BlackRock’s hedge funds enjoyed a stellar year, and the money management giant profited handsomely.
The New York-based firm, the biggest publicly-traded asset manager, said its fourth-quarter earnings jumped 90% to $322 million. Its revenue rose 42% to $1.4 billion, thanks in no small part to a four-fold increase in performance fees.
“We had an extraordinary year in terms of performance fees,” CEO Laurence Fink said. “Our fixed-income hedge funds navigated very carefully in the credit crisis.”
BlackRock’s Obsidian hedge fund, a fixed-income offering, returned almost 30% last year. In addition, the firm acquired Quellos Group’s $20 billion hedge fund unit, helping push its alternative assets under management up 48% to $71 billion. Performance fees soared from $40 million in 2006 to $153 million last year.