This was the first full year of operation since the December 1, 2009, acquisition of
The company said its technology services business, BlackRock Solutions, had taken on 20 new assignments and become a "key differentiator." And that its iShares exchange-traded fund business was strong, with inflows of $42.9 billion for the year.
"
Business growth remains robust,'' for BlackRock Solutions, said Chairman Laurence D. Fink. "And the pipeline of opportunities in development is exceptionally strong."
BlackRock Solutions and advisory revenue was $132 million in fourth quarter 2010 compared to $108 million in fourth quarter 2009. The increase was primarily due to an increase in advisory assignments and additional Aladdin mandates, the company said. Aladdin is an investment system that integrates risk analytics with portfolio management, trading and operations tools.
As of January 20, 2011, its new business pipeline totaled $72.7 billion, net of $13.6 billion of merger-related business.
The iShares business "closed the year on a strong note, with net inflows of $13.4 billion during the fourth quarter,'' Fink said. "Net new business in 2010 reflects our strong position globally, with a 33% organic growth rate in Asia Pacific, 16% in Europe and the Middle East and 7% in the Americas."
Operating income was $940 million and non-operating income, net of non- controlling interests, was $26 million. The full-year 2010 operating margin was 34.8%, which included $90 million of integration costs associated with the Barclays acquisition.
Fourth quarter 2010 operating income increased 142% to $940 million from $389 million in fourth quarter 2009. Fourth quarter 2010 operating income reflects a full quarter of revenues and expenses related to the operations of BGI as compared to one month in fourth quarter 2009. BGI transaction and integration costs included in fourth quarter 2009 were $152 million as compared to zero in fourth quarter 2010. The BGI transaction/integration expenses are not part of the ongoing business and are comprised of costs associated with combining the firms.
Fourth quarter 2010 revenues of $2.493 million increased $949 million, or 61%, compared to $1,544 million in fourth quarter 2009, due to the
following:
• Investment advisory, administration fees and securities lending
revenue of $1,951 million in fourth quarter 2010 increased $697 million, or 56%, compared to $1,254 million in fourth quarter 2009, primarily related to the BGI acquisition as well as growth in long- term AUM, which included net new business and market appreciation on long-term AUM during the prior twelve months, partially offset by a decline in fees from cash management products due to lower average AUM.
• Performance fees were $326 million in fourth quarter 2010, compared
to $125 million in fourth quarter 2009. The $201 million increase primarily relates to an increase in performance fees earned upon exceeding absolute investment or relative investment return thresholds on alternative multi-strategy hedge funds, regional/country equity strategies, multi-asset class and fixed income products.
• Other revenue was $57 million in fourth quarter 2010, an increase
of $27 million, compared to $30 million in fourth quarter 2009. The increase was primarily due to a $15 million increase in fees earned for transition management services and a $6 million increase in marketing fees for the distribution of Barclays iPath® products (exchange traded notes issued by Barclays Bank PLC).
