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BlackRock Inc BLK-N, the world’s biggest asset manager, handily beat second-quarter profit estimates but showed a slowdown in money inflows, sending shares down about 2%.

The company’s adjusted profit of $9.28 per share leap-frogged analysts’ estimates of $8.46, according to Refinitiv IBES. BlackRock saw a 25% rise in second-quarter adjusted profit, helped by gains in its private-equity investments.

The New York-based firm ended the second quarter with $9.4 trillion in assets under management (AUM), up from $8.5 trillion a year earlier and $9.1 trillion in the first quarter.

Net inflows for the quarter were $80 billion, down from $89.6 billion a year ago and $110 billion in the first quarter, amid heightened economic uncertainties.

“While asset inflows of $80 billion were still very good, they did fall short of expectations from the Street,” said Kyle Sanders, senior equity research analyst at Edward Jones. Analysts were expecting $105 billion in inflows, he said.

Analysts also noted the inflow was more concentrated in lower fee products, such as exchange-traded funds (ETFs). “The firm’s flow mix remains skewed toward lower fee strategies, which continue to weigh on organic base fee growth,” Goldman Sachs said in a note to clients.

Citigroup described the results as “a bit of a mixed quarter,” given BlackRock’s profit beat but lower-than-expected inflows.

Revenue fell 1.4% to $4.4 billion from a year earlier, driven by the impact of market movements over the past 12 months on average assets, BlackRock said.

In June, during its investors day, BlackRock said it saw 5% organic growth in base fee revenues between 2023 and 2027, and gains in market share.

Larry Fink, BlackRock’s chairman and chief executive officer, said in an interview with CNBC that he expects the economic environment to remain challenging. “Inflation will be stickier than market is assuming,” he said, adding it will bounce around 2% and 4%.

Still, BlackRock sees opportunities for growth. Fink said existing clients were bringing more business to BlackRock, which should boost growth. “Clients are consolidating their portfolios with fewer agile asset managers,” he said.

The firm also bets clients will increase allocation to fixed income assets, following the Federal Reserve’s interest rate hikes.

On the expense side, Chief Financial Officer Martin Small told analysts that it was likely to end 2023 with mid to high single digit growth, as the company continues to invest in its business. The headcount should remain broadly flat.

The company last month laid off employees, impacting less than 1% of its total workforce due to budget reallocations to support critical priorities. It had cut 500 jobs earlier in the year as well.

Shares in BlackRock are up 2.85% this year, underperforming the S&P 500 index, which is up almost 18%.

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