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BlackRock became the first public asset manager to hit $10-trillion in assets, propelled by a surge in fourth-quarter flows into its exchange traded funds.

Investors poured a net $104bn into exchange-traded funds (ETFs) in the three months ended December 31, the firm said on Friday in a statement — a record for the company.

The world’s largest asset manager also benefited from a rally in markets, with the S&P 500 climbing 11% in the latest quarter and 27% in 2021. Investors added a net $169bn to BlackRock’s long-term investment vehicles, including ETFs and mutual funds, in the final three months of the year.

“Our business is more diversified than ever before,” CEO Larry Fink said in the statement. “Active strategies, including alternatives, contributed over 60% of 2021 organic base fee growth.”

The results reinforce BlackRock’s position atop the industry, with assets under management rebounding from a dip at the end of the third quarter. The earnings come ahead of an annual letter that Fink  sends to corporate leaders, laying out priorities on everything from boardroom diversity to climate change.

Actively managed funds, a style that includes ETFs and mutual funds, saw a net $101bn in flows. BlackRock now manages $2.6-trillion in such assets. The firm’s alternatives business, which includes hedge funds, saw $5.5bn of inflows, taking total assets to $265bn.

Employee compensation and benefits increased $218m from the fourth quarter of 2020, reflecting the firm’s move to increase staff pay as inflation surged in the US. Starting in September, base salaries rose 8% for all staff at the director level and below.

New York-based BlackRock saw adjusted earnings per share of $10.42, beating the $10.15 average estimate of analysts surveyed by Bloomberg. Revenue in the quarter was $5.11bn, missing the $5.16bn average estimate.

BlackRock fell short on revenue due to a decline in performance fees, according to Kyle Sanders, an analyst with Edward Jones. The shares fell 1.7% at 9.45am in New York trading to $852.50.

More stories like this are available on bloomberg.com



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