BlackRock quarterly profit below expectations

World's biggest asset manager's actively managed funds ended the fourth quarter with $5.98 trillion in assets under management, down from $6.44tn in the preceding quarter

Pedestrians pass in front of BlackRock offices in New York. The company has seen earnings disappoint. Bloomberg

BlackRock  reported a lower than expected quarterly profit on Wednesday, as market volatility towards the end of 2018 prompted investors to pull out money from the world's biggest asset manager's actively managed funds.

They pulled out $34.6 billion from the company's more actively traded and higher cost institutional equity index accounts and focused more on low-risk, low-cost exchange traded funds.

BlackRock ended the fourth quarter with $5.98 trillion in assets under management, down from $6.44tn in the preceding quarter.

Net income attributable to BlackRock fell to $927 million, or $5.78 per share, in the quarter ended December 31, from $2.3bn, or $14.01 per share, a year earlier, when it took a one-time gain from changes in the US tax law, Reuters said.

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In the reported quarter, the company also took a $60 million charge related to job cuts last year.

BlackRock announced plans to cut 3 per cent of its global workforce, or 500 jobs, last week, according to Bloomberg. That’s the firm’s largest round of dismissals since 2016.

Chief executive Larry Fink made some management alterations this month. He named Mark Wiedman, previously the head of BlackRock’s powerhouse exchange-traded funds business, to a new global strategy role. Fink said more leadership changes are coming.

Excluding the restructuring charges, the company earned $6.08 per share, compared with $6.19 per share, a year ago.

Analysts on an average expected BlackRock to report $6.27 per share, according to IBES data from Refinitiv.