BlackRock AUM drops 14% despite strong inflows

BlackRock saw a 14.4% drop in assets under management in 2022, despite $300bn in inflows for the firm.

The world's largest asset manager reported that its AUM had dropped to $8.6trn in the last quarter of 2022, compared to $10trn in the same period a year ago.

Quarterly, the firm's AUM was up 8% from the third quarter, when they stood at $8trn.

This decline came despite $114bn in inflows in the last quarter of the year, or $300bn for all of 2022, due to poor market performance. The S&P 500 fell 19% in 2022, while the Bloomberg US Aggregate index fell 14%.

"We are not immune to complex and volatile market conditions," CEO Larry Fink said in a memo to staff.

"The current operating environment is unlike anything we have seen in decades, and 2022 was a year of huge transition for geopolitics and markets."

Fink outlined various reasons for the drop in markets, including soaring inflation, supply chain disruption, rising interest rates and "a deepening of political polarisation".

Flows

In the last quarter, ETFs continued to be BlackRock's biggest draw, bringing in $89.7bn in inflows, while active flows totalled $76bn.

Meanwhile, fixed income strategies soared to the top, bringing in $115.5bn for the quarter, while equity and multi-asset saw net inflows of $29.7bn and $2.1bn respectively.

However, alternatives experienced net outflows of $1.7bn in Q4, as while illiquid alts reached $4.4bn in inflows, net outflows to liquid active strategies and currency and commodities saw $1.9bn and $4.2bn in outflows respectively.

Restructuring

Revenue also saw a dip, falling 15.1% from the fourth quarter of the year before, from $5.1bn to $4.3bn, driven by a decrease in base fees of $572m. However, this was a 0.6% increase from the third quarter of 2022.

BlackRock also addressed the various planned layoffs and restructuring that had occurred within the organisation, after news last week that the firm was planning to cut 500 jobs.

On a conference call on Friday (13 January), executives said that headcount would be "broadly flat" throughout 2023, and said that it had spent $91m to "restructure" the firm.

However, Fink said that BlackRock's employee base will still be 6% larger than a year ago, adding "we must invest in people and technology".