BlackRock said it earned 35% more in this year’s first quarter, than last, helped by a “robust” pipeline of assignments for its software and technology services business.
The world’s largest manager of money said its first quarter 2011 net income reached $568 million. That was up $145 million from 2010.
Operating income was $798 million and non-operating income was $19 million.
The first quarter 2011 operating margin was 35.0%, which included $21 million of launch costs for its $1 billion Resources and Commodities Strategy closed-end fund.
Net income actually fell, however, from the fourth quarter by $89 million, primarily “due to the seasonal nature of performance fees,’’ the asset manager said.
The jump in year-over-year profits was “driven by strong investment performance, robust new business in long-term products, increased demand for BlackRock Solutions, and continued expense discipline,” commented Laurence D. Fink, chairman and CEO of BlackRock.
BlackRock Solutions, the technology services business, got 12 additional assignments.
Half were domestic and half international. They included one new client for its Aladdin integrated investment and risk management software platform, six risk management and outsourcing mandates, and five short-term advisory engagements.
The firm said it completed 12 short-term advisory assignments during the quarter. There are six Aladdin and four risk management implementations in process.
The firm is performing valuation work for the Central Bank of Ireland and assisting the Federal Reserve Bank of New York with bid lists for an investment portfolio known as Maiden Lane II.
The BlackRock Solutions “pipeline of new assignments and pending proposals is extremely strong,” the company said. That reflects “continued de-leveraging in the global banking system, demand for balance sheet surveillance, and extension of the Aladdin platform to handling equities.
Aladdin was originally set up by BlackRock for its own use, to accurately model very complex new forms of fixed-income products. The firm’s models for collateralized debt obligations, for instance, took in data from housing loan agencies on actual payments on underlying home mortgages.
The system combines aggressive management of accuracy of underlying data, as well as the models built on them. Here is a Money Management Executive rundown on the Aladdin investment and risk management system.
See related story, "Black Rock Gets Data Right to Give Models Might," Money Management Executive, April 11, 2011.