WASHINGTON: BlackRock Inc charged past a record $6 trillion in assets, its profit beating Wall Street forecasts, as investors flooded into the relatively low-cost funds of the world’s largest asset manager. A new US tax law, which sliced corporate and individual income rates, also helped the company’s results in the fourth quarter ended December 31.
BlackRock said it saw a $1.2 billion tax benefit related to the law and raised its quarterly cash dividend by 15 per cent.
“We’ve been winning more share of wallet,” Chief Executive Larry Fink said. “Fees are really important and are becoming more important.”
Fink said the tax reform was putting more money in his clients’ pockets, which they would need to invest, and that the increased cash could allow him to invest more in the company’s future.
He declined to identify such investments but said they were discussed at the company’s board meeting.
The New York-based company’s shares were up 2.3 per cent in trading on Friday morning.
Shares have gained 47 per cent over the last year, including dividends.
“Just when we thought, after the third-quarter report, things couldn’t get better, it seems that they did,” said Edward Woods, portfolio manager at Bahl & Gaynor Inc, which owns BlackRock shares.
Strong economic growth, tame inflation and supportive government policies propped up assets in 2017, with most countries’ equity markets recording gains, often at double-digit percentages.
BlackRock has the largest lineup of exchange-traded funds (ETFs), many of which track segments of the market at a relatively low fee.
The move to those funds caught many of its once-larger competitors flat-footed. BlackRock’s net income surged to $2.3 billion, or $14.07 per share, from $851 million, or $5.13 per share, a year earlier. Excluding the benefit from the new tax law, BlackRock earned $6.24 per share. — Reuters
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