GLOBAL – BlackRock says its planned merger with Merrill Lynch Investment Managers has resulted in a “temporary” slowdown in its momentum.
The comments came as the US asset management firm disclosed that it had almost $450m (€359.3m) in net outflows in the second quarter - mostly due to withdrawals by four fixed income clients.
BlackRock announced in February that it would combine with MLIM, the asset management arm of Merrill Lynch, to create a fund management business with $1trn under management.
“The impending transaction with MLIM temporarily slowed new business momentum, although search activity appears to have picked up following rollout of the planned post-merger investment management platform to clients and their consultants,” BlackRock said in its latest earnings release today.
It added: “During the quarter, we experienced net outflows of $447m, principally as a result of investment strategy or policy changes by four large fixed income clients and a temporary slowdown in search activity following the announcement of the MLIM transaction.” A spokeswoman declined to name the clients.
Net income for the period rose to $63.4m from $53.3m in the prior year quarter, while revenues were up 32.9% at $360.7m.
Despite the latest quarterly outflows, total assets under management have risen by $49.7bn over the year to $464.1bn.
It said: “In general, flows remained favorable, particularly from international clients who funded an additional $1.3bn during the quarter, bringing total net new business from non-US investors to $10bn year-to-date and $20.6bn over the past 12 months.”
“Our second quarter financial results were solid, driven by asset growth in prior periods, a favorable shift in our asset mix and strong investment performance,” said chairman and chief executive Laurence Fink.
MLIM’s second-quarter figures were also released today.
Its net revenues rose 56% to $630m – “driven principally by net inflows and higher long-term asset values”.
Pre-tax earnings almost doubled to $240m, while firmwide assets under management were up 23% at $589bn.