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Benefiting from a thriving stock market and a brand new Bitcoin ETF, BlackRock has just surpassed a record $10.5 trillion in assets under management. The behemoth company saw a 36% increase in net profit in the first quarter, reaching $1.57 billion. We're talking about their revenue also growing by 11%, reaching $4.7 billion, exceeding the expectations of all Wall Street experts surveyed by Bloomberg.
But it's not all high-fives and victories.
Their net inflows of $5.7 billion didn't quite serve the intended purpose. Why? Because everyone's feeling cash-strapped, and the Fed's rates are high - the highest in 23 years, to be exact. BlackRock's big boss, Larry Fink, elaborated on this. A lot of cash remains idle as people are hesitant and uncertain about reinvesting in stocks and bonds.
Reducing Bets on Bitcoin and Banking Business
Fink then went on to say that large pension funds are very hesitant to abandon cash, especially in the private equity area, as they don't see quick returns due to the slowdown in commercial transactions and initial public offerings.
He said, "More and more clients are keeping higher cash balances to fulfill their debt obligations." He bets that if private equity relaxes a bit, funds will flow faster into bonds and other money-making areas.
Now, let's talk about Bitcoin, because BlackRock isn't sitting idle.
You know they launched a spot Bitcoin ETF, right? Now guess what? It's on fire! Its assets surged to $1 billion, as if nothing happened, and now it's at $1.87 billion. This brought the total ETF inflows for the quarter to $6.7 billion.
Fink is also heavily investing in private markets and large projects to help reduce carbon emissions and digitize more regions of the world. With the push of a $1.25 billion new debt, they're even gearing up for a massive acquisition of Global Infrastructure Partners with $300 million.
The CEO is also keen on attracting new clients for BlackRock's technology and retirement services. He believes this is just the beginning of bigger victories. Their technology revenue reached $37.7 billion, increasing by $370,000 from last year.
Do they have Aladdin platform? It's going after big trades, and there are more sources.
Adapting to Change and Preparing for Retirement
Speaking of big numbers, nearly $50 billion of the assets they managed this quarter mainly came from stock market operations. The S&P 500 index presented its best first quarter performance since 2019. Bond fund investments amounted to $4.2 billion, and stock fund investments amounted to $1.8 billion. Overall, long-term fund inflows reached $7.6 billion. Even their operating profit margin has increased to 35.8%.
In terms of personnel allocation, Chief Financial Officer Martin Small said they will maintain team size stability this year, just as they have in recent years. Fink believes artificial intelligence will help them do more with fewer people. But the stock market doesn't seem too happy. BlackRock's stock price fell 2% on Friday afternoon, after ending last year with a 5% gain, down more than 25% in 2024.
Now, let's discuss something very serious - retirement.
Fink also lamented the retirement crisis. In his annual letter to CEOs and investors, he explicitly stated: the United States needs to work together because our current retirement plans and social security simply cannot solve this problem. Over half of BlackRock's managed assets are related to retirement funds.
Fink also tries to bridge the gap in the fierce debate about climate change and investment responsibility. Last year, he spoke with leaders from 17 countries and pushed for what he called "pragmatic energy."
This guy thinks we need both fossil fuels and future green energy. If adopting clean energy means freezing in winter, sweating in summer, and no affordable solutions, then no one will support the move.
Yes, that's right. |
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Post time 20-4-2024 16:36:54
