BlackRock has rocky first quarter

BlackRock had earnings of $242m (or $1.82 a share) in the first quarter of 2008. This was up from $195m ($1.48 a share) compared with first quarter 2007.

Adjusted earnings were $1.90 a share — 10 cents short of the consensus estimate of Wall Street analysts. The fall was partly because of declines in hedge fund and real estate investments.

"BlackRock’s first quarter results evidenced strength in our core business and the benefits of our globally diversified business model,” said Laurence Fink, chairman and CEO of BlackRock. “While we are not immune to the effects of adverse markets, we were able to offer a robust range of investment products and solutions, and to help clients with highly complex portfolios that present uniquely difficult challenges in the current market environment. Our recent successes have highlighted the breadth and depth of our platform and validated our collaborative approach with clients.”

While BlackRock had to mark down the value of co-investments in its own hedge funds and real estate pools, it recorded $3.3bn of net new business in alternative investments, including inflows in BlackRock Alternatives Advisors, which manages the company’s fund of hedge funds investments.

One of the “highly complex” portfolios BlackRock was given to manage in the first quarter was the $30bn of assets taken on by the Federal Reserve Bank of New York in the bailout of Bear Stearns and its takeover by JP Morgan Chase.

BlackRock’s new business pipeline, as of April 14, was a record $105.8bn, including $23.4bn in alternatives, equities and fixed income.