BlackRock profits fall by 84 per cent

The asset manager BlackRock continued the sector’s recent torrid time when it yesterday posted a bigger-than-expected 84 per cent drop in fourth-quarter profits as sliding markets hurt fees and it marked down the value of investments in hedge funds. The biggest publicly traded US asset manager was cautious about market conditions in 2009.

The New York-based company posted a net income of $53m for the quarter compared with $322.4m, last year. Adjusted for certain items, earnings for the quarter were 68 cents a share. That was below analyst estimates.

BlackRock’s income was reduced by non-operating expenses of $293m, including investment losses of $124m from investing its own capital in hedge funds and $91m from investing in real estate products.

Assets under management declined to $1.31trn at the end of December from $1.36trn a year earlier, prompting performance fees to slump to $23.7m from $152.7m.