BlackRock earnings beat estimates as 2014 inflows set record

By Jessica Toonkel (Reuters) - BlackRock Inc, the world's largest money manager, reported a higher-than-expected quarterly profit as assets under management increased. The New York-based company ended the fourth quarter with $4.65 trillion in assets under management, up 8 percent from a year earlier. The firm had $87.8 billion in net inflows for the quarter. Long-term net inflows for the year came to $181.3 billion for an organic growth rate of 4.5 percent, up from 3.5 percent in 2013. The 2014 net inflows represent a 55 percent jump from the prior year and a record for BlackRock. "While the magnitude of the flows was quite large, it is the composition of the flows that was really interesting," BlackRock Chief Executive Officer Larry Fink told Reuters. "We now manage over $1 billion in 41 different countries across the world." Net income for the quarter fell to $813 million, or $4.77 per share, from $841 million, or $4.86 per share, a year earlier. Excluding a compensation program associated with shareholder PNC Financial Services Group Inc, earnings were $4.82 a share, beating the analysts' average estimate of $4.68, according to Thomson Reuters I/B/E/S. BlackRock's fourth-quarter flows went largely into its fixed income funds, making up 55 percent of long-term flows for the period. Investors poured $48.4 billion into BlackRock's fixed income funds in the quarter. Half of the quarter's long-term inflows went into BlackRock's iShares exchange-traded fund business, which ended the quarter with $1 trillion, a record for the company. BlackRock's active retail business posted inflows of $23 billion, ending with $534.3 billion. The institutional business posted inflows of $20.7 billion for the quarter, ending with $2.8 trillion. BlackRock's equity funds posted $28.7 billion in inflows for the quarter, while its multi-asset funds had $9.7 billion in inflows, and its alternatives funds posted $1 billion in inflows. BlackRock's large inflows into its fixed income funds and ETFs came as bond manager Pacific Investment Management Co suffered outflows following the sudden resignation of its co-founder Bill Gross in September. Fink dismissed the notion that BlackRock's fixed income flows were all due to Pimco, noting that the firm's performance and flows were strong in an array of its fixed income products. "People are putting too much focus on Pimco," Fink told Reuters. "There is a lot of money in motion ... If you look at the composition of our flows it would be hard to come to that conclusion." (Reporting by Jessica Toonkel; Editing by Lisa Von Ahn and Paul Simao)