NEW YORK, Jan 15 (Reuters) - BlackRock's assets reached a record high of $11.6 trillion in the fourth quarter of last year, with the world's largest money manager registering a 21% profit surge. The increase in fee income was supported by stronger equity markets.
Client assets managed by the New York-based company rose to $11.55 trillion from $10.01 trillion a year earlier and $11.48 trillion in the third quarter.
Investor confidence surged following the U.S. stock market rally post Donald Trump's presidential election victory in November, as clients bet on lower corporate taxes and deregulation.
BlackRock's strong financial performance in the quarter concluded a prosperous year, with the company aiming to reinforce its position in rapidly expanding private markets. In the past year, it invested approximately $25 billion in Global Infrastructure Partners and HPS Investment Partners.
CEO Larry Fink highlighted the positive client response to BlackRock's strategy, stating, "For many companies, periods of M&A contribute to a pause in client engagement. At BlackRock, clients are instead embracing and rewarding our strategy."
The company's net income rose to $1.67 billion, or $10.63 per share, in the last three months of the year, up from $1.38 billion, or $9.15 per share, in the previous year. BlackRock reported $201 billion in long-term net inflows in the fourth quarter, with total net inflows reaching $281.4 billion, an increase from $95.6 billion a year ago.
The majority of the long-term inflows were directed towards exchange-traded funds (ETFs), totaling $142.6 billion. Additionally, clients invested $23.8 billion in BlackRock's fixed-income products.
Assets under management are primarily influenced by the performance of investments and fund inflows and outflows. The S&P 500 index gained 2.1% in the fourth quarter and closed the year with a 23.3% increase, marking its second consecutive year of over 20% gains.
On the other hand, MSCI's global stocks index declined by 1.2% in the fourth quarter but ended the year with a 15.7% gain, achieving its second consecutive annual increase.
Kyle Sanders, senior equity research analyst at Edward Jones, stated, "Strong asset inflows this quarter contributed to a record-setting year for BLK," expressing confidence that investor engagement in equity and fixed income products is beginning to gain momentum.
In premarket trading, the company's shares were up 2%.