(Reuters) - Assets managed by BlackRock hit a record $10.65 trillion in the second quarter thanks to rising client asset values and as investors pumped money into the company's ETFs, the world's largest asset manager said on Monday.
Shares in the company rose 1.2% in premarket trading.
Stock markets have scaled record highs in the last few months amid rising hopes of a soft landing for the U.S. economy and an investor frenzy around artificial intelligence-linked stocks.
The benchmark S&P 500 index jumped about 4% in the reported quarter, boosting BlackRock's assets under management to $10.65 trillion, up from $9.43 trillion a year earlier and $10.5 trillion in the first quarter.
Fees earned from managing and servicing its client assets make up a substantial portion of the company's revenue.
BlackRock registered total net inflows of $81.57 billion in the quarter, slightly above $80.16 billion a year earlier. Exchange-traded funds captured the majority of flows, at $83 billion, their best start to a year on record, BlackRock said.
"BlackRock is executing on the broadest opportunity set we've seen in years, including in private markets," CEO Larry Fink said.
Last month the company agreed to buy data provider Preqin in a deal valued at nearly $3.2 billion, underscoring its push to become a major player in private markets.
The acquisition follows BlackRock's $12.5 billion deal this year to buy Global Infrastructure Partners, a bet on alternative assets that will put the firm at the heart of investing in infrastructure projects around the globe.
"BlackRock's spending to bolster its capabilities in private markets will help reduce its reliance on low-fee generating iShares ETFs and position the firm to capitalize on the strong long-term growth opportunity within private assets over the next decade," said Kyle Sanders, senior equity research analyst at Edward Jones, in a note.
Investment advisory and administration fees, typically a percentage of AUM, rose 8.6% to $3.72 billion.
Revenue from technology services jumped 10% to $395 million, reflecting sustained demand for its investment risk management platform Aladdin.
BlackRock's total revenue jumped 8% to $4.81 billion.
Net income rose to $1.50 billion, or $9.99 per share, in the three months ended June 30, from $1.37 billion, or $9.06 per share, a year earlier.
BlackRock's shares have risen 2% so far this year, underperforming the 17.7% gain of the S&P 500 index.
Reporting by Arasu Kannagi Basil and Davide Barbuscia
Editing by Pooja Desai and Jan Harvey
