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(Bloomberg) — BlackRock Inc.’s assets swelled to $9.09 trillion in the first quarter as depositors sought cover following the collapse of several US banks by pouring money into the firm’s cash-management funds.
Net flows into all of the firm’s funds totaled $110 billion, New York-based BlackRock said Friday in a statement, with investors and clients adding money to bond ETFs. Long-term investment products, which include mutual funds and ETFs, added $103 billion, beating the $84.1 billion average estimate of analysts in a Bloomberg survey.
More than $40 billion flowed into the firm’s cash-management products in March amid a “crisis of confidence” in the health of regional banks, according to Chief Executive Officer Larry Fink.
“More and more deposits are leaving and they’re going into ETFs and into any form of cash and money-market funds,” Fink, 70, told analysts in a conference call. “This type of dislocation is just going to create more and more opportunity for us.”
Shares of BlackRock rose 3.6% to $694.98 at 9:43 a.m. in New York, paring their decline for the year to 1.9%.
The Federal Reserve began hiking rates aggressively early last year in an effort to tame inflation, testing the resilience of many small and mid-size lenders. Deposits at commercial banks have tumbled — especially in the weeks that followed the mid-March collapse of Silicon Valley Bank and Signature Bank.
Read more: Top US Banks to Reveal $521 Billion Deposit Drop, Most in Decade
BlackRock’s assets under management climbed 5.8% since the end of last year, when they totaled $8.6 trillion, fueled in part by stock- and bond-market gains. The S&P 500 climbed 7% in the first quarter, while the Bloomberg US Aggregate Bond Index rose 3%.
Adjusted net income fell 18% from a year earlier to $1.2 billion, or $7.93 a share, beating analysts’ average estimate of $7.67. Revenue declined 10% to $4.24 billion, matching Wall Street’s expectations.
Other first-quarter highlights:
- Fixed-income ETFs took in a net $33.5 billion, while equity ETFs had net outflows of $10.1 billion; actively managed equity funds also had outflows
- Compensation and benefit expenses decreased $71 million from a year earlier because of lower incentive pay
- BlackRock repurchased $375 million of its stock during the period and increased the dividend by 2.5% to $5 a share
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