BlackRock boss gloomy while profit ticks up

BLACKROCK chief executive Laurence Fink has issued a warning over the health of global markets as the world’s largest money manager beat expectations to post almost flat profits.

He said the markets were “quite fragile” despite a powerful rally in the first quarter, driven in part by an easing in turmoil in Europe.

Major investors have begun to move some assets from cash and short-term bonds to equities and longer-term debt but there has yet been no “major shift” in investor attitudes, Fink said.

Blackrock’s net income inched up 0.7 per cent to $572m (£356.97m), or $3.14 per share compared to the same quarter a year before. Revenue dropped 1.45 per cent to $2.25bn.

Assets under management hit $3.68 trillion, up five per cent during the quarter and one per cent from a year earlier. Investors continued to choose indexed funds over actively managed accounts, which typically generate higher fees, although not necessarily higher profit margins.

The popular iShares exchange-traded fund business attracted a net $18.2bn, up 74 per cent on the quarter last year.

Fink said “renewed” global confidence had been driven by European stability after the European Central Bank pumped the system with more than €1 trillion (£817bn) of cheap cash.

During the quarter Blackrock launched “Investing for a New World”, its global advertising campaign, but cut operating expenses three per cent to $1.4bn after reducing office occupancy, fund and pay costs.

Fink also ruled out further big deals, saying: “I am not here thinking that we’re ever going to do a large merger again.”