BlackRock's Fink Comments on Cash
Last week, BlackRock mentioned "cash" and money markets a couple of times on its most recent earnings call. CFO Gary Shedlin commented, "Finally, despite a difficult quarter for the cash management industry driven by both seasonal and repatriated quarterly tax payments, BlackRock's cash management business saw net inflows of $6 billion as our product breadth, scale and technology-first distribution strategy is resonating with clients and leading to differentiated business performance." CEO Larry Fink told analysts on the call, "These rising rates and a flattening curve have made cash not a safe place but now also a more profitable place for investors to stand by and wait. While investors' caution has impacted industry flows, BlackRock continues to benefit from the value of our diverse global investment and technology platform. Revenues increased 11%, operating income increased 16%, and our earnings per share increased 28% year-over-year. We generated $20 billion of total net inflows, positive across active index and cash in the second quarter. We have seen markets and uncertainty like this before. As clients globally grapple with this uncertainty, they're reaching out to BlackRock with more frequency, with more momentum. The dialogues with the clients to date have never been stronger. We believe that the long-term trends at BlackRock is strategically positioned to address -- remain intact." He added, "Cash management is another area where we are gaining share, and we now manage $457 billion in cash assets. The cash strategy is earning between approximately 2 and 2.5% [sic], levels not seen in the past decade. Clients are using cash as not only as a safe asset but one that provides attractive returns, especially in this market environment. BlackRock generated $6 billion in net inflows and cash strategies in the quarter, driven by the benefits of our global scale and tech-enabled distribution. This highlights one of the true benefits and differentiators of BlackRock's diverse business model." He added, "Technology is also a strategic differentiator and one of our largest priorities at BlackRock. Asset managers, wealth managers and custodial banks globally are rethinking their business models and looking for ways to operate more efficiently. Insurers and banks are facing regulatory consolidation in involving regulatory requirements. These changes are driving increased demand for BlackRock's broad-based technology services, and digital tools like Institutional Aladdin, Aladdin Wealth, Provider Aladdin and Cachematrix."
