BlackRock's second-quarter profit outpaced Wall Street estimates on Wednesday as a stock market rally lifted the value of client assets and investors poured money into the company's exchange-traded funds, sending its shares up more than 7 percent.
Assets managed by the New York-based company jumped to a record US$15.34 trillion in the quarter, up from US$12.53 trillion a year earlier and US$13.89 trillion in the first quarter.
The world's largest money manager pulled in US$192 billion of client cash during the period, underpinned by strength in its iShares ETF franchise. That compares with US$68 billion a year earlier and US$130 billion in the first quarter.
Equity products accounted for US$71.6 billion of net flows in the quarter, while fixed-income products accounted for US$92 billion.
"Market fundamentals are strong and well supported, with higher margins and earnings momentum catalyzed by new technology. The scale and depth of our client relationships globally have never been greater," CEO Larry Fink said in a statement.
On an adjusted basis, BlackRock earned US$13.91 per share in the three months ended June 30, topping expectations of US$12.59, according to estimates compiled by LSEG.
The earnings beat was "broad-based," Barclays analysts said in a note, adding that profit margins expanded more than Wall Street expected.
The company said its second-quarter adjusted operating margin was 45.9 percent, its highest in almost five years.
The company increased its planned share buybacks in 2026 to US$2 billion from US$1.8 billion.
Major US equity indexes had ended June with their biggest quarterly gains since 2020 as optimism grew over corporate earnings and investors looked beyond the volatility sparked by the conflict in the Middle East.
Traditionally known more for its strong presence in stocks and bonds than private markets, BlackRock stepped up efforts in recent years to become a major player in alternative assets, which include everything other than stocks and bonds.
The company has splurged about US$28 billion to buy infrastructure investor Global Infrastructure Partners, private credit firm HPS Investment Partners, and data provider Preqin, turbocharging its private markets push.
However, the multi-trillion-dollar private credit sector has drawn intense scrutiny amid concerns about lending standards and fears of AI-driven disruption at software companies.
On BlackRock's conference call on Wednesday, Fink said there was "idiosyncratic risk" in private credit late last year. "But we've seen actually a stabilization in terms of credit," Fink said. "And we're not seeing any real change in the credit quality of payments from our private investments."
Private credit net inflows were US$6 billion in the reported period, while infrastructure hauled US$5.2 billion. Overall, private markets net inflows stood at US$15.4 billion.
The firm has set a target of US$400 billion in gross private markets fundraising from 2025 to 2030.
Private assets generate significantly higher fees than exchange-traded funds, a core part of BlackRock's business through its market-leading iShares franchise.
With Wednesday's gains, BlackRock shares erased year-to-date declines and are now up about 3 percent. But they still trail the over 10 percent increase for the S&P 500 in 2026.
Reuters
