BlackRock Q4 2020 results surpassed estimates as AUM reached a record $8.68trn from $7.43trn in the prior year, amid improving global growth prospects and increased market activity.
Investors poured money into the asset manager’s funds through election uncertainty and launch of multiple Covid-19 vaccines. Money flowed into its ETFs, equity, fixed income and alternatives.
Q4 2020 highlights
The asset manager’s total net inflows through the quarter were $126.93bn, versus $128.84bn in the prior year.
The firm’s net income was $1.55bn in the three-month-period ending 31 December 2020, up 19% from $1.3bn in the same quarter of 2019.
Revenue increased 13% to $4.48bn from $3.98bn during the period.
Investment advisory, administration fees and securities lending revenue became its biggest revenue driver, contributing $3.39bn. A year ago, the figure was $3.09bn.
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Technology services contributed $305bn to the revenue, increasing from $274m a year earlier.
BlackRock chairman and CEO Laurence Fink: “Our strategic areas of investment flourished in 2020 as we saw record client demand for active equity, sustainable, cash and alternative investment strategies, generated $185 billion of net inflows into iShares ETFs and surpassed $1 billion in technology services revenue.”
Fink also had a positive outlook for the current year.
He noted: “We begin 2021 well-positioned and intend to keep investing in our business to drive long-term growth and to lead the evolution of the asset management industry.”
Investment in Clarity AI
Meanwhile, BlackRock deepened its sustainability push by making a minority investment in sustainability analytics and data science platform Clarity AI.
Financial terms of the deal were not shared. The asset manager will integrate Clarity with its risk management platform Aladdin.
Leveraging big data and machine learning, Clarity offers insights on the social and environmental impact of over 30,000 firms.
Established in 2017, Clarity a presence in the US, UK and Spain. Its existing backers include Deutsche Börse, Kibo Ventures, Mundi Ventures, Seaya Ventures and Founders Fund.
Additionally, BlackRock also launched the Aladdin Climate software application recently. It is designed to help investors measure climate change’s physical risk along with the transition risk to a low-carbon economy on portfolios.
Last year, BlackRock launched its first global unconstrained ESG total return bond fund.