BlackRock Chief Financial Officer Gary Shedlin said Tuesday that the world’s largest investment manager is freezing most hiring and reducing spending.
“We’re trying to be a little more prudent,” Shedlin explained during a financial conference hosted by Goldman Sachs.
He said these measures would help put the global investment management company in a better position next year.
BlackRock also said there were some short-term performance challenges and that it needed to think about resetting expenses in relation to revenues.
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Shedlin pointed out the firm has seen some weakness in retail mutual funds — but BlackRock expects to see a sizable ramp-up in performance fees from illiquid businesses in the future.
On its Oct. 13 third-quarter earnings call, he first announced the changes amid “very challenged” market conditions.
He said that the company had begun to “more aggressively manage the pace of certain discretionary spend.”
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BlackRock previously reported third quarter revenue fell 15% to $4.3 billion, primarily driven by the impact of significantly lower markets and dollar appreciation on average assets under management and lower performance fees.
Average assets under management totaled $8.479 trillion at September 30, down from $8.478 trillion at end June.
Earnings per share also fell 15%, reflecting a lower effective tax rate and a lower diluted share count, partially offset by lower non-operating income, in the current quarter.
Reuters contributed to this report.
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