Asset manager BlackRock (BLK: 187.49 -0.20%) reported $423m of net income in Q110, up $339m compared to the year-ago quarter as revenue soared 102% to $1.995bn.

“Following last year’s sharp rally in global equity markets and significant tightening of credit spreads, institutional investors stepped back to reassess their asset allocation strategies," said chairman and CEO Laurence Fink, in a statement. "As a result, institutional ‘re-risking’ activity slowed down and reallocations focused primarily on shifting from active to passive and from money market funds to deposits."

Assets under management grew $17.6bn to $3.36trn as of March 31. Blackrock said investors redeemed $22.3bn out of actively managed equity and fixed-income portfolios, and put another $18.2bn of new in index equity and fixed-income products, as well as $13bn in multi-asset and alternative investments.

The company reported $20m net gain on distressed credit and mortgage funds — which represent 20-25% of economic investments as of the end of Q110. This is improved from a $12m net loss in the year-ago quarter.

The gain comes after Curtis Arledge, chief investment officer for fixed income at BlackRock, said earlier this month that banks may need to record some losses on distressed mortgages before the company will continue to buy private label mortgage security bonds.

This is amid the push in Congress for financial regulatory reform legislation that would require banks to hold a piece of credit risk in an aim to ensure the soundness of financial products sold and packaged into mortgage-backed securities (MBS) like those in which BlackRock invests. Reform legislation that heads to a Senate vote this week would also force forms of derivatives trading into greater transparency.

BlackRock's Fink added: "In a time of tremendous upheaval, with profound financial reform under consideration, I remain incredibly enthusiastic about BlackRock’s global business model, our exclusive focus on serving clients, and our unique ability to create value for our clients."

BlackRock also reported a $8m net gain on private equity investments (25-30% of investments) in Q110, reversed from a $20m net loss in the year-ago quarter. The company posted a $1m net loss on real estate-related investments (representing less than 10% of economic investments), narrowed from a $93m net loss last year.

Write to Diana Golobay.

Disclosure: the author holds no relevant investments.

A look at stories across HousingWire’s weekend desk…with more coverage to come on bigger issues:

Regulators closed seven banks Friday — all based in the state of Illinois — at a total cost to the Federal Deposit Insurance Corp. (FDIC) Deposit Insurance Fund (DIF) of nearly $974m.

The Office of the Comptroller of the Currency (OCC) closed Rockford-based Amcore Bank. Chicago-based Harris National Association paid the FDIC a 0.01% premium to assume all of the $3.4bn in deposits and agreed to purchase essentially all of the failed bank’s $3.8bn in assets. The 58 locations of Amcore Bank reopened as locations of Harris National Association and the estimated cost to the DIF is $220.3m.

The Illinois Department of Financial and Professional Regulation — Division of Banking closed the remaining six failed banks, including Chicago-based Broadway Bank. Chicago-based MB Financial Bank did not pay a premium to assume all of the $1.1bn in deposits and essentially all of the of the failed bank $1.2bn in assets. The four Broadway Bank branches reopened as MB Financial Bank locations. The estimated cost to the DIF is $394.3m.

MB Financial also did not pay a premium to assume all of the $492m in deposits of Chicago-based New Century Bank and will assume essentially all of the failed bank’s $485.6m in assets. The three New Century branches reopened as locations of MB Financial and the estimated cost to the DIF is $125.3m.

Wheaton-based Wheaton Bank & Trust will pay a 0.4% premium to assume all of the $438.5m in deposits and agreed to purchase all of the Naperville, Ill.-based Wheatland Bank’s $437.2m in assets. The one location of Wheatland Bank reopened as a location of Wheaton Bank & Trust and the estimated cost to the DIF is $133m.

Northbrook-based Northbrook Bank and Trust paid the FDIC a 0.4% premium to assume all of the $171.5m in deposits and agreed to purchase all of Chicago-based Lincoln Park Savings Bank’s $199.9m in total assets. The four branches of Lincoln Park Savings Bank reopened as locations of Northbrook Bank and Trust, and the estimated cost to the DIF is $48.4m.

Itasca-based First Midwest Bank paid the FDIC a 1% premium to assume all of the $127m in deposits and agreed to purchase essentially all of Peotone-based Peotone Bank and Trust’s $130.2m in assets. The two branches of Peotone Bank reopened as First Midwest Bank locations and the estimated cost to the DIF is $31.7m.

Oak Brook-based Republic Bank of Chicago paid the FDIC a 0.00013% premium to assume all of the $74.5m in deposits of Chicago-based Citizens Bank & Trust Company of Chicago. However, the FDIC will retain most of the failed bank’s $77.3m in assets for later disposition. The one branch of Citizens Bank reopened as a location of Republic Bank and the estimated cost to the DIF is $20.9m.

Ahead of a scheduled Tuesday hearing, the Senate Permanent Subcommittee on Investigations released internal e-mails (download here) from Goldman Sachs (GS: 111.77 +2.96%) that detail conversations among executives about profits made during the collapse of the housing market.

“Of course we didn't dodge the mortgage mess,” one message attributed to Goldman CEO Lloyd Blankfein said. “We lost money, then made more than we lost because of shorts.”

“Investment banks such as Goldman Sachs were not simply market-makers, they were self-interested promoters of risky and complicated financial schemes that helped trigger the crisis,” said Sen. Carl Levin (D-MI), the subcommittee chairman. “The 2009 Goldman Sachs annual report stated that the firm ‘did not generate enormous net revenues by betting against residential related products.’ These e-mails show that, in fact, Goldman made a lot of money by betting against the mortgage market.”

Blankfein and other Goldman executives are scheduled to testify at the hearing Tuesday. In an interview with the Los Angeles Times, Goldman expressed concern that the Senate subcommittee "seems to have reached its conclusion even before holding a hearing," Goldman spokesman Lucas Van Praag said. "In its statement, the US Senate subcommittee has cherry-picked just four e-mails from the almost 20-million pages of documents and e-mails provided to it by Goldman Sachs."

The Federal Reserve’s $1.25trn mortgage-backed securities (MBS) purchase program has come to an end, and now the Fed must decide if it wants to divest itself of these holdings, and how it can do so without causing disruption to the fragile economic recovery. According to a report in The Wall Street Journal, the sale of the Fed-held MBS won’t happen soon. Markets will be on watch for any indication of the Fed’s intentions, but it’s possible the Fed won’t signal its intentions on the matter in its statement following a meeting scheduled for Wednesday.

“The sheer size of the portfolio makes these decisions so key. The Federal Reserve Bank of New York estimates Fed purchases of mortgage and Treasury bonds pushed long-term interest rates down about half a percentage point,” the report said. “The mere announcement of sales could have the opposite effect, as investors price in future sales.”

That sentiment was echoed in this week’s "Securitized Products Weekly" commentary from JP Morgan Chase (JPM: 37.21 -0.75%). While most of the Fed’s emergency programs were meant to be very short-term, analyst Matthew Jozoff wrote he doesn’t believe the Fed will be winding down the MBS purchase program by selling MBS anytime soon, but rather will let runoffs reduce their holdings over time.

Jozoff said the continued fragility of the housing market, the difficulty of instituting a sale program, the expectations that paydowns alone will shrink the holdings by about $100bn a year, and that selling opens the door for questions about the gain or loss of the program and its ultimate cost are all reasons the Fed will be reluctant to sell those assets.

“Ultimately, while we believe it's unlikely that the Fed will sell mortgages this year, it's possible that they use the roll market at some point as a ‘baby step’ in monetary policy,” Jozoff wrote.

Write to Austin Kilgore.

The author held no relevant investments.

American Realty Advisors and New Oak Capital are taking on new staff as both investment advisory firms expand their strategies in commercial real estate (CRE).

American Realty, a California-based institutional real estate investment manager, brought on Raymond Kivett as Chief Investment Officer (CIO). Based in Chicago, Kivett will oversee the nationwide solicitation, analysis, underwriting and negotiation of debt and equity real estate acquisitions.

Before joining American Realty, Kivett served as CIO of Prudential Financial subsidiary, Ridge Property Trust. Previously, he worked in acquisitions at Prudential Real Estate Investors as part of a 22-year commercial real estate track record.

"Ray's proven track record will be an important addition to American's ability to seek the best investment opportunities for our client portfolios," said Kirk Helgeson, executive managing director of investments at American Realty.

Also expanding its commercial real estate and investment services is New York-based New Oak Capital with the appointment of Carlos Vigon as a managing director. Vigon work on  NewOak's principal CRE investments, asset management, private equity and advisory services.

"We are pleased to have Carlos join our commercial real estate debt and equity group that is taking advantage of unprecedented opportunities across property, loan, and CMBS," says Ron D'Vari, CEO, and co-founder of New Oak.

Vigon also has over twenty-two years of commercial real estate experience as an investor, asset manager and trader.

Since 2000, Mr. Vigon was President and Founder of Wilshire Holdings in Manhattan Beach California, a real estate private equity firm focusing on large-scale national value-added acquisitions, private placements and land development.

Previously Vigo launched distressed real estate investment syndications for Realty Consultants Corporation in Palm Desert, California.

Write to Jacob Gaffney.

The author holds no relevant investments.