Q1 2024 BlackRock Inc Earnings Call

Small president Robert S Cookie dough and general counter counsel Christopher J Meade all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad, if you would like.

To withdraw your question. Please press star two thank you Mr. Meade you may begin your conference.

Christopher Joseph Meade: Thank you. Mr. Meade, you may begin your conference. Thank you. Good morning, everyone. I'm Chris Meade, the General Counsel of BlackRock. Before we begin, I'd like to remind you that during the course of this call, we may make a number of disclosures.

Thank you good morning, everyone I'm, Chris Meade, the general counsel of Blackrock.

Christopher Joseph Meade: Before we begin I'd like to remind you that during the course of this call. We may make a number of silvery looking statements.

We call your attention to the fact that Blackrock actual results may of course differ from these statements.

Christopher Joseph Meade: may, of course, differ from these statements. As you know, BlackRock has filed reports with the SEC that list some of the factors that may cause the results of BlackRock to differ materially from what we see today. BlackRock assumes no duty and does not undertake to update any forward-looking statements. So with that, I'll turn it over to Martin.

Christopher Joseph Meade: As you know Blackrock has filed reports with the SEC, which lists some of the factors that May result caused the results of Blackrock to differ materially from what we say today.

Christopher Joseph Meade: Blackrock assumes no duty and does not undertake to update any forward looking statements.

Christopher Joseph Meade: With that I'll turn it over to Martin.

Martin Small: Thanks, Chris, and good morning, everyone. It's my pleasure to present results for the first quarter of 2024. Before I turn it over to Larry, I'll review our financial performance and business results. Our earnings release discloses both GAAP and as-adjusted financial results, but I'll be focusing primarily on our as-adjusted results.

Martin: Thanks, Chris and good morning, everyone.

Martin: It's my pleasure to present results for the first quarter of 2024.

Martin: Before I turn it over to Larry I'll review, our financial performance and business results our earnings release discloses, both GAAP and as adjusted financial results I'll be focusing primarily on our as adjusted results.

Martin Small: BlackRock's first-quarter results reflect sustained momentum across our entire platform. We ended the quarter with a record AUM of nearly $10.5 trillion and one of the strongest opportunity sets ahead across multiple growth areas, including technology, outsourced solutions, and private markets.

Martin: Blackhawk's first quarter results reflect sustained momentum across our entire platform. We ended the quarter with record AUM of nearly 10.5 trillion and one of the strongest opportunity sets ahead across multiple growth engines, including technology outsource solutions and private markets momentum.

Martin Small: Momentum's accelerating, and we have line of sight into a breadth of significant mandates in investment management and technology, spanning client channels and geography. Teams across BlackRock are energized and organized to execute on these opportunities and deliver BlackRock's platform to clients through world-class client service. We've built BlackRock to be a structural grower with industry leadership in secular growth areas like ETFs, private markets, model portfolios, and technology. With supportive markets and more optimistic sentiment from clients, we're confident in our ability to both grow assets on behalf of clients and drive profitable growth for our shareholders. First quarter long-term net inflows of $76 billion continue to lead the industry, driving positive organic base fee growth alongside double-digit growth year-over-year in revenue and earnings, as well as 180 basis points of margin expansion. Excluding low-fee institutional index equity flows, we saw 100 billion of long-term net inflows in the quarter. As equity markets powered to record highs in the first quarter, investors who were waiting in cash missed out on significant returns across broader markets. With long-term investing, time in the markets is often more important than market timing.

Speaker Change: <unk> and we have line of sight into a breath of significant mandates in investment management and technology spanning client channels and geographies.

Speaker Change: Teams across Blackrock are energized and organized to execute on these opportunities and deliver Blackrock platform to clients through world class client service.

Speaker Change: We built blackrock to be a structural grower with industry leadership and secular growth areas like each yes.

Speaker Change: Private markets model portfolios, and technology, which supported markets I'm more optimistic sentiment from clients, we're confident in our ability to both grow assets on behalf of clients and drive profitable growth for our shareholders.

Speaker Change: First quarter long term net inflows of 76 billion continued to lead the industry driving positive organic base fee growth alongside double digit growth year over year in revenue and earnings as well as 180 basis points of margin expansion.

Speaker Change: Excluding low fee institutional index equity flows we saw 100 billion of long term net inflows in the quarter.

Speaker Change: As equity markets power to record highs in the first quarter investors were waiting in cash missed out on significant returns across broader markets with long term investing time in the markets is often more important than market timing, although cash remains an attractive safe haven with the prospect of fewer rate cuts for 2020 for the nearly 30% increase in.

Martin Small: Although cash remains an attractive safe haven with the prospect of fewer rate cuts for 2024, the nearly 30% increase in equities over the last year continues to propel clients towards re-risking into stocks and bonds. Clients choose BlackRock for performance. They continue to consolidate more of their portfolios with us, which is driving our growth premium. With more clarity on interest rates in a supportive market backdrop, the assets we manage on behalf of our clients, our units of trust, ended the quarter up $1.4 trillion from a year ago, an increase of 15%. Organic asset and base fee growth again accelerated into the end of the quarter, and we see broad-based momentum growing across client channels and regions. In the first quarter, BlackRock generated long-term net inflows of $76 billion, partially offset by seasonal outflows from institutional money market funds.

Speaker Change: Equities over the last year continues to propel clients towards re risking into stocks and bonds.

Speaker Change: Clients choose Blackrock for performance they continue to consolidate more of their portfolios with us which is driving our growth premium with more clarity on interest rates and a supportive market backdrop. The assets. We manage on behalf of our clients are units of trust ended the quarter up one four trillion from a year ago an increase.

Speaker Change: 15% organic asset and base fee growth again accelerated into the end of the quarter and we see broad based momentum growing across client channels and regions.

In the first quarter Blackrock generated long term net inflows of 76 billion, partially offset by seasonal outflows from institutional money market funds total annualized organic base fee growth of 1% reflected seasonally softer flows earlier in the quarter before coming back to target in March.

Martin Small: Total annualized organic base feed growth of 1% reflected seasonalally softer flows earlier in the quarter before coming back to target in March. First quarter revenue of $4.7 billion increased 11% year-over-year, driven by the impact of market appreciation over the last 12 months on average AUM and higher performance fees and technology services revenue. Operating income of $1.8 billion was up 17%, and earnings per share of $9.81 was 24% higher versus a year ago, also reflecting higher non-operating income. Non-operating results for the quarter included $90 million of net investment gains, driven primarily by mark-to-market non-cash gains on our unhedged seed capital investments and minority investment in InvestNet. Our as-adjusted tax rate for the first quarter was approximately 23% and included discrete tax benefits related to stock-based compensation awards that vest in the first quarter of each year. We continue to estimate that 25% is a reasonable projected tax run rate for the remainder of 2024.

Speaker Change: First quarter revenue of $4 7 billion increased 11% year over year, driven by the impact of market appreciation over the last 12 months on average AUM and higher performance fees in technology services revenue.

Speaker Change: Operating income of $1 8 billion was up 17% and earnings per share of $9.81 was 24% higher versus a year ago also reflecting higher non operating income.

Non operating results for the quarter included $90 million of net investment gains driven primarily by mark to market noncash gains on our unhedged seed capital investments and minority investment and invest that.

Speaker Change: Our as adjusted tax rate for the first quarter was approximately 23% and included discrete tax benefits related to stock based compensation awards that vest in the first quarter of each year.

Speaker Change: We continue to estimate that 25% is a reasonable projected tax run rate for the remainder of 2024, though the actual effective tax rate may differ because of nonrecurring or discrete items or potential changes in tax legislation.

Martin Small: Though the actual effective tax rate may differ because of non-recurring or discrete items or potential changes in tax legislation. First quarter base fee and securities lending revenue of $3.8 billion was up 8% year over year and up 5% sequentially, driven by the positive impact of market beta on average AUM and positive organic base fee growth. On an equivalent day count basis, our annualized effective fee rate was three-tenths of a basis point lower compared to the fourth quarter. This was mainly due to the relative outperformance of lower-fee U.S. equity markets, client preferences for lower-fee U.S. exposures, and lower securities lending revenue. Performance fees of $204 million increased from a year ago, primarily reflecting higher revenue from alternatives. Quarterly technology services revenue was up 11% compared to a year ago, reflecting sustained demand for our Latin technology.

Speaker Change: First quarter base fee in securities lending revenue of $3 8 billion was up 8% year over year and up 5% sequentially driven by the positive impact of market beta on average AUM and positive organic base fee growth.

Speaker Change: On an equivalent day count basis, our annualized effective fee rate was three tenths of a basis point lower compared to the fourth quarter. This was mainly due to the relative outperformance of lower fee U S equity markets client preferences for lower fee U S exposures and lower securities lending revenue.

Speaker Change: Performance fees of $204 million increase from a year ago, primarily reflecting higher revenue from alternatives.

Speaker Change: Technology services revenue was up 11% compared to a year ago, reflecting sustained demand for our Aladdin technology offerings annual contract value or ACD increased 9% year over year.

Martin Small: Annual contract value, or ACV, increased 9% year over year. Beginning in the first quarter of 2024, earnings recognized from minority investments accounted for under the equity method will be presented as part of our non-operating results. Advisory and other revenue increased from a year ago, primarily reflecting this change. In addition, as many of you know, we updated the presentation of expense line items by including a new sales asset and account income statement caption.

Speaker Change: Beginning in the first quarter of 2024 earnings recognized from minority investments accounted for under equity method will be presented as part of our non operating results advisory and other revenue increased from a year ago, primarily reflecting this change.

Speaker Change: In addition, as many of you know we updated the presentation of expense line items by including a new sales asset and account income statement caption.

Martin Small: This category includes distribution and servicing costs, direct fund expense, and sub-advisory and other sales, asset, and account-based expense. Sub-advisory and other expense, which are variable, non-compensation expenses associated with asset and revenue growth, was previously reported within general and administration expense. We believe this change provides investors a clearer view of both BlackRock's variable non-compensation expense and G&A, which represents more fixed costs. It represents how we'll execute on our financial rubric of aligning investment spend with our highest conviction growth areas, volatilityizing more of our expense base, and generating fixed cost scale. Total expense increased 8% year-over-year, reflecting higher compensation, G&A, and sales asset and account expense. Employee compensation and benefit expense was up 11%, primarily reflecting higher incentive compensation as a result of higher operating income and performance.

Speaker Change: This category includes distribution and servicing costs direct fund expense and sub advisory and other sales asset and account based expense.

Speaker Change: Sub advisory and other expense, which are variable non compensation expenses associated with asset and revenue growth was previously reported within general and administration expense we.

Speaker Change: We believe this change provides investors a clearer view of both Blackrock variable non compensation expense and G&A, which represents more fixed costs. It represents how we will execute on our financial rubric of aligning investment spend with our highest conviction growth areas variable as more of our expense base and generating fixed cost scale.

Speaker Change: Total expense increased 8% year over year, reflecting higher compensation, G&A and sales asset and account expense employee compensation and benefit expense was up 11%, primarily reflecting higher incentive compensation as a result of higher operating income and performance fees G&A.

Martin Small: G&A expense increased 6% due to the timing of technology investment spend in the prior year. However, sequentially, G&A expense decreased 12%, reflecting the timing of technology investment spend and seasonally higher marketing and promotional expense in the fourth quarter. While one quarter's results can be impacted by timing of spend, we expect technology to be one of our primary areas of investment within G&A. Sales asset and account expense increased 5% compared to a year ago, primarily driven by higher direct fund expenses. Direct fund expense was up 7% year-over-year, mainly due to higher average index AUM. Sequentially, direct fund expense increased due to higher average index AUM in the current quarter and higher rebates that seasonally occur in the fourth quarter.

Speaker Change: G&A expense increased 6% due to the timing of technology investment spend in the prior year.

Sequentially G&A expense decreased 12%, reflecting timing of technology investment spend and seasonally higher marketing and promotional expense in the fourth quarter.

Well one quarter's results can be impacted by timing of spend we expect technology to be one of our primary areas of investment within G&A.

Speaker Change: Sales asset and account expense increased 5% compared to a year ago, primarily driven by higher direct fund expense.

Speaker Change: <unk> fund expense was up 7% year over year, mainly due to higher average index AUM sequentially direct fund expense increased due to higher average index AUM in the current quarter and higher rebates that seasonally occur in the fourth quarter.

Martin Small: Our first quarter adjusted operating margin of 42.2% was up 180 basis points from a year ago. As markets improve, we remain committed to driving operating leverage and profitable growth. BlackRock's industry-leading organic growth is a direct result of the disciplined investments we've made consistently through market cycles. Looking forward, we'll continue to prioritize investments with differentiated organic growth potential or that will expand operating leverage through enhanced scale. In line with our guidance in January and excluding the impact of global infrastructure partners and related transaction costs, at present, we would expect our headcount to be broadly flat in 2024, and we would also expect a low to mid-single-digit percentage increase in 2024 core G&A expense. Our capital management strategy remains consistent.

Speaker Change: Our first quarter as adjusted operating margin of 42, 2% was up 180 basis points from a year ago as markets improve we remain committed to driving operating leverage and profitable growth.

Speaker Change: <unk> industry, leading organic growth is a direct result of the disciplined investments we've made consistently through market cycles. Looking forward, we'll continue to prioritize investments with differentiated organic growth potential or that will expand operating leverage through enhanced scale.

In line with our guidance in January and excluding the impact of global infrastructure partners and related transaction costs at present, we would expect our head count to be broadly flat in 2024, and we would also expect a low to mid single digit percentage increase in 2024 core G&A expense.

Speaker Change: Our capital management strategy remains consistent we invest first either the scale strategic growth initiatives to drive operational efficiency, and then return excess cash to our shareholders through a combination of dividends and share repurchases at times, we may make inorganic investments, where we see an opportunity to accelerate organic growth.

Martin Small: We invest first, either to scale strategic growth initiatives or drive operational efficiency, and then return excess cash to our shareholders through a combination of dividends and share repurchases. At times, we may make inorganic investments where we see an opportunity to accelerate organic growth and support our strategic initiatives. Last month, we announced our agreement to acquire the remaining equity interest in SpiderRock Advisors, a leading provider of customized option overlay strategies in the U.S. wealth market. This transaction expands on BlackRock's minority investment in SpiderRock Advisors made in 2021 and builds on BlackRock's strong growth in personalized separately managed accounts via Appirio and ETF model portfolio. At present, we expect the transaction to close in the second quarter of this year, subject to customary closing conditions.

Speaker Change: And support our strategic initiatives.

Speaker Change: Last month, we announced our agreement to acquire the remaining equity interest in spite of rock advisors, a leading provider of customized option overlay strategies in the U S wealth market. This transaction expands on Blackrock minority investment in spite Iraq advisors made in 2021 and builds on Blackrock strong growth and personalized separately managed accounts via <unk> and <unk>.

Speaker Change: T F model portfolios at present, we expect the transaction to close in the second quarter of this year subject to customary closing conditions.

Speaker Change: In March we issued $3 billion of debt to fund a portion of the cash consideration for our planned acquisition of <unk> are.

Speaker Change: Our offering consisted of three tranches of senior unsecured notes across 510, and 30 year maturities. The offering was well received by fixed income investors, especially our inaugural 30 year bond.

Speaker Change: We currently have invested the proceeds of the offering at substantially the same rate as the cost of borrowing effectively eliminating incremental cost of carrying additional debt prior to the close of the <unk> transaction.

Martin Small: In March, we issued $3 billion of debt to fund a portion of the cash consideration for our planned acquisition of GIP. Our offering consisted of three tranches of senior unsecured notes across 5-, 10-, and 30-year maturities. The offering was well received by fixed income investors, especially our inaugural 30 year bond. We currently have invested the proceeds of the offering at substantially the same rate as the cost of borrowing, effectively eliminating the incremental cost of carrying additional debt prior to the close of the GIP transaction. We continue to target the third quarter of 2024 for the

Speaker Change: We continue to target the third quarter of 2024 for the closing of the GIC transaction, which remains subject to regulatory approvals and other customary closing conditions.

Speaker Change: We repurchased $375 million worth of common shares in the first quarter at present based on our capital spending plans for the year and subject to market conditions, we still anticipate repurchasing at least $375 million of shares per quarter for the balance of the year consistent with our January guidance.

Speaker Change: More positive sentiment from clients and in markets persisted into the first quarter clients increasingly turn to Blackrock to reposition and redeploy across their portfolios first quarter long term net inflows of $76 billion were positive across active and index strategies as well as each of our client and product types.

Martin Small: The transaction, which remains subject to regulatory approvals and other customary closing conditions. We repurchased $375 million.

Martin Small: Transcribed by https://otter.ai More positive sentiment from clients and in the markets persisted into the first quarter, and clients increasingly turned to BlackRock to reposition and redeploy assets across their portfolios. First quarter long-term net inflows of $76 billion were positive across active and index strategies, as well as each of our client and product types. ETF net inflows of $67 billion were led by core equity and fixed income ETFs, with net inflows of $37 billion and $18 billion, respectively. These inflows were partially offset by seasonal tax trading related outflows from our U.S. style box exposure in Precision ETS.

Speaker Change: Net inflows of 67 billion were led by core equity and fixed income Etfs with net inflows of 37 billion, an $18 billion respectively. These inflows were partially offset by seasonal tax trading related outflows from our U S style box exposure and precision Etfs.

Speaker Change: You will hear from Larry our bitcoin ETP sauce surging demand after launching in January gathering $14 billion of net inflows in the quarter. This is just the latest example of Blackrock innovating to provide better access and transparency to a wider range of investment exposures.

Speaker Change: Retail net inflows of $7 billion were led by continued growth in imperial as well as renewed demand for active fixed income financial advisors are increasingly looking to customize whole portfolios at scale driving growth across our SMA and managed model platforms, our partnership with investment as one channel powering flows through model.

Martin Small: As you'll hear from Larry, our Bitcoin ETC saw surging demand after launching in January, gathering $14 billion of net inflows in the quarter. This is just the latest example of BlackRock innovating to provide better access and transparency to a wider range of investment exposure. Retail net inflows of $7 billion were led by continued growth in Appirio, as well as renewed demand for active fixed income. Financial advisors are increasingly looking to customize whole portfolios at scale, driving growth across our SMA and managed model platforms. Our partnership with InvestNet is one channel powering flows through model portfolios. We saw our best gross sales month ever on the platform, and year-to-date organic asset and revenue growth has more than doubled compared to this time last year. Sales on the platform aren't just accelerating; they're diversifying. We similarly saw record gross flows in custom models and record AUM in our global allocation models, both of which have larger active components. Within SMAs, our previously mentioned acquisition of SpiderRock Advisors will further enhance our product offerings and provide even greater personalization across our wealth segment.

Speaker Change: We saw our best gross sales months ever on the platform and year to date organic asset and revenue growth has more than doubled compared to this time last year sales on the platform arent just accelerating their diversifying we similarly saw record gross flows and custom models and record AUM in our global allocation models, both of which have larger.

Speaker Change: Active components within SMA as our previously mentioned acquisition of Spider Advisors will further enhance our product offerings and provide even greater personalization across our wealth segments.

Institutional active net inflows of $15 billion were driven by our light path target date franchise and outsourcing mandates, we see significant momentum across our whole portfolio capabilities. Our pipeline remains strong as more and more clients turn to Blackrock for outsourcing solutions institutional index net outflows of $13 billion.

We're concentrated in low fee index equities as several large clients rebalanced their portfolios amid significant equity market appreciation in the last six months or.

Speaker Change: Our private markets franchise saw $1 billion of net inflows continued demand for our liquid offerings was offset by alpha generation for our clients reflected in over $3 billion of fund monetization and LP distributions or change in fee basis, primarily for more seasoned private equity solutions programs.

Martin Small: Institutional active net inflows of $15 billion were driven by our Lifepath target date franchise and outsourcing mandates. We see significant momentum across our whole portfolio capabilities. Our pipeline remains strong as more and more clients turn to BlackRock for outsourcing solutions. Institutional index net outflows of $13 billion were concentrated in low-fee index equities, as several large clients rebalanced their portfolios amid significant equity market appreciation in the last six months.

Speaker Change: Finally, Blackrock cash management platform saw $19 billion of net outflows in the first quarter in line with institutional money market industry trends, our cash business can experience seasonal rotations in the first quarter as many institutional clients withdraw these liquid assets for operational purposes, including tax and bonus payments.

Speaker Change: Cash management flows were impacted by approximately 14 billion of net redemptions. During the last week of March ahead of the good Friday holiday.

Speaker Change: Flows were driven by clients' redeeming balances to have cash on hand during a time when many businesses are open but the financial markets are closed. This phenomenon is not uncommon or unique to Blackrock balances largely returned with approximately $20 billion of money market net inflows in the first week of April.

Martin Small: Our private markets franchise saw a billion in net inflows; continued demand for our liquid offerings was offset by alpha generation for our clients, reflected in over three billion in fund monetization and LP distributions or change in fee basis, primarily for more seasoned private equity solutions programs. Finally, BlackRock's cash management platform saw $19 billion of net outflows in the first quarter, in line with institutional money market industry trends. Our cash business can experience seasonal rotations in the first quarter, as many institutional clients withdraw these liquid assets for operational purposes, including tax and bonuses. Cash management flows were impacted by approximately $14 billion of net redemptions during the last week of March ahead of the Good Friday holiday.

Speaker Change: Blackrock differentiated business model has enabled us to continue to grow with our clients driving industry, leading organic growth and margins looking ahead as markets trend to be more supportive and clients, we risk, we see significant opportunity to expand our market share and consolidate our position with clients, we've set ourselves up to be a structural grower with the.

Speaker Change: Diversified platform that we built enthusiasms growing momentum building across the platform all of US at Blackrock are excited about our future and the growing opportunities for Blackrock for our clients for our employees and of course for our shareholders with that I'll turn it over to Larry.

Larry: Thank you Martin good morning, everyone and thank you for joining the call.

Martin Small: Outflows were driven by clients redeeming balances to have cash on hand during a time when many businesses are open, but the financial markets are closed. This phenomenon is not uncommon or unique to BlackRock. However, balance is largely returned with approximately $20 billion of money market net inflows in the first week of April.

Larry: Blackrock, just partnering with clients to navigate structural and secular changes in business models technology monetary and fiscal policies always staying focused on each and every client goal.

Larry: Through this connectivity.

Larry: We're having richard conversations with clients than ever before about their whole portfolio.

Martin Small: BlackRock's differentiated business model has enabled us to continue to grow with our clients, driving industry-leading organic growth and margin. Looking ahead, as markets trend to be more supportive and clients re-risk, we see a significant opportunity to expand our market share and consolidate our position with clients. We've set ourselves up to be a structural grower with the diversified platform that we've built. And enthusiasm is growing. Momentum is building across the platform. All of us at BlackRock are excited about our future and the growing opportunities for BlackRock, for our clients, for our employees, and, of course, for our shareholders. With that, I'll turn it over to Larry. Thank you.

Larry: And then many cases deepening our relationships with them. This is driving accelerating momentum with a strong pipeline that has some of the best breadth of opportunities across all our client channels and regions that we've ever seen.

Larry: Blackrock integrated investment technology advisory platform and durable performance are resonating.

Larry: In my conversations with clients around the world I'm hearing about how they want to put their money to work.

Larry: But they want to do it differently than they did in the past.

Larry: It was a portfolio that would be more holistically blending public and private markets active and index.

Larry: They want their portfolios to be nimble customized tech enabled.

Larry: I want to work with fewer providers or maybe just with one provider black.

Laurence Douglas Fink: Thank you, Martin. Good morning, everyone, and thank you for joining the call. BlackRock is partnering with clients to navigate structural and secular changes in business models, technology, monetary, and fiscal policies, always staying focused on each and every client goal. Through this connectivity, we are having richer conversations with clients than ever before about their whole portfolios, and in many cases, deepening our relationships with them.

Larry: Blackrock is the only asset manager that can partner in this way, having the most diverse integrated investment and technology platform in the industry.

Larry: Clients around the world are choosing to do more with Blackrock and this is resonating in our results.

It actually more excited about the building momentum, we're seeing across our entire platform.

Larry: Blackrock AUM ended the first quarter at a new record of nearly 10 five trillion dollars.

Larry: Up one four trillion or 15% over the last 12 months.

Laurence Douglas Fink: This is driving accelerating momentum with a strong pipeline that has some of the best breadth of opportunities across all our client channels and regions that we've ever seen. BlackRock's integrated investment technology advisory platform and durable performance are responding. In my conversations with clients around the world, I hear about how they want to put their money to work, but they want to do it differently than they did in the past. They want their portfolios to be more holistically blending public and private markets active in an index. They want their portfolios to be nimble, customized, and text-enabled. They want to work with fewer providers or maybe just with one provider.

Larry: Also at that time, Blackrock has entrusted blackrock with more than $236 billion of net new assets.

Larry: Blackrock generated positive net flows across active and index and across all client types.

Larry: We grew our technology service revenues at ACB as clients leveraged Aladdin the support investments.

Larry: Processes and at their entire platform.

We've had a number of real large marquee wins in Aladdin and are working on a number of significant new opportunities.

Larry: Momentum remains strong as we grow with new and existing clients.

Larry: We continue to deliver sustained asset and technology services growth at scale.

Laurence Douglas Fink: BlackRock is the only asset manager that can partner in this way, having the most diverse, integrated investment and technology platform in the industry. Clients around the world are choosing to do more with BlackRock, and this is reflected in our results. I'm actually more excited about the building momentum we're seeing across our entire platform. BlackRock's AUM ended the first quarter at a new record of nearly $10.5 trillion, up 1.4 trillion, or 15%, over the last 12 months.

Larry: Blackrock saw operating income was up 17% year over year, and we increased our margins by 180 basis points.

Larry: Our earnings per share were up 24%.

Activity is no notably accelerating.

Larry: As Martin said, we generated 76 billion of long term net flows in the first quarter, which represents nearly 40% of last year's long term flows in just the first three months of this year.

Larry: And long term net inflows across retail in Etfs and institutional active was actually a 100 billion, which excludes the episodic institutional equity activity Martin mentioned.

Laurence Douglas Fink: Also, at that time, BlackRock was entrusted with more than $236 billion of net new assets. BlackRock generated positive net flows across active and index and across all client types. And we grew our technology, service revenues, and ACV as clients leveraged Aladdin to support investments, processes, and their entire platform. We've had a number of really big marquee wins in Aladdin and are working on a number of significant new opportunities. Momentum remains strong as we grow with new and existing clients. We continue to deliver sustained asset and technology services growth at scale. BlackRock's operating income was up 17% year over year, and we increased our margins by 180 basis points. Earnings per share were up 24%.

Larry: Some of these are public some art, but over the last few months, we have been chosen for a breath of mandates from both wealth and institutional clients across regions that will fund over future quarters and we're in active conversations in a number of unique broad based opportunities including <unk>.

Larry: Several large mandates for Aladdin.

Larry: There is still a record amount of cash on the sidelines in money market fund balances are now approaching nine trillion.

Larry: I think this stems from fear and uncertainty.

Larry: But it is hard to achieve retirement are long dated objectives by holding cash.

Larry: Clients worldwide are coming to Blackrock for advice on where and how to deploy their capital.

Larry: In many ways, how to help them reduce that fear and putting that money to work.

Being a growth company requires continued innovation lots.

Laurence Douglas Fink: Activity is notably accelerated. As Martin said, we generated $76 billion of long-term net flows in the first quarter, which represents nearly 40% of last year's long-term flows in just the first three months of this year. And long-term net inflows across retail and ETFs and institutional active were actually $100 billion, which excludes the episodic institutional equity activity Martin mentioned.

Larry: Lots of investments and intense client focus.

Larry: Blackrock has invested ahead of these themes, we believe will define the next decade of asset management.

Larry: I see the greatest opportunities I've ever seen for Blackrock for our clients and for our shareholders and I'm very optimistic about the momentum into the rest of 2024 and beyond.

Larry: The uncertain backdrop does not mean, a lack of opportunities instead, we see great opportunities for investors across a number of structural trends with near term catalysts. These include rapid advancements in technology and AI.

Laurence Douglas Fink: Some of these are public, some aren't, but over the last few months, we've been chosen for a breadth of mandates from both wealth and institutional clients across regions that will fund in future quarters, and we're in active conversations on a number of unique, Broad-based opportunities, including several large mandates for Atlantis. There's still a record amount of cash on the sidelines, and money market fund balances are now I think this stems from fear and uncertainty. But it's hard to achieve retirement or long-term objectives by holding cash. Clients worldwide are coming to BlackRock for advice on where and how to deploy their capital and, in many ways, how to help them reduce that fear by putting that money to work. Being a growth company requires continued innovation, lots of investment, and intense client focus.

Larry: Rewiring our globalization.

Larry: Accelerated economic growth in certain emerging market.

Larry: And an unprecedented need for new infrastructure.

Larry: Blackrock is connecting with clients to these opportunities and providing them the confidence to continue investing in the long run.

Larry: In a world where clients are looking for more certainty.

Larry: The higher coupon longer duration returns of infrastructure private markets are increasingly becoming more attractive.

Larry: Demand for all forms of infrastructure is surging around the world from telecom networks to power generation to transport hubs for data centers and new ways of security and energy.

Larry: Over the last 12 months Blackrock infrastructure platform has delivered 19% organic asset growth Blackrock infrastructure franchise at our private markets business more broadly benefited for the firm's global footprint, our deep network of clients and distribution relationships and access to high quality deal flow deal flow.

Laurence Douglas Fink: BlackRock has invested ahead of these themes, which we believe will define the next decade of asset management. I see the greatest opportunities I've ever seen for BlackRock, for our clients, and for our shareholders. And I'm very optimistic about the momentum into the rest of 2024 and beyond. The uncertain backdrop does not mean a lack of opportunities. Instead, we see great opportunities for investors across a number of structural trends with near-term catalysts. These include rapid advancements in technology and AI. The Rewiring of Globalization

Larry: As we spoke in January we believe the planned combination of black box infrastructure platform with <unk> will provide clients with access to market, leading investment and operating expertise across infrastructure private markets.

Larry: We have a deep conviction that this planned combination will be another transformational moment for Blackrock.

Larry: It will be another example in our long term history of staying ahead of client needs positioning ourselves against accelerated macro trends I believe is structured private markets are approaching the upwards trajectory of their J curve, just as Etfs did when we announced our acquisition of BG Ishares nearly 15 years.

Laurence Douglas Fink: Accelerated economic growth in certain emerging markets and an unprecedented need for new infrastructure. BlackRock is connecting with clients to these opportunities and providing them with the confidence to continue investing in the long run. In a world where clients are looking for more certainty, the higher coupon, longer-duration returns of infrastructure private markets are increasingly becoming more attractive. Demand for all forms of infrastructure is surging around the world, from telecom networks to power generation to transport hubs, for Data Centers and New Ways of Securing Energy.

Larry: Go.

Larry: We always viewed Etfs as a technology that facilitated investing since our acquisition of Ishares Blackrock has led in expanding the market of Etfs by making them more accessible.

Larry: By delivering new asset classes like bonds investment.

Larry: <unk> strategies like actives.

Laurence Douglas Fink: Over the last 12 months, BlackRock's infrastructure platform has delivered 19% organic asset growth. BlackRock's infrastructure franchise and our private markets business have more broadly benefited from the firm's global footprint, our deep network of clients and distribution relationships, and access to high quality deal flow. As we spoke in January, we believe the planned combination of BlackRock's infrastructure platform with GIP will provide clients with access to market-leading investments and operating expertise across infrastructure private markets. We have a deep conviction that this planned combination will be another transformational moment for BlackRock. It will be another example of our long-term history of staying ahead of client needs, positioning ourselves against accelerated macro trends. I believe infrastructure private markets are approaching the upward trajectory of their J-curve, just as ETS did when we announced our acquisition of BGI and iShares nearly 15 years ago.

Larry: As a result of that success, the Etfs evolve beyond what started as the indexing.

Larry: Concept. It is recognized as an efficient structure for a range of all investment solutions.

Larry: First quarter ETF net inflows of $67 billion reflected sustained client demand across our client categories led by core equity and bond Etfs.

Larry: ETF flows demonstrated accelerating activity with March accounting for more than half of the quarterly net inflows.

Larry: And our flows in the <unk>.

<unk> were 80% higher than the next largest issuer.

Larry: We continue to innovate across our ETF platform to give our clients better access to the most diverse range of exposures in the industry.

Larry: Our Bitcoin fund, which was launched in January was the fastest growing ETF in history.

Larry: Already has nearly $20 billion.

Larry: And <unk> are.

Larry: Our active ETF drove $9 billion of net inflows in the first quarter led led by our equity factor rotation and flexible income Etfs.

Larry: These products offer alpha generation with some of our leading investors at Blackrock in a more efficient more transparent ETF wrapper.

Laurence Douglas Fink: We have always viewed ETS as a technology that facilitated investment. Since their acquisition of iShares, BlackRock has led in expanding the market for ETS by making them more accessible, by delivering new asset classes like bonds, and investment strategies like actives. As a result of that success, ETFs evolved beyond what started as an indexing concept. They are recognized as an efficient structure for a range of investment solutions. First quarter ETF net inflows of 67 billion reflected sustained client demand across our client categories, led by core equity and body.

Larry: Across Blackrock, we continue to scale, our product offerings to democratize access to new strategies increased transparency and drive cost efficiency.

Larry: To that end last month, we announced the launch of our first token is fun as well as our minority investment in securitized, a blockchain based <unk> platform.

Laurence Douglas Fink: ETF flows demonstrated accelerating activity, with March accounting for more than half of the quarterly net inflows, and our flows in the month were 80% higher than the next largest issuer. We continue to innovate across our ETF platform to give our clients better access to the most diverse range of exposures in the industry. Our Bitcoin fund, which was launched in January, was the fastest growing ETF in history and already had nearly $20 billion in AUM. Our active ETFs drove $9 billion in net inflows in the first quarter, led by our equity factor rotation and flexible income ETFs.

Larry: This builds on our existing digital asset strategy, and we'll continue to innovate new products and wrappers, all with the aim of providing greater greater axis and customization to each and every of our clients.

Larry: We continue to see demand for customization with our own wealth business as financial advisors and their clients. They serve increasingly turned to SMA to personalize their portfolios.

Larry: We acquired a period three years ago in anticipation of this trend in organic growth in that business has been over 20% since our acquisition to further booster our SMA capabilities, we announced our planned acquisition of the remaining equity interest in Spider rock as Martin discussed.

Laurence Douglas Fink: These products offer alpha generation with some of our leading investors at BlackRock in a more efficient, more transparent ETF wrapper. Across BlackRock, we continue to scale our product offerings to democratize access to new strategies, increase transparency, and drive cost efficiency. To that end, last month we announced the launch of our first tokenized fund, as well as our minority investment in Securitize, a blockchain-based tokenization platform. This builds on our existing digital asset strategy, and we'll continue to innovate in new products and wrappers, all with the aim of providing greater access and customization to each and every one of our clients. We continue to see demand for customization with our own wealth business, as financial advisors and their clients they serve increasingly turn to SMAs to personalize their portfolios.

Larry: Among wealth clients. We are also seeking to renewed demand for our high performing active fixed income strategies with particularly strength in high yield and unconstrained bond funds.

Larry: And the post QE market.

Larry: We see more opportunity to head for active management with greater potential for selective risk taking to generate superior returns.

Larry: Active net inflows of $15 billion reflect strengthened systematic equities and fundamental fixed income, including the funding of several institutional outsourcing mandates.

Larry: Across our active franchise Blackrock has delivered durable investment performance with 80 to 90 at 93% of our fundamental equity systematic equity and taxable fixed income AUM above benchmark or peer medium for the last five years.

Laurence Douglas Fink: We acquired Appirio three years ago in anticipation of this trend, and organic growth in that business has been over 20% since our acquisition. To further boost our SMA capabilities, we announced our planned acquisition of the remaining equity interest of SpiderRock, as Martin discussed. Among wealth clients, we are also seeking to renew demand for a high-performance active fixed income strategy with particularly strengthened high yield and unconstrained bond funds. In the post-QE market, we see more opportunity ahead for active management with greater potential for selective risk-taking to generate superior returns.

Larry: Yeah.

Larry: Our active investment insights our strong investment performance, our integrated Aladdin technology differentiates Blackrock and.

Larry: And ultimately drive better outcomes for our clients.

Larry: We first built Aladdin as a risk management enabler.

Larry: Empowering investors to better understand their portfolio through technology.

Larry: Today.

Larry: A lot of it is much more than that.

Larry: Our clients are leveraging Aladdin as a whole enterprise operating system.

Larry: <unk> multiple asset classes data technology partners at a single platform.

Laurence Douglas Fink: Quarterly active net inflows of $15 billion reflect strength in systematic equities and fundamental fixed income, including the funding of several institutional outsourcing mandates. Across our active franchise, BlackRock has delivered durable investment performance with $82, $90, and $93% of our fundamental equity, systematic equity, and taxable fixing of AUM above benchmarks or peer medium for the last five years. Our active investment insights, our strong investment performance, and our integrated Aladdin technology differentiate BlackRock and ultimately drives better outcomes for our clients. We first built Aladdin as a risk management enabler, empowering investors to better understand their portfolios through technology. Today

Larry: A lot of the integrated offering continues to resonate with a majority of our sales this quarter spanning multiple aladdin products.

Larry: We are in the late stage conversation with several large potential Aladdin clients and we look forward to executing on more opportunities ahead to be bringing the benefits of <unk> to new clients and by expanding relationships with our existing clients.

Larry: From the early days of developing Aladdin to now managing nearly $10 trillion across our platform.

Larry: Our ambition has always been to help investors benefit from the growth of the capital markets and achieve financial futures that they seek.

Larry: More than half of the assets, we manage are related to retirement, making this an outcome central to many of our client conversations.

Laurence Douglas Fink: Aladdin is much more than that. Our clients are leveraging Aladdin as a whole enterprise operating system, connecting multiple asset classes, data, and technology partners on a single platform.

Larry: Blackrock has been at the forefront of innovation and advocacy for retirement solutions for years. In fact, we pioneered the first target date fund called Lightpath back at $19 93, when we introduced the concept it was a revolutionary eliminating some of the guesswork for retirement savings by automatically adjusting there.

Laurence Douglas Fink: Aladdin's integrated offering continues to resonate, with a majority of our sales this quarter spanning multiple Aladdin products. We are in late-stage conversations with several large potential Aladdin clients, and we look forward to executing on more opportunities ahead to bring the benefits of Aladdin to new clients and by expanding relationships with our existing clients. From the early days of developing Aladdin to now managing nearly $10.5 trillion across our platform. Our ambition has always been to help investors benefit from the growth of the capital markets and achieve the financial futures that they seek. More than half of the assets we manage are related to retirement, making this an outcome central to many of our client conversations. BlackRock has been at the forefront of innovation and advocacy for retirement solutions for years. In fact, we pioneered the first target date fund called Lifepath back in 1993. When we introduced the

Larry: Investment mix over the timeframe.

Larry: Fast forward 30 years target date funds have become the most common default investment option in defined contribution plans in the United States, where we're entrusted to manage their retirement assets of 35 million Americans.

Larry: We continue to evolve life path to help deliver the retirement outcome participants need that has meant introducing lightpath options and new countries and a new wrappers such as Lightpath target date, Etfs, we launched last year.

Larry: Our Lightpath target date franchise now has nearly $470 billion in assets and has risen over $115 billion in assets just over the last five years.

Laurence Douglas Fink: It was revolutionary, eliminating some of the guesswork for retirement savings by automatically adjusting their investment mix over their time frame. Fast forward 30 years, and target date funds have become the most common default investment option in defined contribution plans in the United States, where we're entrusted to manage the retirement assets of 35 million Americans.

Larry: In addition to helping people save for retirement, we also work to expand the life past solution to help people spend throughout their increasingly longer retirement.

Larry: Society focuses a tremendous amount of helping people live longer and healthier lives, but it's been just a fraction of that time and effort and helping them afford those extra wonderful years.

Laurence Douglas Fink: We continue to evolve LifePath to help deliver the retirement outcome participants need. That has meant introducing LifePath options in new countries and in new wrappers, such as Lifepath Target Date ETS, which we launched last year.

Larry: This shift from pension to define contribution models that put the large asked the large burden.

Laurence Douglas Fink: Our Lifepath Target Date franchise now has nearly $470 billion in assets and has risen over $115 billion in assets just over the last five years. In addition to helping people save for retirement, we also work to expand the LifePath solution to help people spend throughout their increasingly longer retirement. Society focuses a tremendous amount on helping people live longer and healthier lives, but it spends just a fraction of that time and effort on helping them afford those extra wonderful years.

On individual savers, they have to first build up their retirement nest egg, which in itself is a formidable challenge that even as they have this sizeable savings that retirement theres not much guidance about how to spend or not.

Larry: How not to overspend these savings.

Larry: We've been working for years to address this D accumulation challenge.

Larry: And we believe this will help increase both in America.

In 2020, we announced the life path paycheck. The next generation of target date solutions. It will include an option to purchase a lifetime income stream from insurers selected by Blackrock and is expected to go live towards the end of the month.

Laurence Douglas Fink: The shift from pension to defined contribution models has put a large burden on individual savers. They have to first build up their retirement estate, which in itself is a formidable challenge. Then, even as they have this sizable savings at retirement, there's not much guidance about how to spend or not overspend these savings. We've been working for years to address this de-accumulation challenge.

Larry: We are partnering on implementing Lightpath paycheck right now with 14 planned sponsors representing over $25 billion in target date, AUM and our and now have a half a million participants you will pair the flexibility of our 401K investment with a potential for a predictable paycheck life.

Laurence Douglas Fink: And we believe this will help increase hope in America. In 2020, we announced the Life Path Paycheck, the Next Generation of Targeted Aid Solutions.

Laurence Douglas Fink: It will include an option to purchase a lifetime income stream from insurers selected by BlackRock and is expected to go live towards the end of the month. We are partnering on implementing LifePath's paycheck right now with 14 planned sponsors, representing over $25 billion in target date AUM, and now have half a million participants. You will pair the flexibility of a 401k investment with a potential for a predictable paycheck life income stream similar to a pension. I believe it will be the most used one day. Investment Strategy and Defined Contribution Plan. This pioneering structure can help address global gaps in funding retirement security.

Larry: Income stream similar to our pension.

Larry: I believe it will be in one day, the most used <unk>.

Larry: Investment strategy and defined contribution plans.

Larry: This pioneering structure.

Larry: Help address global gaps in funding retirement security.

Larry: Improve the quality of life and retirement for millions of Americans and bring back hope for those who are retiring.

Larry: It's been four years since the start of the pandemic and the subsequent geopolitical up the Eagles.

Larry: Leaders of countries leaders of companies need to create hope for the future for their all of their stakeholders.

Blackrock: That's certainly what we're doing at Blackrock.

Blackrock: I've spoken before about the fear, we see today southern stoked by increasingly political polarization in the world.

Laurence Douglas Fink: improve the quality of life in retirement for millions of Americans and bring back hope for those who are retiring. It's been four years since the start of the pandemic and the subsequent geopolitical upheavals. Leaders of countries, leaders of companies need to create hope for the future for all of their stakeholders. That's certainly what we do at BlackRock. I've spoken before about the fear we see today, some of it stoked by the increasing political polarization in the world. Our industry and BlackRock have been a subject of political dialogue, mostly in the United States. We recognize some of this as being the industry leader. We have done a better job now of telling our story so that people can make decisions based on facts. Not on lies and not on misinformation or politicization by others.

Blackrock: Our industry and Blackrock have been a subject of political dialogue, mostly in the United States.

Blackrock: We recognize some of this with being the industry leader.

Blackrock: We have done a better job now of telling our story so that people can make decisions based on facts not on lies and not on misinformation or politicization by others.

Blackrock: Unfortunately, there are still others out there who put short term politics, who.

Blackrock: Who continuously lie about these issues they are put into those issues above the long term fiduciary responsibilities.

Blackrock: As a fiduciary politics should never outweigh performance.

Laurence Douglas Fink: Unfortunately, there are still others out there who put short-term politics first and continuously lie about these issues. They are putting those issues above the long-term fiduciary responsibility. As a fiduciary, politics should never outweigh performance.

Blackrock: I do believe that with a vast majority of our clients are long term fiduciary fiduciary approach AD performance are resonating.

Blackrock: We hear it in our dialogue with them and we see it in our flows and I know all of US shareholders see it in our flows over the last past five years clients have entrusted blackrock with an aggregate of $1 nine trillion.

Laurence Douglas Fink: I do believe that with a vast majority of our clients, our long-term fiduciary approach and performance are responding. We hear it in our dialogue with them, and we see it in our flows, and I know all of you as shareholders see it in our flows. Over the past five years, clients have entrusted BlackRock with an aggregate of $1.9 trillion of total net inflows, $1 trillion over the last three years, and nearly $300 billion last year. It has been in the United States where client-led inflows have been in every one of these periods. It is true also in the first quarter of this year. This is, in an environment where the industry experienced flat or negative flows; BlackRock saw inflows.

Blackrock: Of total net inflows.

Blackrock: One trillion dollars over the last three years and nearly $300 billion last year.

It has been in the United States, where client led inflows in every one of these areas.

Blackrock: It is true also in the first quarter of this year.

Blackrock: This is it all is that the environment, where the industry was experienced flat or negative flows Blackrock saw inflows.

Blackrock: Our sustained growth our accelerating momentum are made possible by the trust of our clients and shareholders and the dedication of all of the Blackrock people.

Laurence Douglas Fink: Growth or accelerating momentum is made possible by the trust of our clients and shareholders.

Laurence Douglas Fink: And the dedication of all the BlackRock people. Across our firm, we're delivering BlackRock to meet all our clients' individual needs. We're helping each and every client unlock their new opportunities, and the power of BlackRock's integrated platform has enabled us to drive better outcomes for each and every client and provide them with differentiating growth, which then entails providing differentiating growth for you, our shareholders. I believe at this time our momentum has never been stronger, the opportunity we have in front of us has never been stronger, and I look forward to BlackRock delivering on a significant broad base of opportunities across the world, across our platform, across all of our products and delivering the responsible fiduciary responsibilities that we provide to each and every client. Operator, let's open it up for questions.

Blackrock: Across our firm, we're delivering blackrock to meet all our clients individual needs, whereas <unk>, each and every client unlocked their new opportunities and the power of Blackrock integrated platform has enabled us to drive better outcomes for and each and every client and providing them a <unk>.

Blackrock: Differentiated growth for them, which then entails providing differentiated growth for you our shareholders.

Blackrock: I believe at this time, our momentum has never been stronger the opportunity we have in front of us has never been stronger.

Blackrock: And I look forward at Blackrock to be delivering on our significant broad base of opportunities across the world across our platform across all of our products and delivering the responsible fiduciary responsibilities that we provide to each and every client.

Speaker Change: Operator, let's open it up for questions.

Unknown Executive: At this time, I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad. If you do ask a question, please take your phone off of its speaker setting and use your handset to avoid any potential feedback. Please limit yourself to one question. If you have a follow-up, please re-enter the queue. We'll pause for just a moment to compile the Q&A roster, and we'll go first to Craig Siegenthaler with Bank of America. Hey, good morning, Larry.

Speaker Change: At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad. If you do ask a question. Please take your phone off of its speaker setting and use your handset to avoid any potential feedback.

Speaker Change: Please limit yourself to one question. If you have a follow up please reenter the queue, we'll pause for just a moment to compile the Q&A roster.

Speaker Change: Well go first to Craig Siegenthaler with Bank of America.

Laurence Douglas Fink: The Bulletproof Executive, 2013 Hey Craig, good morning.

Craig William Siegenthaler: Hey, good morning, Larry.

Craig William Siegenthaler: Hey, Craig good morning.

Craig William Siegenthaler: So my question is on your commentary around building.

Craig William Siegenthaler: So my question is around building momentum and line of sight into significant fundings. So, if we exclude fee rate issues like divergent beta, when do you think BlackRock can get back to 5% base fee organic growth? And with the law of large numbers a factor, what is your confidence that this objective is still achievable at your current $10 trillion AUM size?

Craig William Siegenthaler: Then Tim in line of sight into significant fundings. So if we exclude theory to issues like divergent beta.

When do you think Blackrock can get back to 5% basically organic growth and with the law of large numbers of factor what is your confidence that this objective is still achievable at your current 10, Chilean AUM site.

Martin Small: Thanks, Craig. How are you? It's Martin.

Craig William Siegenthaler: Alright.

Craig William Siegenthaler: Craig how are you, it's Martin listen I'd start by late Q1 net flows were solid at 76 billion and on a more granular look we just see durable growth in that flows mix, we had about $100 billion across Etfs retail institutional active institutional fixed income of course, we saw some of these $19 billion redemptions from <unk>.

Martin Small: Listen, I'd start by saying Q1 net flows were solid at $76 billion. And on a more granular look, we just see durable growth in that flow mix. We had about $100 billion across ETFs, retail, institutional active, and institutional fixed income. Of course, we saw some of these $19 billion redemptions from cash with the Good Friday quarter end dynamic, and the $26 billion rebalanced away in institutional index equities. You know, those institutional index equities happen from time to time. They're not meaningful revenue impacts or fee rate detractors, but they weigh on the kind of long-term flow totals.

Craig William Siegenthaler: Cash with the good Friday quarter end dynamic and the $26 billion rebalanced away in institutional index equities, you know those institutional index equities happened from time to time, they are not meaningful revenue impacts or fee rate detractors, but they weigh on kind of the low long term flow totals when we look at this core momentum on flows excluding the episodic index.

Martin Small: And I think what Larry's getting at is that we've been selected for a breadth of mandates across investment management and technology that we see supporting 5% organic growth and will fund over future quarters. Our planned acquisition of GIP will help us build and bump from there. So, we look forward to closing that transaction, executing on these mandates, and keeping you guys posted on our progress.

Craig William Siegenthaler: <unk> Q1 flows were $100 billion, it's a healthy trajectory, it's an affirmation for us that we're focused on the right things to grow with clients and on base fees. The management team here, we really feel like we've turned a corner over the last two quarters, we see really solid trends in organic fee growth there really some of the best since the end of 2021.

Craig William Siegenthaler: We saw excellent momentum to finish the fourth quarter, which you've talked about on the last last call. We closed out November and December higher than target in this quarter March new base fees annualized at target. After we had a slower start so over the last six months, we see organic base fee growth ticking up and trending more halfway or halfway plus to our long term targets.

Martin Small: I would just say

It's not a straight line, but we're moving to target and I say this because we see key positive trends in these sort of critical base fee growers for US retail posted 7 billion of flows in that 40 to 50 basis point bucket moneys going back to work redemption rates are moderating, we see really excellent momentum in active overall with 15.

Laurence Douglas Fink: Rob Kapito is in Asia; the type of conversations we had there, the opportunities we see in Europe, in the UK, in the Middle East, these are just very large opportunities, large mandates, big opportunities And if you then overlay the opportunities, If you overlay what infrastructure can do related to the build-out of power, with all the AI promise and the need for data centers, the need for power is going to be extraordinary. And all of this is going to lead to much bigger opportunities. And, more importantly, more and more clients are going to be seeking those organizations who deliver proprietary differentiated products.

Craig William Siegenthaler: Billion of flows and good velocity in institutional and retail active fixed income in particular at $9 billion and I think Larry is getting at we have been selected for a breath of mandates across investment management technology that we see supporting 5% organic growth and we will fund over future quarters. Our planned acquisition of <unk> will help us build and bumped from there.

Craig William Siegenthaler: So we look forward to closing that transaction executing on these mandates in keeping you guys posted on our progress.

Speaker Change: I would just add.

Speaker Change: The breadth of conversations we're having with clients worldwide, Rob computer right now is in Asia. The type of conversations we had there the opportunities we see in Europe.

Speaker Change: In the U K middle East.

Speaker Change: These are just very large opportunities large mandates big opportunities.

Speaker Change: And if you then overlay the opportunities.

Speaker Change: If you overlay what if.

Speaker Change: Infrastructure can do related to the build out of power.

Unknown Executive: Thank you. We'll go next to Michael Cyprys with Morgan Stanley. Good morning.

Speaker Change: With all the AI promise and the need for data centers and the need for power is it going to be extraordinary.

Michael J. Cyprys: Hey, thanks for taking the question. I just wanted to ask about balancing investment spend with margin expansion. In the past, we've heard BlackRock talk about being margin aware. So just curious how the thinking on that has evolved. What does that mean in today's environment? And how might you quantify the opportunity for margin expansion over time? And how do you see some of the levers to achieve that?

Speaker Change: All of this is going to lead to much bigger opportunities.

Speaker Change: And then more importantly.

Speaker Change: More and more clients are going to be seeking those organizations, who deliver the proprietary differentiated products.

Speaker Change: Okay.

Speaker Change: Thank you we'll go next to Michael Cyprus with Morgan Stanley.

Michael J. Cyprys: Hey, good morning, Thanks, Hey, Thanks for taking the question just wanted to ask about balancing investment spend with margin expansion in the past we've heard Blackrock talk about being margin aware. So just curious how the thinking on that has evolved what does that mean in today's environment, but how might you quantify the opportunity for margin expansion over time, and how do you see.

Speaker Change: Some of the levers to achieve that.

Speaker Change: Okay.

Martin Small: Thanks, Mike. Our approach to shareholder value creation is obviously to generate differentiated organic growth. It's to drive operating leverage at a premium margin, and it's to execute on a consistent capital management strategy. We have a strong track record of investing in our business for growth and scale and expanding profitability. And I want to emphasize that it's not just about growth; it's about profitable growth over the long term, and that growth comes from making continued investments in our business. And I've talked a lot about it on the last several calls and, obviously, some of the other meetings we've had.

Speaker Change: Thanks, Mike.

Speaker Change: Our approach to shareholder value creation is obviously to generate differentiated organic growth.

Speaker Change: It is to drive operating leverage and a premium margin and it's to execute on our consistent capital management strategy. We have a strong track record of investing in our business for growth and scale and expanding profitability and I want to emphasize it's not just about growth it's about profitable growth over the long term and that growth comes from making continued investments in our business.

Speaker Change: And I've talked a lot about on the last several calls and obviously some of the other meetings. We've had we're looking at size of our operating investments in line with the prudent lens on organic growth potential we're aiming to put more flexibility in our cost base and variable <unk> expenses, where we can and most importantly, we're looking to generate fixed cost scale, especially through <unk>.

Martin Small: We're looking to size our operating investments in line with a prudent lens on organic growth potential. We're aiming to put more flexibility in our cost base and variability in expenses where we can. And most importantly, we're looking to generate fixed cost scale, especially through investments in technology. We're consistently delivering industry-leading margins, which is a goal, and we've expanded our margin in 6 out of the last 10 years. And I think those scale indicators are coming through in our results.

Speaker Change: <unk> and technology, we're consistently delivering industry, leading margins, which is the goal and we've expanded our margin in six out of the last 10 years and I think those scale indicators are coming through in our results. We are delivering profitable growth. We generated 180 bps of margin expansion year on year, while revenue op income and EPS all rose double digits.

Martin Small: We're delivering profitable growth. We generated 180 bps of margin expansion year on year, while revenue, operating profit, income, and EPS all rose double digits. And we delivered 60 basis points of sequential margin improvement over the last 18 months, up two and a half trillion while head counts were actually flat or slightly lower. So, I feel like we're delivering benefits of scale and productivity, which is showing in margin expansion. As I mentioned, we're planning for full year load and bid, single digits, core GNA growth, and flat head count, both excluding the transaction. So, you've heard on our last few calls, and I hope today, and some of Larry's color, we're looking to drive more fixed cost scale that comes from technology. It comes from automation.

Speaker Change: And we delivered 60 basis points of sequential margin improvement over the last 18 months AUM is up $2 five trillion, while head count is actually flat or slightly lower so I feel like we're delivering benefits of scale and productivity, which is showing in margin expansion.

Speaker Change: As I mentioned, we're planning for full year low to mid single digits core G&A growth flat head count both excluding the GIC transaction. So you've heard on our last few calls and I hope today and some of Larry's color. We're looking to drive more fixed cost scale that comes from technology. It comes from automation. It can come from AI. It comes from organizational design.

Martin Small: It can come from AI. It comes from organizational design, global footprint printing, using some of our innovation hubs around the world. We see those as our major levers to drive margin expansion. And in the end, we're just looking to optimize organic growth in the most efficient way possible to deliver growth for clients and shareholders and ultimately expand our margin over time.

Speaker Change: Global footprint.

Speaker Change: <unk> using some of our innovation hubs around the world, we see those as our major levers to drive margin expansion and in the end, we're just looking to optimize organic growth in the most efficient way possible deliver growth for clients and shareholders and ultimately expand our margin over time, Michael I would just add.

Laurence Douglas Fink: Michael, I would just add... As we continue to be investing in AI, our most recent experience of having two and a half trillion dollars more assets with the same headcount is a really good indication of how we are trying to drive more efficiencies, more productivity. I think this is critical for, you know, we're going to bring down inflation in America. This is how it's going to have to be done, driven through technology, which will increase more productivity. And overall, it actually, through that process, if we continue to drive more productivity, what it also means is rising wages. So people do. And the whole organization is doing more with less, less people as a percent of the overall organization. That is really our ambition.

Speaker Change: As we continue to be investing in AI.

Our most recent experience of.

Speaker Change: Having two five trillion dollars more assets with the same head count as a real good indication of how we are trying to drive more efficiencies.

Speaker Change: More productivity I think this is critical we're going to bring down on inflation in America. This is how it is going to have to be done driven through technology.

Speaker Change: And.

Speaker Change: Which will increase more productivity and overall.

Speaker Change: Actually through that process, if we can do to drive more productivity.

Speaker Change: What it also means is rising wages.

Speaker Change: So people do more.

Speaker Change: More.

Speaker Change: And the whole organization is doing more with less and less people as a percent of the overall organization that is really our ambition.

Unknown Executive: Thank you. Your next question comes from Ken Worthington of J.P. Morgan. Hi, good morning, and thanks for taking the question. Fixed income, fixed income flows have picked up for the US, the US mutual fund industry so far this year. But the same data services that track the industry don't show a proportionate pickup for BlackRock. Your fixed income ETF sales were solid at $18 billion, below the level seen last year. Can you talk about the competitive landscape for fixed income retail and fixed income ETFs, both inside and outside the US? And to what extent do you think investor appetite may have changed in 2024? So Rob here.

Speaker Change: Thank you. Your next question comes from Ken Worthington with JP Morgan.

Hi, good morning, and thanks for taking the question.

Kenneth Brooks Worthington: Fixed income fixed income flows have picked up for us to use.

Mutual fund industry, so far this year, but at the same data services that track the industry don't show a proportionate pickup for Blackrock your fixed income ETF sales will solve it 18 billion or below levels seen last year can you talk about the competitive landscape for fixed income retail and fixed.

Kenneth Brooks Worthington: Income Etfs, both inside and outside the U S and to what extent you think investor appetite may have changed in 2024.

Rob: So Rob here.

Robert Steven Kapito: You know, the conversations that we're having across all of the distribution system are about a new allocation to fixed income. But it's being very much clouded by all the noise around inflation and the Fed. So the yield curve remains inverted, and investors are currently getting paid to wait. A more balanced term structure of interest rates is going to be the indicator to watch. And that's where we'll start to see demand for intermediate and longer-term fixed income. So, the first quarter for us had flows of $42 billion, which I think is considerable. We saw strength in bond ETFs from immunization activity and institutional investors, and about 25% of the flows were into active strategies. So we're seeing renewed demand for active fixed income.

Rob: The conversations that we're having across all of the distribution systems.

Rob: Our about a new allocation into fixed income.

Rob: It's being very much clouded by all the noise around inflation and the fed.

Rob: So the yield curve remains inverted and investors are currently getting paid to wait.

Rob: And a more balanced term structure of interest rates is going to be the indicator to watch.

Rob: And that's where it will start to see demand for intermediate and longer term fixed income.

Rob: The first quarter for US flows of 42 billion, which I think is considerable.

Rob: The strength in the bond Etfs from immunization activity and institutional and about 25% of the flows went into active strategies. So we're seeing renewed demand for active fixed income and that's led to flows into the high yield.

Robert Steven Kapito: And that's led to flows into the high yield, the unconstrained, and the total return strategies, and the fact that our longer-term performance, with about 93% of our taxable active fixed income AUM above the benchmark or pure medium in the last five years, is really setting us up to capture this. But I do think the noise that's out there focused on inflation and the fact that you can still earn 5%, which is very attractive right now.

Rob: Unconstrained and total return strategies and the fact that our longer term performance as about 93% of our taxable active fixed income AUM above the benchmark or peer median in the last five years are really setting us up to capture this but I do think that.

<unk> that's out there focused on inflation and the fact that you threw the start still earn 5%, which is very attractive right now is causing the delay in more allocations to fixed income.

Robert Steven Kapito: is causing the delay in more allocations to fixed income. The other part of why I'm more encouraged is that we are finding a growing interest in high-performance active fixed income strategies alongside private market strategies. So I think that we stand to vote very well once you see some changes in the yield. Thank you. We'll go back to Alex Blostein.

Rob: The other part of why I'm more encouraged as we are finding a growing interest.

Rob: And high performing active fixed income strategies alongside private market strategies. So I think that we stand to bode very well once you see some changes in the yield curve.

Speaker Change: Thank you Alex.

Unknown Executive: Go ahead.

Speaker Change: Good.

Laurence Douglas Fink: Let me just add, operator, to Ken's question. Ken, I do believe, as an industry, the large pension funds that have an overallocation of private equity and the rotation of money in the private equity area have slowed down precipitously. We are also seeing evidence that more and more clients are keeping a higher balance of cash to meet their liability discharges. And so, without the momentum and the velocity of money in private equity, they actually have to keep higher cash balances, too. So I think that is something to be watched, too. If there was an unlocking in the movement of private equity, I do believe you would see a faster allocation for the industry in fixed income and other income-producing products.

Speaker Change: Go ahead, let me just add operator to Ken's question.

Speaker Change: Can I do believe as an industry.

Speaker Change: The large pension funds that have an over allocation of private equity and the rotation of money in the private equity area has slowed down precipitously. We are also seeing evidence that more and more clients are keeping a higher balance of cash that meet their liability.

Speaker Change: Discharges.

Speaker Change: And so without the.

Momentum in the velocity of money in private equity they actually have to keep higher cash balances too. So I think that is something to be watched two if there was a not and lock in the movement of private equity I do believe you would see a faster allocation for the industry.

In fixed income and other income producing products.

Unknown Executive: Thank you. We'll go next to Alex Blostein with Goldman Sachs. Bye, y'all. Hey, Larry. Good morning, everybody.

Speaker Change: Thank you we'll go next to Alex <unk> with Goldman Sachs.

Alex: Hi, Alex.

Alex: Hey, Larry good morning, everybody.

Alexander Blostein: My question is related to private markets and GAP. Larry, you referred to it again this morning as a transformational deal for BlackRock, maybe similar to some of the other large ones you've done. Does this give you enough in terms of what you're trying to accomplish in private markets broadly? Or do you expect to pursue more acquisitions that are related in this area? And I guess somewhat related to that, you know, growth in private markets and retail products has been quite significant and still early days. Maybe just remind us of how BlackRock is pursuing that.

Alex: My question is related to private markets and VIP, Larry you referred to it again this morning as a transformational deal for Blackrock, maybe similar to some of the other large ones. You've done does this give you enough in terms of what you're trying to accomplish in private markets broadly.

Alex: Or do you expect to pursue more acquisitions that are related in this area.

Alex: Somewhat related to that growth in private markets retail products has been quite significant and still early days, maybe just remind us on how blackrock is pursuing that opportunity.

Martin Small: Hey, Alex, how are you? It's Martin. I'll offer a few thoughts, and then Larry will

Alex: Hey, Alex how are you it's Martin.

Martin: Offer a few thoughts and then.

Martin: Larry I'll jump in let's say the all of our clients continue to increase their allocations to private markets. That's what drove our acquisition to be front. It's what drove our planned acquisition of <unk> and it's also a great focus of the organic investments we've made to build in.

Martin Small: Let me say, look, all of our clients continue to increase their allocations to private markets. That's what drove our acquisition of E-Front.

Martin Small: It's what drove our planned acquisition of GIP, and it's also a great focus of the organic investments we've made to build a liquid alternatives business of size. There is sort of a liquid alternatives business

Martin: Illiquid alternatives business of size.

Martin: There are sort of the liquid alternatives business, we've reached $167 billion of assets roughly $140 billion <unk>, we had a good quarter their infrastructure and private credit deployment added 1 billion of inflows offset by return of capital that I talked about we're getting close on our final closes for Blackrock infrastructure for bond for de Carbonization.

Martin Small: We've reached $167 billion of assets, roughly $140 billion in fee-paying assets. We had a good quarter there, with infrastructure and private credit deployment, adding a billion of inflows offset by the return of capital that I talked about. We're getting close to our final closes for our BlackRock Infrastructure 4 fund for decarbonization partners, which has been a great first-time fund advantage. We've got $30 billion of committed but uninvested capital. So there's good dry powder in the system.

Martin: <unk> partners, which has been a great first time funded vintage we've got $30 billion of committed but uninvested capital. So theres good dry powder in the system as Larry mentioned, we're originating really strong unique transactions. There. So we think our capabilities are expanding in a way that's going to plan just yesterday, we announced in <unk>.

Martin Small: As Larry mentioned, we're originating really strong, unique transactions there. So we think our capabilities are expanding in a way that's going to work. Just yesterday, we announced an infrastructure debt deal with Santander, where we're going to be financing about $600 million of infrastructure loans in a structured transaction. And we just see good fundraising momentum, which we think we can kick into next year with GIP. Since 2021, we've had $140 billion of gross capital across the platform, and we continue to see good momentum with clients. And on the topic you mentioned, we've been building out our semi-liquid products for retail with credit strategies. Our credit strategies interval fund and our non-traded credit, BDC BDET, have a combined billion-plus of AUM. We received a really important placement for BDET at the National Wirehouse.

Martin: Structured that deal with Santander, where we're going to be financing about $600 million of infrastructure loans in a structured transaction and we just see good fundraising momentum, which we think we can kick into next year with CIP. Since 2021, we've had $140 billion of gross capital across the platform continue to see good momentum with clients and to the <unk>.

Martin: Rick you mentioned, we've been building out our semi liquid products for retail with credit strategies, our credit strategies interval funds and our non traded credit BDC be that have a combined 1 billion plus of AUM.

Martin: We received a really important placement for bead added a national wire house. So we think that'll be a strong seller and for organic growth and then finally that planned acquisition with CIP is going to really extend our capabilities. We think the business can be a much stronger platform for capital formation of scale and build on this philosophy, we have in our liquid alternatives. We also think there is a <unk>.

Martin Small: So we think that'll be a strong accelerant for organic growth. And then, finally, that planned acquisition with GIP is going to really extend our capabilities. We think the business can be a much stronger platform for capital formation of scale and build on this velocity we have in the liquid alternatives. We also think there's a great opportunity to bring GIP's capabilities to private wealth globally and retail retirement platforms in the UK and Europe with the LTIF and LTAF structures. And obviously, we'll keep you updated on our progress.

Martin: Great opportunity to bring <unk> capabilities to private wealth globally retail require retirement platforms in the U K and Europe with the <unk> and El cap structures and obviously, we'll keep you updated on our progress.

Laurence Douglas Fink: I would just add that the feedback we're getting from clients, including a dinner ad with a major energy company last night. The opportunity we have for driving more unique proprietary origination is going to be driving accelerated growth for us in the private markets, especially in infrastructure. I do believe the combination of our two organizations is going to open up so many more.

I would just add that.

Martin: The feedback, we're having from clients, including a dinner Ed with a major.

A major energy company last night.

Martin: The opportunity we have for driving more.

Martin: Unique proprietary origination is going to be driving accelerated growth for us in.

Martin: In the private markets, especially in infrastructure.

Martin: I do believe that combinations of the two organization is going to open up so many more avenues avenues, where companies, but also avenue avenues for centuries.

Laurence Douglas Fink: We're knocking on BlackRock to see if there's other opportunities we want to pursue. And if it makes sense one day, we will continue to be open-minded to pursue more private market opportunities.

Speaker Change: And that being said, we're always in the market are looking for different opportunities.

Speaker Change: And we're not slowing down and looking at different opportunities. We're not here to suggest we're doing anything that is forthcoming because the number one through five thing to do is to close CIP.

Unknown Executive: Thank you. We'll go next to Dan Fannon with Jeff.

Brian Bertram Bedell: Thanks. Good morning, Martin. For your comments on improving trends throughout the quarter for flows, can you put into context what that means for maybe the exit fee rate, and also on this pipeline of activity that's building? Can you talk about the mix of fees and products more specifically and how that might inform your base fee outlook going forward?

Speaker Change: But the doors are knocking at Blackrock to see if there's other opportunities.

Speaker Change: We want to pursue and if it makes sense. One day, we will continue to be open minded to pursue more private market opportunities.

Speaker Change: Thank you we'll go next to Dan Fannon with Jefferies.

Daniel Thomas Fannon: Thanks, Good morning.

Daniel Thomas Fannon: It's Martin for your comments thank.

Daniel Thomas Fannon: Thank you Martin for your comments on improving trends throughout the quarter for flows can you put into context, what that means for maybe the exit fee rate and also on this pipeline of activity that building can you talk about the mix of work.

Martin Small: Yeah, so thanks, Dan. As I mentioned, we see good base fee momentum. At the end of Q4, we were running hotter than target. At the end of this quarter, we're at target.

Daniel Thomas Fannon: <unk> and products more specifically and how that might inform your base.

The outlook going forward.

Yes, so thanks Dan.

Martin: As I mentioned, we see good basically momentum at the end of Q4, we were running at hotter than target at the end of this quarter, we're at target and as I mentioned, when we look at the trends over months not days, we feel like we're have our halfway plus to our target growth. So we've got good good base fee momentum.

Martin Small: And as I mentioned, you know, when we look at the trends over months, not days, we feel like we're half or halfway plus to our target growth. So we've got good base fee momentum. You know, first quarter base fees, excluding securities lending, were $3.6 billion, which is up 9% year on year. This is largely due to the impact of market movements on AUM and organic growth. And if you're, you know, the Q2 entry fee rate, ex-fee lending is pretty much flat compared to the Q1 fee rate on a day count equivalent basis. But overall, I think, as we see good flows into active with the $15 billion we've had, as I mentioned, retail flows of $7 billion coming in, we see good fee rate trends, which we think are mostly about mix.

Martin: First quarter base fees, excluding securities lending were $3 6 billion, which is up 9% year on year.

Martin: Which is largely due to the impact of market movements on AUM and organic growth.

Martin: And if the Q2 entry fee rate XP lending is pretty much flat compared to the Q1 for a fee rate on the day count equivalent basis, but overall I think as we see good flows into active with a $15 billion. We had as I mentioned retail flows of $7 billion coming in with.

Martin: See good fee rate trends, which we think are about mostly about mix.

Martin Small: We focus really on driving organic base fee growth in the most efficient way possible, focusing on the clients, and focusing on the investments they want to make. We don't focus on a specific fee rate or product. We focus on the clients, and the fee rates are more of an output. But the trends in terms of where we're raising assets on the fee rate are good. But as I mentioned, the Q2 entry fee rate, and ex-fee lending is flat compared to the Q1 fee rate on the same day count.

We focused really on driving organic base fee growth in the most efficient way possible focusing on the clients focusing on the investments they want to make sure. We don't focus on a specific fee radar product, we focus on the clients and the fee rates more of an output, but the trends in terms of where we're raising assets on on the <unk>.

Martin: The rates, we think are good but as I mentioned Q2 fee rate Q2 entry fee rate, except lendings flat compared to the Q1 fee rate.

Martin: On the same day count.

Martin Small: Thank you. We'll go next to Bill Katz with TD Talent.

Martin: Thank you we'll go next to Bill Katz with TD Cowen.

William Raymond Katz: Okay, thank you for taking the question. Good morning, everybody. And thank you so much for taking the question. I appreciate the update. In a different vein, performance fees continue to run pretty high. And I was just sort of wondering, are we reaching a new level of normalized performance fees? And how might that translate into sort of the comp ratio as we look ahead, particularly as you continue to migrate to a bigger pool of private markets post-GIP? Thank you.

William Raymond Katz: Okay. Thank you taking my question good morning, everybody and thank you so much for taking the question I appreciate the update.

William Raymond Katz: Maybe a different vein performance.

William Raymond Katz: Performance fees continue to run pretty high and just sort of wondering are we reaching a new level of normalized performance fees.

William Raymond Katz: And how might that translate into sort of the comp ratio as we look ahead, particularly as you continue to migrate to a bigger pool of private markets post Gi P. Thank you.

Martin Small: Thanks, Bill, for the question. We appreciate it. So on the performance fees of $204 million in the quarter, obviously, they're up about four times year on year. But if you could put yourself in a time machine and think back to that first quarter in 23, it was a really difficult market. We had SVD, we had some volatility in the rate markets, etc. So I think it was a tough time.

William Raymond Katz: Okay.

Speaker Change: Thanks Bill for the question. We appreciate it so on the performance fees of $204 million in the quarter. Obviously, they were up about four times year on year if.

Speaker Change: If you could put yourself in a time machine and think back to that first quarter and 23. It was a really difficult market. We had SBB, we add some ball in the right markets et cetera. So I think it was.

Speaker Change: A tough time this quarter, we've really seen good performance coming through on our teams.

Martin Small: This quarter, we've really seen good performance coming through on our teams, which has been very, very strong. And I think reflected in those performance fees, rough justice, about half of that performance fee is coming from kind of our private equity funds and private equity programs where we had some very successful realizations that Larry talked about last year, which was CREED and some of the distributions associated with that. And the other half is more in liquid hedge funds in our strategic equity hedge funds and some of our systematic strategies as well. Ultimately, our goal is to deliver long-term performance clients, and we see performance fee revenues ticking up. Obviously, there's healthy alignment there in more supportive markets and stronger markets and strong performance. But we'd expect a lot of that leverage to drop to a lower comp to revenue ratio. But ultimately, talent is one of our key investments, and we'd expect it to be on a going forward basis.

Speaker Change: She has been a very.

Speaker Change: Very very strong and I think reflected in those performance fees rough justice about half of that performance fee is coming from kind of our private equity funds and private equity programs, where we had some very successful realizations that Larry talked about last year.

Speaker Change: Create and some of the distributions associated with that and the other half is more in liquid hedge funds and our strategic equity hedge funds and some of our systematic strategies as well ultimately our goal is to deliver long term performance of clients and where we see performance fee revenues ticking up obviously theres healthy alignment there.

Speaker Change: And as more supportive markets and stronger markets and strong performance, we would expect a lot of that leverage to drop to a lower comp to revenue ratio, but ultimately talent is one of our key investments and we'd expect it to be on a go forward basis.

Unknown Executive: Thank you. We'll go next to Brian Bedell with Deutsche Bank.

Speaker Change: Thank you we'll go next to Brian Bedell with Deutsche Bank.

Unknown Executive: Great, thanks. Good morning, folks. Good morning.

Brian Bertram Bedell: Great. Thanks, Good morning folks good morning.

Unknown Executive: Thanks for taking my question. Maybe just to focus on the multi-asset category and a couple areas within that. I think, Martin, you were talking about, obviously, the build of the organic growth pipeline and, also, Larry, with your comments about the conversation pipeline. Can you talk about two areas in particular that have developed throughout the year? That would be OCIO deals, and then also, as we start up Lifepath Paycheck, how do you anticipate that contributing to organic growth, I guess, as the year unfolds, obviously very early, but even over the next couple of years?

Brian Bertram Bedell: Thanks for taking my question.

Brian Bertram Bedell: Just to focus on the multi asset category in a couple of areas within that.

Brian Bertram Bedell: You were talking about obviously.

Brian Bertram Bedell: The bill of the organic.

Brian Bertram Bedell: Organic growth pipeline.

Brian Bertram Bedell: And also in conjunction Larry with your comments about the.

Brian Bertram Bedell: The conversation pipeline can you talk about two areas in particular as the developed throughout the year that would be O CIO.

Deals and then also.

Brian Bertram Bedell: Startup life path paycheck, how you anticipate that contributed.

Brian Bertram Bedell: Contributing to organic growth I guess as the year unfolds, obviously very early.

Brian Bertram Bedell: But even over the next couple of years.

Unknown Executive: Sure. Thanks so much for the question. I appreciate it. I guess I can start with a little color on the multi-asset flows, and then Larry can comment on LightPath Paycheck.

Speaker Change: Sure. Thanks, so much for the question appreciate it I guess, maybe I can start with a little color on the multi asset flows and then Larry can comment on Lightpath paycheck.

Martin Small: So multi-asset strategy saw inflows in the quarter of about $5 billion after we had a really strong 2023 with $83 billion. Those strong inflows were driven by the continued demand for our LifePath target date offerings. And obviously, we see significant growth ahead in that core business, but also in the upcoming launch of LifePath Paycheck. Our LifePath target date franchise has about $470 billion in assets and generated $9 billion of flows in the first quarter, thanks to the funding of several large mandates. We have about an organic growth rate of 8%, so we're leading the market there in terms of growth, and we continue to outperform relative to the industry. Again, we're building on a strong core business there. We had $25 billion in flows in 2023, which was about 7% growth.

Speaker Change: So multi asset strategy saw inflows in the quarter of about $5 billion. After we had a really strong 2023 was <unk> 83 billion. The strong inflows were driven by the continued demand for our life path target date offerings and obviously, we see significant growth ahead in that core business, but also in the upcoming launch of Lightpath paycheck.

Speaker Change: Our lifetime target date franchise has about $470 billion in assets generated $9 billion of flows in the first quarter. Thanks to the funding of several large mandates we have about an organic growth rate of 8%. So we're leading the market there in terms of growth and we continue to outperform relative to the industry again, we're building on our <unk>.

Speaker Change: <unk> core business. There we had 25 billion of flows in 'twenty, three which was about 7% growth with a number one DC investment only D. CIO firm, we have 70000 DC plans and we're the only provider I think that's really global.

Martin Small: We're the number one DC investment only DCIO firm. We have 70,000 DC plans, and we're the only provider I think that's really global. Most of the assets of BlackRock are investing to finance retirement, and we've been at the forefront of innovation and advocacy for retirement solutions throughout our history. It's a key part of our growth, and the innovation that we're doing in LifePath Paycheck is exciting.

Speaker Change: Most of the assets at Blackrock are investing to finance retirement, and we've been at the forefront of innovation and advocacy for retirement solutions throughout our history.

Speaker Change: Key part of our growth and the innovation that we're doing in Lightpath paycheck, we think it's exciting and a significant area of our future organic organic growth.

Laurence Douglas Fink: As I said in my prepared remarks, we have 14 corporations that are preparing to transform their Defined Contribution Plan to buy a PATH paycheck. But the conversation we're having with so many other plans is enormous. Many clients wanted to see the actual implementation of these plans. As we said in a prepared remark, the first implementation of the first plan is going to be in the next few weeks. We'll have many announcements about that, and we plan to really, really make that a big issue for us going forward.

Speaker Change: As I said in my prepared remarks, we have 14 corporations that are preparing to.

Speaker Change: Transform their defined contribution plan to bypass pay check.

Speaker Change: But the conversations we're having with so many other plans as is enormous.

Many clients wanted to see the actual implementation of these plans.

Speaker Change: We said in our prepared remarks, the first implementation of the first plan is going to be in the next few weeks, we will have many announcements about that and we plan to really really make that a big.

Speaker Change: A big issue for us.

Speaker Change: Going forward we.

Laurence Douglas Fink: We believe, as I said before, this is going to change retirement. The movement away from defined benefits to defined contributions has left many, many individuals Transcribed by https://otter.ai, And this eliminates some of the uncertainty for retirement. The target data eliminated a lot of the variability of retirees. But there has been no transformation in terms of bringing in, you know, once you are retired, how do you know what you have? and through this innovation, of Integrating Investment Strategies Around Insurance Wrappers, can really narrow the outcomes so that the individual can have a very narrow corridor of what the dollar amount that they're going to be earning each.

Speaker Change: We believe as I said before this is going to change for retirement.

Speaker Change: The movement away from defined benefits to defined contributions have left many many individuals stranded and making the decisions of their own retirement by themselves.

Speaker Change: And this eliminates some of the uncertainty for retirement.

Speaker Change: Target dated eliminated a lot of the variability of retirement.

Speaker Change: But there has been no.

Speaker Change: Transformation in terms of bringing once you are retired how do you know what you have.

Speaker Change: And through this innovation.

Speaker Change: Of integrating investment strategies around.

Speaker Change: Insurance wrappers.

And really narrow the outcome.

Speaker Change: The individual can have a very narrow corridor of what the dollar amount that they're going to be earning each month.

Laurence Douglas Fink: And as I said in my letter, with growing longevity, retirement is going to become a bigger and bigger issue, and having this type of certainty really will alleviate some of the fear. As I said, our conversations are broad. And let me be clear, the conversations are also now beginning in Europe and other places too.

Speaker Change: As I said in my letter with.

Speaker Change: Growing longevity.

Speaker Change: Retirement is going to become a bigger and bigger an issue in having this type of certainty.

Speaker Change: Really will alleviate some of the fear.

Speaker Change: As I said, our conversations are broad and let me be clear.

The conversations are also now beginning in Europe and other places too. So we look at this as a major component of our future growth rates over the next three to five years, obviously, it's not the highest fee based product that is it is like a target date products, but.

Laurence Douglas Fink: So we look at this as a major component of our future growth rates over the next three to five years. Obviously, it's not the highest fee-based product. It is like a target date product, but it can generate more connectivity with more clients and deeper relationships with all our clients. And so this is something that I'm very proud of what the firm has created. And I do believe it's going to transform BlackRock as a leader in retirement benefits.

So it's but it can generate more connectivity with more clients deeper relationships with the with all of our clients and so this is something that I'm very proud of what the firm has created and I do believe it's going to transform black box.

Speaker Change: As a leader in retirement and benefits.

Patrick Davitt: Thank you. We'll go next to Patrick Davitt with Autonomous Research.

Thank you we'll go next to Patrick Davitt with Autonomous research.

Unknown Executive: Good morning, Patrick. Good morning, everyone.

Patrick Davitt: Good morning, Patrick.

Patrick Davitt: Good morning, everyone. Thanks.

Patrick Davitt: My question is on Europe ETFs. Obviously, the active to passive equity flow mix continues to track more like the U.S. and Europe so far this year. So firstly, could you update us on the defensibility of your positioning around that theme? To what extent and to what extent are you seeing more aggressive price competition? And finally, at a higher level, to what extent are you seeing a real change in how ETFs are bought and sold in Europe that could portend this, you know, so-called catch-up trend continuing more indefinitely? Thank you.

One is on Europe, Europe, Etfs, obviously, the active to passive equity flow mix continues to track more like the U S and Europe. So far this year. So firstly could you update us on the defensibility of your positioning around that theme to what extent and to what extent, you're seeing more aggressive price competition and finally higher level.

Patrick Davitt: To what extent you are seeing a real change in how Etfs are bought and sold in Europe that could portend.

Patrick Davitt: So called catch up trend continuing more and definitely thank you.

Martin Small: Thanks, Patrick. I really appreciate the question. As you mentioned, we had about $67 billion of iShares inflows in the first quarter, led by, you know, core fixed income, iBit. The business is running in a very strong way, high single-digit asset growth, mid single-digit base fee growth. All the trends globally are very strong.

Speaker Change: Thanks, Patrick.

Speaker Change: Really appreciate the question as you mentioned, we had about $67 billion of Ishares inflows in the first quarter led by core fixed income Ibs. The business is running in a very strong way high single digits asset growth, maybe mid single digit base fee growth all the trends globally are very strong but we.

Martin Small: But we have been stressing, and I'm glad for the question, just the real strength and competitive positioning of the iShare business in Europe. You know, European iShares continues to lead the market with about 30% market share of inflows. That's two times the inflows of the number two player, and our inflows exceed those of the number two and three players combined. Our iShares franchise in Europe is 850 billion AUM. That's bigger than the next five players combined.

Speaker Change: Had been stressing.

Speaker Change: I'm glad for the question, just a real strength and competitive positioning of the Ishares business in Europe.

Speaker Change: European Ishares continues to lead the market with about 30% market share of inflows. That's two times the inflows of the number two player and our inflows exceed the two and three players combined.

Speaker Change: Ishares franchise in Europe is 850 billion of AUM, that's bigger than next five players combined so we think we have a real outsized opportunity to grow Etfs in the UK and Europe, and obviously the competitive dynamics. There I think are very very different than they are here in the United States in terms of.

Martin Small: So we think we have a real outsized opportunity to grow ETFs in the UK and Europe. And obviously, the competitive dynamics there are very, very different than they are here in the United States, in terms of the buying units and how buying units are sold. This is largely a private banking market that uses exchange-traded funds through discretionary private management programs. And iShares is really a very strong and preferred provider. I want you to think about it this way.

Speaker Change: The buying units.

Speaker Change: The units are sold this is largely a private banking market that uses exchange traded funds through discretionary private management programs and Ishares is really a very strong and preferred provider I want you to think about it this way the United States built the trillions and trillions of dollars ETF business with a national.

Martin Small: The United States built a trillions and trillions of dollars ETF business with a national best bid, best offer system, unified securities, regular regulator, national exchange. Europe has more fragmented markets and has been growing, growing, and growing. So we really see, obviously, regulation is trending favorable in Europe, the buying dynamics are very favorable, and iShares is in a great market leadership position there, we think, to post outsized growth.

Speaker Change: Best bed best off our system, our unified Securities regular regulator National Exchange Europe has more fragmented markets and has been growing growing and growing so we really see obviously regulation is trending favorable in Europe, the buying dynamics.

As Barry payroll and Ishares is in a great market leadership position, there, we think to post outsize growth.

Unknown Executive: Thank you. Ladies and gentlemen, we have reached the allotted time for questions. Mr. Fink, do you have any closing remarks?

Moderator: Thank you ladies and gentlemen, we have reached the allotted time for questions. Mr. Fink do you have any closing remarks.

Laurence Douglas Fink: Yes, Operator. One last comment. I want to thank everybody for joining us this morning and for your continued interest in BlackRock. Our performance is a direct result of our steadfast commitment to serving our clients and each and every client and evolving for the long term trends ahead of their needs. We started 2024 with great momentum. And I strongly believe that there are more opportunities ahead for BlackRock than at any time before. Thank you everyone, and have a great quarter.

Fink: Yes, operator, one last comment I want to thank everybody for joining us This morning and for your continued interest in Blackrock.

Larry Fink: Our performance is a direct result of our steadfast commitment to serving our clients and.

And each and every client and evolving for the long term trends ahead of their needs.

Larry Fink: We started 2024 with great momentum.

Speaker Change: And I strongly believe that there are more opportunities ahead for Blackrock more than any other time before thank you everyone and have a great quarter.

Unknown Executive: This concludes today's teleconference. You may now disconnect.

Speaker Change: Okay.

Speaker Change: This concludes today's teleconference. You may now disconnect.

Speaker Change:

Speaker Change: [music].