BlackRock reported second quarter earnings of $218 million, a 20% decrease from the $274 million it earned a year ago. Revenue also fell, by 26%, to $1.03 billion.
Assets under management were $1.373 trillion, down 3.8% from the second quarter of 2008 but up 7% from the end of the first quarter of this year.
Noting that investors took $7.5 billion out of the firm’s cash management products in the second quarter, BlackRock Chairman and CEO Laurence Fink said, “We are seeing clients questioning the amount of assets in cash. I think we’re going to see more movement from cash to the longer-dated items in the fourth quarter.”
The firm’s alternative investment unit was hit with $2.7 billion in outflows, including $1.8 billion taken out of the firm’s hedge funds-of-funds. The firm’s investments in real estate fell by $800 million.
Fink said he was hopeful those redemptions would slow: “I don’t want to say we’re out of the woods yet in the alternative space, but we’re beginning to see a turnaround.” But of real estate, he added, “We’re not seeing any flows in that business at all.”
Of the company’s pending acquisition of Barclays Global Investors, Fink said that “feedback from investors, consultants and distributors on the BGI transaction has been favorable, and new business wins since the announcement have been a particularly gratifying sign of confidence.”
Fink also said that clients have been telling him that they are ready to put their money back to work in the stock market, helping the company to gain new accounts.