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BlackRock’s Fink Says Economic Woes Are Challenging Investors

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Rising interest rates, inflation and higher energy prices are posing challenges to investors that they haven’t seen in decades, BlackRock Inc.’s Larry Fink said after the company reported second-quarter earnings that missed Wall Street estimates.

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(Bloomberg) — Rising interest rates, inflation and higher energy prices are posing challenges to investors that they haven’t seen in decades, BlackRock Inc.’s Larry Fink said after the company reported second-quarter earnings that missed Wall Street estimates.

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“Markets are reflecting investor anxiety as investors evaluate the potential impact of these pressures,” Fink, the firm’s chief executive officer, said during BlackRock’s earnings call Friday.

The results reflected Fink’s comments, showing that clients slowed the stream of money they added to its core investment funds. The choppy macro and economic background in the first half is prompting investors to reconsider the high-flying stocks and funds they’d previously embraced and making it harder for financial firms to keep growth on track.

BlackRock shares rose as much as 2.1% in New York trading.

Net inflows into BlackRock’s core products, called long-term funds, totaled $69 billion for the three months ended June 30, $40 billion less than analysts expected. In the first quarter, that figure was $114 billion. Total net flows, including cash-management accounts, were $90 billion, New York-based BlackRock said in a statement. 

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BlackRock’s assets under management, which crossed the $10 trillion threshold for the first time toward the end of last year, have come sliding back down. They totaled $8.5 trillion at June 30, the lowest in almost two years.

Investors pulled $10.3 billion from BlackRock’s actively managed funds in the second quarter. A year earlier, they added $63 billion. BlackRock’s cash-management funds had record levels of assets in the quarter, Fink said, and took in $21 billion of net inflows during the market declines.

Adjusted earnings per share were $7.36, missing the $7.90 average estimate of analysts surveyed by Bloomberg.

Shares of asset managers and major banks have plunged this year, many of them exceeding the declines in the broader market. BlackRock’s fell 36% through Thursday.



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