(Adds comments from CEO Laurence Fink, details on earnings)
NEW YORK, April 17 (Reuters) - BlackRock Inc, the world's largest money manager, said on Thursday its first-quarter profit rose 20 percent, boosted by strong performance fees and strength in its retail business as investors poured money into long-term funds.
The New York-based asset manager, which now manages $4.4 trillion in assets, including new money and market gains, said it had positive flows across asset classes during quarter.
"Even with all of the turmoil in the markets that we saw a few weeks ago, every day during that turmoil, we had net inflows," Chief Executive Officer Laurence Fink said in an interview on Thursday, noting that most of that tumult was due to "fast money" exits, with hedge funds moving out of their positions, rather than any broad-based selling. "We didn't see any truly long-term investor behavior changes. They were consistently in the market."
BlackRock reported net income of $756 million, or $4.40 per share, up from $632 million, or $3.62 per share, a year earlier.
Excluding certain long-term compensation expenses and other one-time items, earnings were $4.43 a share. On that basis, they beat analysts' average forecast of $4.11 a share, according to Thomson Reuters I/B/E/S.
Of the $26.7 billion that investors poured into long-term funds during the quarter, roughly half came from retail investors, who accounted for $14 billion of long-term net inflows during the quarter. Retail fund assets at the end of March totaled $508.7 billion, representing 12 percent of total assets under management at the end of March.
Investors added more money than they withdrew across asset classes during the quarter, with fixed-income driving the bulk of the long-term net inflows during the quarter.
"As money moves into defined contribution and as pension plans de-risk, we've seen a big movement into fixed-income in the first quarter," Fink said, noting that much of the investor interest there has shifted toward "unconstrained" fixed-income products that are not targeted to any duration.
Investors poured $15.6 billion into BlackRock's fixed-income funds and $3.8 billion into equity funds. They added $5 billion to multi-asset portfolios, while adding $2.3 billion to alternative funds.
Active equity and fixed-income were a weaker spot for the company during the quarter, with institutional investors pulling $8 billion out of active equity and $7 billion out of active fixed-income. BlackRock has been working on strengthening its U.S. active equity business, but said "it will take time to build long-term track records."
BlackRock ended the quarter with total assets under management of $4.4 trillion, including new money and market gains. The company and its peers in the asset management industry make money by charging fees as a percentage of assets under management.
Revenue at BlackRock grew 9 percent to $2.67 billion. Revenue generated by fees based on a portfolio's performance surged 46.3 percent to $158 million from a year earlier.
(Reporting by Ashley Lau in New York; Editing by Franklin Paul and James Dalgleish)