Profits leap 77% for world's biggest fund manager BlackRock

BlackRock, the world's largest money manager, yesterday said a recovery in world stock markets had helped it achieve a 77 per cent jump in earnings in the fourth quarter of the year, ahead of analysts' expectations.

The US giant, which manages some $3.6 trillion (2.3tn) of assets in its own funds, and which bought Barclays' Global Investors business unit a year ago, attracted a net inflow of $23.9 billion from clients in the quarter with its iShares exchange-traded fund unit alone accounting for $13.4bn.

Fourth-quarter adjusted earnings totalled $670 million, or $3.42 per share. Analysts had expected the figure to come in at $2.90 per share.

Elizabeth Bramwell, manager of the Sentinel Growth Leaders fund, which owns shares in BlackRock, said the results highlighted the company's success in delivering across its global operations. "They have the ability to offer a diversity of products and geographic diversity that's just unparalleled," she said.

Chief executive Laurence Fink said he was continuing to invest heavily in the firm with projects including a new internal securities trading platform which is expected to begin operation in the second half of 2011. Fink said BlackRock had been "spending a great deal of money" to build a system that will allow the firm's portfolio managers and customers to trade among themselves without relying on external dealers and public exchanges.

Fink said he had seen "no indication" that Barclays wants to sell any of the BlackRock shares it acquired as part of the 2009 sale of its investment unit but that the company would look to buy them back if that changed.

Meanwhile, UK fund manager F&C yesterday hit back at rebel shareholder Sherborne saying signs of a return of clients showed its strategy was working.

The 140-year-old company said it was managing 105.8bn in assets at 31 December, up 8 per cent on the year, supporting claims that the group was back on track after a phase of disappointing growth.

F&C Chief executive Alain Grisay said: "Our strategy of focusing on higher-margin business is working."

The funds house said it had 1.5bn of new institutional business in the pipeline, and expected "to see continued progress in institutional business flows and improving fee margins during 2011."

JP Morgan analysts said in a note that the company's low-margin insurance fund business lost more than expected, although performance was better than expected in higher margin institutional funds.

Grisay said he had met recently with Aviva, F&C's third-largest investor, which has publicly come out in support of Sherborne, but declined to comment on whether the two had acted in concert.

Sherborne, which calls itself a turnaround specialist, wants to replace chairman Nick Mac- Andrew with its own founder Edward Bramson at a shareholder meeting next month.It has criticised F&C's board for presiding over poor performance compared to the sector in recent years.