BlackRock Inc.’s assets under management fell 16% in the third quarter, along with equity and bond markets, as central banks continued raising interest rates to counter surging inflation.
The firm oversaw $7.96 trillion as of Sept. 30, the lowest since 2020, according to a statement Thursday from New York-based BlackRock, the world’s biggest asset manager.
Investors pulled money from several BlackRock offerings, including equities and cash management. Core products, known as long-term funds, attracted $65 billion of net inflows, missing the $104 billion average estimate of analysts in a Bloomberg survey. In last year’s third quarter, clients put a net $98 billion into those investments, which include exchange-traded funds and mutual funds.
The results reflect a chaotic three months for markets as hawkish central bankers sent investors scurrying for safety. The S&P 500 and the Bloomberg US Total Return Bond Index each slumped about 5% in the third quarter.
The third-quarter earnings “are a direct result of our commitment toward serving our clients and providing choice to our clients, in the backdrop of very severe market downturns in both bonds and equities,” Chief Executive Officer Larry Fink said in a conference call with analysts.
Shares of BlackRock fell 2.8% to $516.49 at 9:57 a.m. in New York, after the US Labor Department released data showing a key gauge of US consumer prices rose to a 40-year high last month. The stock has tumbled 44% this year.
Adjusted net income fell 17% from a year earlier to $1.5 billion, or $9.55 a share, beating analysts’ average estimate of $7.03. Revenue fell 15% to $4.3 billion, roughly in line with Wall Street predictions.
Fink, 69, who warned last year that inflation would be more than a fleeting phenomenon, has been proven right. In September, the Federal Reserve lifted its benchmark lending rate by 75 basis points to a target range of 3% to 3.25% as prices remained stubbornly high.
Investors pulled almost $40 billion from BlackRock’s cash-management products in the third quarter, compared with net withdrawals of $12.4 billion a year earlier. Institutional investors also fled index products, withdrawing $23.4 billion.
While analysts expected inflows into BlackRock equity funds, the firm reported $29.3 billion of net withdrawals. One bright spot was fixed income, with inflows of $90.6 billion, partly attributable to a single institutional investor.