BlackRock's assets under management surpassed $15 trillion in the third quarter, setting a new record, as strong net inflows and a diversified business mix drove revenue up 19% year-over-year, while the private credit business also demonstrated relative resilience.
On October 14, before the US market opened, BlackRock released its third-quarter earnings report, revealing that the company's assets under management reached $15.49 trillion, a historic record. This staggering figure is equivalent to half of the United States' full-year nominal GDP (approximately $31 trillion to $32.5 trillion).
BlackRock's net inflows for the quarter totaled $205 billion. Revenue rose 19% year-over-year to $7.75 billion, with GAAP earnings per share of $10.57 and adjusted earnings per share of $15.93.
On the day the earnings were released, BlackRock's stock experienced a clear "spike and retreat" pattern, surging as much as 5% in early Wednesday trading before paring all gains to close flat. However, buying pressure re-emerged the following day on Thursday, driving the stock to a strong rebound, closing up more than 4%.
Record Net Inflows, CEO Emphasizes Entering Strongest Quarter
BlackRock Chairman and CEO Larry Fink stated in the earnings report that clients entrusted the firm with $205 billion in net inflows during the quarter, bringing cumulative net inflows over the past year to $869 billion. He noted:
We are entering the seasonally strongest fourth quarter with accelerating momentum.
The flagship iShares ETF product line attracted nearly $135 billion in net inflows during the quarter, serving as a key source of inflows. The company also repurchased $550 million worth of stock during the same period. Fink said in the statement:
Market fundamentals are strong, driven by new technologies, with corporate profit margins and earnings momentum continuing to improve.
Looking ahead to the fourth quarter, he said the company has ample project pipelines across multiple business lines, including private markets and retirement funds.
Additionally, BlackRock's artificial intelligence infrastructure partnership completed its first deployment during the quarter, and its private markets business has raised a cumulative $68 billion over the past twelve months.
Private Credit Redemption Pressure Eases at the Margin, but Industry Risks Remain
Since the start of the year, the private credit industry has faced broad headwinds, with concerns over software industry loan exposure and large-scale redemption requests continuing to weigh on the sector. BlackRock's private credit business has shown relative resilience, with net inflows increasing by $5 billion quarter-over-quarter.
BlackRock Chief Financial Officer Martin Small said during the analyst call that investment demand for private credit remains broadly solid. He added:
We believe there is a larger and more durable opportunity in providing private high-grade credit across the entire platform, which also helps deepen client relationships.
On the redemption pressure front, the redemption request ratio for BlackRock's corporate lending fund declined from 13.3% in the second quarter to approximately 11.5% in the latest quarter, showing marginal improvement.
However, rating agency Moody's warned in an October 14 report that actual conditions may be more severe than the disclosed default rates suggest. Moody's noted:
Dragged down by a combination of persistently elevated interest rates, refinancing difficulties, redemption pressure, and insufficient transparency, asset quality risks are accumulating among weaker middle-market borrowers in the US private credit market.
Comments