BlackRock (NYSE: BLK) reported a record $15.34 trillion in assets under management for the second quarter of 2026, alongside a 31% surge in revenue to $7.08 billion. However, the results were significantly boosted by the inclusion of HPS Investment Partners, and analysts warn that the tailwind from that acquisition will fade starting in the third quarter.
The firm's adjusted net income climbed 22% to $2.29 billion, while adjusted earnings per share rose 15% to $13.91, topping the consensus estimate of $12.59. The diluted share count increased 5% year-over-year to 164.6 million, largely due to HPS-related subsidiary units. Without the HPS contribution, the underlying organic growth picture would have been less dramatic.
Revenue from investment advisory, administration, and securities lending jumped $1.27 billion year-over-year, with HPS accounting for roughly $230 million of that increase—about 18%. Once HPS is included in both the current and prior-year periods from the third quarter onward, the deal will no longer provide an incremental boost. BlackRock's 8% organic base-fee growth will then become the primary driver of earnings momentum.
The fee mix highlights the strategic importance of the HPS deal. Private markets represent just 2% of BlackRock's total AUM but generate 11% of its base-fee and securities-lending revenue—a fee intensity 5.5 times the company average. All alternatives, including private credit, account for 3% of AUM but 15% of fees. This high-margin business sits alongside BlackRock's massive low-cost ETF engine, which pulled in $177.9 billion in long-term net inflows, or 89% of the total $199.1 billion. Private markets contributed $15.4 billion in inflows, while institutional index products saw $41.5 billion in outflows.
CEO Laurence Fink highlighted that iShares reached $6 trillion in AUM, roughly double its level three years ago. He described market fundamentals as "strong and well supported." The combination of inflows, market gains, and a shift toward higher-fee products pushed BlackRock's adjusted operating margin to 45.9%, its best level in nearly five years.
Despite the record AUM, the bulk of the increase came from market appreciation rather than new client money. Since March, total assets climbed $1.45 trillion, with $1.284 trillion—roughly 88.5%—driven by market gains. Net inflows amounted to $191.7 billion, while currency movements and investment realizations reduced the figure. This heavy reliance on market performance leaves BlackRock vulnerable to any downturn.
Private credit remains a potential concern. Investors requested to redeem 13.3% of shares in the HPS Corporate Lending Fund during the quarter, but the fund adhered to its 5% quarterly redemption cap. Nonetheless, private credit strategies still attracted $6 billion in net new money. BlackRock now expects to repurchase $2 billion of its own shares in 2026, which at current prices would cover about 1.8 million shares, or roughly 22% of the year-over-year increase in diluted shares. This does not include employee stock awards or potential future HPS-related units that could total up to 4.4 million if performance targets are met.
The company also announced it is raising planned quarterly buybacks to $550 million. With the HPS boost set to fade, the upcoming September quarter will be a critical test of whether 8% organic base-fee growth and a heavier tilt toward private markets can sustain per-share earnings growth.
