Profits plunge at BlackRock after fees fall

PROFITS at BlackRock plunged 16 per cent in the fourth quarter as fees from investment advisory work fell away amid the global turmoil.

The world’s largest money manager said net income dropped to $555m (£358.7m), or $3.05 per share, from $657m, or $3.35 per share, a year earlier. The New York group has managed the movement of investors away from active products towards passive products, which follow an index.

Its level of assets under management (AUM) reflected the turbulence of the last year. In the final quarter the AUM figure was down 1.4 per cent on the same period last year to $3.51 trillion, but up 4.78 per cent on the end of the third quarter.

The increase reflected a $143.3bn improvement in market and investment performance as stock indices rose in the quarter, and an inflow of $23.8bn of new investor cash to long-term products like equity and bond funds, particularly index products. BlackRock’s iShares ETF business had an inflow of $20.1bn in the quarter.

Chief executive Laurence Fink said market stability had improved at the start of this year but warned of the impact of regulation, low interest rates and market volatility over the coming 12 months.