(Bloomberg) — BlackRock Inc. posted mixed results for the quarter preceding President Donald Trump’s sweeping tariffs, pulling in less client money than analysts expected but posting higher-than-anticipated earnings per share.
“Uncertainty and anxiety” about the future dominate client conversations, BlackRock Chief Executive Officer Larry Fink said in an earnings release Friday.
Since April 1, investors added $20 billion to the firm’s cash and money market funds, which now have about $950 billion of assets, the CEO told analysts. Clients are now asking when it makes sense to buy more equities.
Trump’s unexpectedly steep tariff announcement on April 2 sent markets convulsing worldwide in a period rivaling the volatility and moves during the 2008 financial crisis and onset of the pandemic in 2020. While Trump later issued a 90-day pause on “reciprocal” tariffs on countries except for China, markets remain on edge.
“The sweeping US tariff announcements went beyond anything I could have imagined in my 49 years in finance,” Fink told analysts. “This isn’t Wall Street versus Main Street. The market downturn impacts millions of ordinary people’s retirement savings.
The US economy is close to or possibly already in a recession, Fink told CNBC Friday, adding that he expects elevated inflation that will make the Federal Reserve loath to cut interest rates.
‘Well Short’
In the first quarter, BlackRock pulled in $83 billion of client money to its investment funds, less than the $105 billion that analysts had expected. That’s largely because $46 billion was pulled from lower-fee institutional index funds. Investors yanked $7.3 billion from the firm’s actively managed fixed-income funds.
Investors added $107 billion to exchange-traded funds and $38 billion to fixed income in the first quarter.
The first-quarter flows were resilient “but well short” of last quarter as the industry confronts an “extremely challenging environment,” Edward Jones analyst Kyle Sanders said in a note.
“Clearly April will be a different story for flows, revenue and margins and even BlackRock can’t sidestep this tariff storm,” Evercore ISI analysts led by Glenn Schorr said in a note. The firm’s scale across markets will probably help, they added.
BlackRock’s adjusted net income per share in the quarter rose 15% from a year ago to $11.30 per share. That beat the average analyst estimate of $10.11. Revenue rose 12% to $5.3 billion from a year ago.
The firm’s total assets under management were $11.6 trillion as of March 31 — virtually unchanged from the final three months of 2024 — after a quarter in which US equities declined, while many global stock and US bond indexes rose.
Shares of BlackRock rose about 1.25% to $869.50 at 12:27 p.m. in New York. BlackRock’s stock declined 16% this year as of market close on Thursday, trailing the 10% decline of the S&P 500 Index.
The money manager had $4 billion of outflows from investors in the Asia-Pacific region, the only one of its three regions to end negative. Meanwhile, BlackRock took in $9.3 billion in overall alternative assets in the quarter, including $7.1 billion in private markets.
The firm is undergoing a significant transformation by expanding into higher-fee alternative assets, including infrastructure and private credit, after committing almost $30 billion in the past year over three acquisitions. BlackRock, which will have about $600 billion in alternative assets when all deals are complete, is increasingly competing against private-asset leaders Blackstone Inc., Apollo Global Management Inc. and KKR & Co.
For years, BlackRock was a “traditional asset manager” largely of stocks and bonds, Fink said last month in his annual letter to investors. But now, he wrote, “It’s not who we are anymore.”