BlackRock’s assets seen topping US$15 trillion in five years’ time

BLACKROCK’S assets under management are set to exceed US$15 trillion in five years’ time, analysts at Morgan Stanley said, with the broker predicting that fixed income and cash management will help propel the investment manager’s growth.

The world’s top asset manager has already seen a boost amid the recent turmoil in the US banking sector, following the collapse of Silicon Valley Bank in March. BlackRock reported US$110 billion of net inflows for the first quarter, beating estimates, while assets rose to US$9.09 trillion.

The gains are likely to continue, according to Morgan Stanley analyst Michael Cyprys, raising BlackRock’s price target to US$861 from US$829, the second-highest among analysts tracked by Bloomberg. Cyprys, a BlackRock bull who has always had an overweight rating on the stock, identifies four “growth zones” for the firm, including fixed income, cash management, private markets and Aladdin, its investment-management technology platform. These are set to drive annual organic asset growth of 5 per cent over the next three years.

“BlackRock’s scale, diversification, disciplined investments made across market cycles and efficient operations with focus on expenses should support continued organic growth and margin expansion,” Cyprys wrote in a note. The analyst predicts that BlackRock’s assets under management should grow to US$10 trillion in the next few quarters from today’s US$9 trillion, eventually topping US$15 trillion in five years’ time.

BlackRock’s shares had declined 2.4 per cent this year through Friday’s (Apr 14) close, though they have been rebounding since mid-March. The stock rose 1 per cent on Monday. BLOOMBERG

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