customers than individual investors. Customers outside North America provide almost 40 percent of the company’s assets.

More than half of BlackRock’s assets sit in passive investments, providing the firm with solid fees in good times and bad. The company’s purchase of Barclays Global brought it iShares, which is the largest U.S. provider of exchange-traded funds (ETFs).

As you’re surely aware, ETFs have exploded in recent years, with their assets rising to more than $1 trillion at the end of 2010.

Until recently, ETFs were largely the province of individual investors. But institutional investors are now getting into the act, too. For example, Soros Fund Management used iShares Gold Trust (IAU) as one of its vehicles to speculate on gold prices over the past year.

Rising markets

Rallying stock markets helped push BlackRock’s assets under management higher in the first quarter. Revenue rose 14 percent in the period from a year earlier, to $2.28 billion from a year earlier.

While the U.S. stock market peaked in late April, other investment opportunities abound.
BlackRock is mulling an expansion of its alternative-assets offerings and may launch private equity funds.

Shortly after the first-quarter earnings report, Goldman Sachs added BlackRock to its conviction buy list, thanks to the company’s diversified businesses, attractive valuation, and exposure to international markets.

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There s always a bull market somewhere in financial markets, whether it was Treasurys during the financial crisis of 2008 or stocks over the past two years. That puts BlackRock (BLK), the world s largest asset manager, in a strong position for any market environment....
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Friday, 08 Jul 2011 01:45 PM
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