BlackRock assets hit record but Fink warns of market anxiety

By Davide Barbuscia and Pritam Biswas

(Reuters) - BlackRock's assets increased to a record high value in the first quarter, but the CEO of the world's largest asset manager said anxiety was dominating markets, even if the recent selloff did not pose risks to financial stability.

Assets managed by the New York-based firm increased to $11.58 trillion from $10.47 trillion at the end of the same three-month period a year earlier, and from $11.55 trillion at the end of last year, it said on Friday.

That rise came despite broader weakening in U.S. stocks in the first quarter, as market optimism over U.S. President Donald Trump's return to the White House was followed by economic uncertainty caused by announcements of large U.S. tariffs on trade partners.

"Uncertainty and anxiety about the future of the markets and the economy are dominating each and every client conversation," BlackRock's CEO and Chairman Larry Fink said.

"But we've seen this before, when there are big pivots in the world, big structural changes in the market ... BlackRock stayed in front of our clients and made some of our greatest leaps forward," he said, referring to the global financial crisis and the pandemic.

Fink said in conversations with clients more questions were being asked about reallocations to Europe as U.S. markets experience high volatility and European countries look to boost economic growth through higher government spending.

But he added: "Are we going to see a systematic reallocation into other parts of the world? We have not seen that yet."

The benchmark S&P 500 index fell 4.6% in the first quarter of 2025, its worst start to a year since 2022.

A sharp selloff in U.S. government bonds, sparked by tariff tensions, rattled markets this week, triggering dislocations as hedge funds unwound leveraged bets and investors fretted over potential long-term damage to U.S. financial stability.

Fink said the market weakness was damaging not just for Wall Street but for retirement savings of ordinary people too.

However, he did not see systemic risks. "The markets have proved to be quite successful and work quite well," he said.

BlackRock's net income declined to $1.51 billion, or $9.64 per share, in the three months ended March 31, from $1.57 billion, or $10.48 per share, a year earlier. Adjusted for items such as acquisition-related costs, earnings per share were $11.30, up 15% year on year.

Total expenses in the quarter rose to $3.58 billion from $3.04 billion last year.

BlackRock saw long-term net inflows of $83 billion, up from $76 billion a year ago. A large part of the long-term inflows was captured by fixed income products, at $37.7 billion, down from $41.7 billion a year ago.

Equity product inflows in the first quarter stood at $19.3 billion, up from $18.4 billion a year earlier.

"BlackRock is among the largest providers of bond funds, while also having significant size advantages in equities, alternative assets and cash products," Kyle Sanders, financial services analyst for Edward Jones said in a note.

"This diversity reduces earnings volatility through the course of market cycles," he said.

BlackRock shares were down 1.1% in early trading. The stock has lost over 10% since Trump announced broad tariffs last week.

(Reporting by Pritam Biswas in Bengaluru, Davide Barbuscia in New York; Editing by Devika Syamnath, Kim Coghill, Chizu Nomiyama and Rod Nickel)