BlackRock’s shares rose 0.4 percent at 9:36 a.m. in New York, extending their gains this year to 5.4 percent.
Revenue Falls
BlackRock’s revenue fell 3.5 percent to $2.8 billion from the second quarter of 2015. Performance fees declined 46 percent to $74 million, and base fees decreased 1.8 percent to $2.49 billion. Investment advisory, administration fees and securities lending revenue were impacted by a shift from equities to fixed income and cash.
Fink has predicted consolidation in the asset management industry as firms have difficulty beating their benchmarks and a new Labor Department rule will benefit passive strategies. In addition to BlackRock, Pacific Investment Management Co. and Grantham Mayo Van Otterloo & Co. have cut jobs this year.
BlackRock has been able to benefit from the shift toward passive investing, because it is the largest provider of exchange traded funds. Clients added a net $1.5 billion in long-term assets during the quarter, led by $10 billion in inflows into the firm’s fixed income ETFs. Retail clients pulled $6.3 billion, including $4.9 billion from equities.
Assets under management increased to $4.9 trillion from $4.7 trillion at the end of March.