BlackRock Inc., the world's largest asset manager, posted a small rise in second-quarter profit as the company saw net outflows for the first time in nearly three years.

Net outflows totaled $36.6 billion, with investors pulling out $7.3 billion from BlackRock's long-term funds. It is the first time that the New York-based firm has posted outflows since the third quarter of 2012.

The bulk of those outflows were from large international institutional investors pulling funds from low-fee index-based products. CEO Larry Fink told Reuters in an interview that those investors put the money into cash or reallocated into active BlackRock strategies.

Ten of BlackRock's largest institutional clients have pulled $40 billion from BlackRock over the past two quarters, he said.

"It's raining in some parts of the world and some of these countries have built large rainy day funds," Fink said.

But many of these same investors reallocated into BlackRock's more profitable active strategies, according to the firm. BlackRock saw $2.5 billion in net inflows into its institutional active strategies.

Overall, investors poured $10.85 billion into BlackRock's exchange-traded funds, with the lion's share going into equity funds.

Retail flows totaled $10.8 billion, the bulk into fixed income funds.

The inflows into active strategies and ETFs are key to BlackRock because they garner higher fees than institutional index strategies.

For every $10,000, an investor in a BlackRock retail fund pays around $64 a year, compared with $34 for an exchange-traded fund and $10 for institutional clients, according to the firm.

"If you think about what our ambitions were three years ago, we wanted to be known as much as an active manager as an index manager," Fink told Reuters Wednesday morning. "We have certainly proven that in fixed income, we have proven it in multi-asset, and we are proving it in our model-based active funds."

However, BlackRock still has a ways to go in gaining market share among registered investment advisers (RIAs), Fink said on an analyst call Wednesday. "We are still way behind other firms with regard to the RIAs," he said.

BlackRock is looking at how it can bring some if its risk management tools, like its Aladdin platform, to this audience, Fink said.

And despite BlackRock's sweet spot in fixed income, Fink said he is not worried that investors will rush out of bonds if the Federal Reserve raises rates later this year.

"Seventy percent of BlackRock's bond holders are insurance companies and pension funds," Fink said, noting that these institutions have long time horizons. "People don't leave fixed income... it's one of those myths."

BlackRock reported that third quarter profit rose to $819 million, or $4.84 per share, for the quarter ended June 30, up from $808 million, or $4.72 per share, a year earlier.
On an adjusted basis, BlackRock earned $4.96 per share, handily beating analysts' average estimate of $4.80, according to Thomson Reuters I/B/E/S.

BlackRock ended the quarter with $4.7 trillion in assets under management, up from $4.6 trillion a year earlier.

BlackRock's shares were trading around $344 per share in morning trading, flat for the day.