BlackRock beat Wall Street estimates for second-quarter profit on Wednesday as a stock market rally lifted the value of client assets and investors poured money into its exchange-traded funds, sending its shares up 6% in premarket trading.
Assets managed by the New York-based firm rose to a record $15.34 trillion in the quarter, up from $12.53 trillion a year earlier and $13.89 trillion in the first quarter.
Major U.S. equity indexes 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.
The benchmark S&P 500 index, a gauge of large-cap U.S. equities, gained 15% in the quarter.
The world's largest money manager pulled in $192 billion of client cash during the period, underpinned by strength in its iShares ETF franchise. That compares with $68 billion a year earlier and $130 billion in the first quarter.
Equity products accounted for $71.6 billion of net flows in the quarter, while fixed-income products accounted for $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 $13.91 per share in the three months ended June 30, topping expectations of $12.59, according to estimates compiled by LSEG.
The company increased its planned share buybacks in 2026 to $2 billion from $1.8 billion. PRIVATE MARKETS PUSH
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 $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.
Retail-focused private credit investment vehicles such as BlackRock's HPS Corporate Lending Fund (HLEND) have faced slowing flows and elevated redemption requests in recent months as investor concerns around the asset class intensified.
BlackRock maintained the standard 5% cap on quarterly redemptions at HPS' flagship non-traded private credit fund, HLEND, after investors sought to withdraw 13.3% of shares in the second quarter.
Private credit net inflows were $6 billion in the reported period, while infrastructure hauled $5.2 billion. Overall, private markets net inflows stood at $15.4 billion.
Fink earlier this year said institutional demand for private credit was accelerating despite market noise around the asset class.
The firm has set a target of $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.
