(Bloomberg) — BlackRock Inc . pulled $51 billion of client money into its long-term investment funds in the second quarter, pushing the world's largest money manager to a record $10.6 trillion in assets.
Investors added $83 billion to ETFs and $35 billion to fixed income overall, New York-based BlackRock said Monday in a statement.
“Organic growth was driven by private markets, active retail fixed income and increased flows in our ETFs, which had their best start to a year on record,” Chief Executive Larry Fink said in the statement. .
The company also had $30 billion of net inflows into money management and money market funds in the period. Total net flows were $82 billion. Net flows into long-term mutual funds missed the $86 billion average estimate of analysts polled by Bloomberg.
The firm's ETF inflows included growth in its higher-fee Strategic and Precision products, offsetting the impact of $35 billion of institutional outflows from its index funds.
It added about $2 billion to its illiquid alternatives business. Performance fees increased $46 million from a year ago, driven in part by higher income from liquid alternatives.
Money managers are starting to bounce back after a bumpy ride through the Federal Reserve's interest rate hikes and volatility in bond markets over the past two years. The S&P 500 rose about 4% in the second quarter after a roughly 10% gain in the first three months of the year, and investors are betting the central bank will begin cutting rates in September from a four-decade high .
This is driving client cash flows into fixed income funds, with asset managers noting the risks of going too long in money market funds that may no longer be able to deliver 5% yields after rates go down.
“The strong fixed income flows that BlackRock delivered this quarter should boost investor confidence that the long-awaited big rotation into fixed income is starting to materialize,” Kyle Sanders, a senior analyst at Edward Jones, said in a note. on Monday.
BlackRock is positioning itself as a one-stop shop for a wide range of actively managed and indexed mutual funds and ETFs as it seeks to expand its business into high-growth, profitable private assets. The company's $12.5 billion acquisition of Global Infrastructure Partners will add about $100 billion in assets to the company and place the firm in the top tier of infrastructure investors.
Last month, BlackRock announced a £2.55bn acquisition of private markets data firm Preqin.
Fink and senior executives said Preqin will enable BlackRock “indexing private markets” and use data and analytics to expand access to alternative assets.
BlackRock's adjusted net income per share rose 12% from a year earlier to $10.36, beating Wall Street's average estimate of $9.93. Revenue rose 8% to $4.8 billion from a year earlier.
BlackRock shares are up about 2% this year as of Friday's market close, trailing the S&P 500 Index's 18% advance.