BlackRock Inc.’s (BLK) fourth-quarter earnings jumped 90% as the investment-management firm benefited from strong demand for its advisory and alternative-investment services.
Net income at the New York company rose to $322.4 million, or $2.43 a share, from $169.4 million, or $1.28 a share, a year earlier. The latest quarter’s results include a 1-cent integration charge associated with the company’s September 2006 acquisition of the operations of Merrill Lynch Investment Managers, while such charges a year earlier totaled 25 cents.
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Assets under management totaled $1.357 trillion as of Dec. 31, up $57.1 billion since Sept. 30 and $232 billion from a year earlier. BlackRock said it received $30.7 billion in net new money from investors as volatile markets drove investors to safer cash-management products, its conservative funds and to its alternative investment products. It sees the same factors driving growth in 2008.
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The quarterly results were bolstered by the Quellos acquisition, which BlackRock closed on Oct. 1 and which gave it $21.9 billion of new assets.
“Although we were not completely unscathed by the market, we were well positioned and have benefited in a number of ways,” Chairman and Chief Executive Laurence D. Fink] said. “Worldwide, people are shying away from risk. Being well-positioned in terms of risk-management, I think we are going to be a beneficiary in 2008 of the market turmoil.”
BlackRock began as a bond-trading firm about 19 years ago under Fink, a co-founder, but has diversified over the years into equities and alternative investments. It competes with such broad-based firms as Legg Mason (LG) and AllianceBernstein Holding (AB).
Today, 34 percent of its $1.36 trillion of total assets are in equities and balanced products, 36 percent in fixed income, 23 percent in cash management products and 5 percent in hedge funds and other alternative investments.
BlackRock makes money mainly by charging fees on the investments the company manages for clients. Performance fees were $153 million, compared with $40 million, relating to higher performance fees in international equity separate accounts, energy and fixed income hedge funds, fund of funds of Quellos Group LLC, which it acquired, and real estate products.
“The markets were exceptionally volatile during the fourth quarter as investors digested the implications of the U.S. housing slump, the ongoing sub-prime debacle, a sustained liquidity contraction and a weaker dollar,” Fink said. He noted that low interest rates and a weaker dollar suggest increased allocations outside the U.S. over time, as well as faster adoption of new strategies.
Merrill Lynch & Co. (MER) owns 49% of BlackRock, a stake it acquired last year when it agreed to combine its asset-management business with BlackRock. PNC Financial Services Group Inc. (PNC) owns another one-third stake.
Using the search results on the website, the following Covered Call Investing options for Blackrock and its competitors were obtained.
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|AB||62.01(-1.67)||ABCL||08 MAR 60.0 (58)||4.3||6.9||4||4|
|AB||62.01(-1.67)||ABCM||08 MAR 65.0 (58)||2.15||3.5||3.6||8.6|
|BLK||213.32(+5.31)||BLKCB||08 MAR 210.0 (58)||15.8||7.4||6.3||6.3|
|BLK||213.32(+5.31)||BLKCD||08 MAR 220.0 (58)||11||5.2||5.4||8.7|
|MER||57.66(-0.39)||MERCY||08 MAR 57.5 (58)||3.9||6.8||7||7|
|MER||57.66(-0.39)||MERCL||08 MAR 60.0 (58)||2.7||4.7||4.9||9.2|
|PNC||60.88(+0.88)||PNCCL||08 MAR 60.0 (58)||4||6.6||5.5||5.5|
|PNC||60.88(+0.88)||PNCCZ||08 MAR 62.5 (58)||2.65||4.4||4.6||7.3|
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