BlackRock's assets under management rose to a record $ 7.8 billion in the third quarter as the financial markets rebound that began in March helped the fund manager beat sales and earnings projections.
The world's largest fund manager announced that revenue was up 18 percent from 2019 to $ 4.37 billion, while net income was up more than a fifth to $ 1.36 billion.
New York-based BlackRock reported adjusted and diluted earnings per share of $ 9.22 for the third quarter, exceeding the expectations of analysts polled by Bloomberg.
The company's operating margin reached a record 47 percent in the reporting period, one percentage point higher than the record high a year ago. This is way ahead of the competition in the industry and underscores BlackRock's strong global presence in the financial system.
"I don't think anyone thinks margins will stay at those 47 percent," Larry Fink, executive director of BlackRock, told the Financial Times. The company "fails to generate margins" and will invest in growth, especially technology, he said.
"If we believe the investment will pay off in the long term, we will invest."
The company posted net cash inflows of $ 129 billion for the third quarter, increasing its assets above the $ 7.4 billion record high in the fourth quarter of last year. It did so after the company attracted $ 100 billion in new money in the second quarter.
Third quarter inflows were $ 47 billion into actively managed funds. That made it one of the best quarters in recent years and helped boost actively managed assets to over $ 2 billion.
BlackRock's stock rose more than 20 percent this year and continued to climb to record levels after the earnings were last released. The share gained 4.3 percent on Tuesday. The bumper run contrasts with a fund loss of 2 percent for fund managers in the S&P 500.
"You are almost the Amazon of wealth management," said Kyle Sanders, financial services analyst at Edward Jones. "It's a one-stop shop for a lot of customers. Everything went to their liking during the quarter."
In March, BlackRock received a mandate from the Federal Reserve to buy corporate bonds, including its own exchange-traded pension funds. BlackRock credit ETFs soared in fortunes following the appointment announcement, leading to criticism of the agreement despite BlackRock waiving fees for the money the central bank invests in their products.
BlackRock also had technology services revenues of $ 282 million, up 9 percent year over year. The company attributed the growth to increased revenue from its Aladdin platform, which connects institutional investors, competing fund managers and corporate clients with the markets and helps them assess risk. The system accounts for a fraction of BlackRock's revenue, but has allowed the group to diversify with large subscription contracts.
In January, BlackRock took a strong stance on climate change by dropping its holdings in certain fossil fuel companies and indicating that it would take a tougher line with the companies it owns.
The fund manager fined 53 companies at annual meetings this year for climate change, but was criticized for supporting just 6 percent of climate-related shareholder votes as of June, up from 8 percent last year Proxy Insight.