Client inflows boost revival at BlackRock

US ASSET manager BlackRock suffered a 20 per cent fall in second-quarter profit compared to last year, but saw results improve from the first three months of the year, it said yesterday.<br /><br />The firm, which will become the world&rsquo;s largest asset manager upon completion of its $13.5bn (&pound;8.2bn) acquisition of Barclays Global Investors (BGI), said net income had fallen to $218m, or $1.59 per share, down from $274m, or $2 per share, in the same period of 2008.<br /><br />Removing non-recurring costs from the firm&rsquo;s results, BlackRock&rsquo;s earnings reached $1.75 per share, well ahead of an analysts&rsquo; consensus forecast of $1.56.<br /><br />Revenue sank 26 per cent from $1.39bn last year to $1.03bn, but rose from the $987m seen in the first three months of the year, changes that the company said tracked fluctuations in its assets under management (AUM).<br /><br />AUM were $1.373 trillion for the quarter, down from last year&rsquo;s $1.427 trillion but up from $1.283 trillion at the end of March.<br /><br />The rise reflected $15.2bn of new money deposited by the firm&rsquo;s clients into its funds during the quarter.<br /><br />&ldquo;While markets were significantly more favourable during the second quarter, they remain choppy in the face of conflicting signals about global economic conditions,&rdquo; said Laurence (Larry) Fink, BlackRock&rsquo;s chief executive.<br /><br />Fink, who wrapped up the deal to buy BGI earlier this year, said that investors&rsquo; and clients&rsquo; view of the deal was &ldquo;favourable&rdquo;.<br /><br />BlackRock will manage some $2.7 trillion in assets on completion of the merger, making it the world&rsquo;s largest money manager.<br /><br />The deal is expected to close in the fourth quarter, with executives predicting that integration costs would reach between $300m and $500m during next year.<br /><br />The firm has also benefited from its position as a key adviser to the US government on the valuation of distressed assets.<br /><br />BlackRock was one of nine firms chosen by US authorities to help administrate the Public-Private Investment Programme, which buys assets considered difficult to value from banks.