Q4 2024 BlackRock Inc Earnings Call
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Speaker Change: Thank you Mr. Meade you may begin your conference.
Speaker Change: Good morning, everyone I'm, Chris Meade, the general counsel of Blackrock.
Speaker Change: Before we begin I'd like to remind you that during the course of this call. We may make a number of forward looking statements.
Speaker Change: We call your attention to the fact that Blackrock actual results may of course differ from these statements.
Speaker Change: As you know Blackrock has filed reports with the SEC, which list some of the factors that may cause the results of Blackrock to differ materially from what we see today.
Speaker Change: Blackrock assumes no duty and does not undertake to update any forward looking statements.
Martin: So with that I'll turn it over to Martin.
Martin: Thanks, Chris Good morning, and happy new year to everyone. It's my pleasure to present results for the fourth quarter and full year 2024.
Speaker Change: 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.
Speaker Change: With over 600 billion in net new assets entrusted to Blackrock 'twenty 'twenty four was a milestone year of programmatic organic and inorganic actions rooted in client needs investment capability expansion technology and scale.
Speaker Change: We executed breakthrough investment offerings and industry, leading partnerships 2024 marked a quantum leap forward for Blackrock against our long term value creation objectives, and an invigoration of the future of asset management and technology services for our clients. We've spoken all year about how organic growth momentum and overall clients.
Speaker Change: Sentiment has been improving Blackrock saw record net inflows in 2024 powered by two back to back record flows quarters in the second half.
Speaker Change: Our annual revenue operating income and earnings per share each grew double digits, we made disciplined investments for profitable growth delivering 280 basis points of margin expansion as our AUM grew to a new high of nearly 11 six trillion.
Speaker Change: We enter 2025 from a position of strength, having generated 7% annualized organic base fee growth in the fourth quarter, our highest in three years.
Speaker Change: Our record client activity and the accelerating organic revenue growth. We saw in 2024, there are independent of the lift that we believe will come from G. I P. H P S and prequel.
Speaker Change: Our structural gross businesses Etfs, Aladdin outsourcing fixed income there the strong foundations to serve clients and deliver on our through the cycle, 5% organic growth objectives, we didn't need M&A to achieve and rise above our organic base fee growth target. Our expansions are about more deeply serving clients.
Speaker Change: And hydro segments that can exceed our 5% goals.
Speaker Change: We enter 2025 on a new trajectory with record AUM and operating income and having increased our effective fee rate by seven tenths of a basis point.
Speaker Change: Over the course of 2025, we'll be integrating and adding the high growth and earnings power of Gi P. H P. S. Infrequent clients have embraced our strategy our track record of successful acquisitions and integrations is bringing clients into deeper relationships with Blackrock.
Speaker Change: We finished 2024 with sequential quarters of at or above target organic growth more importantly that organic growth is broad based across institutional wealth and technology and across regions clients want to consolidate more of their portfolios with a partner that's with them for the long term they want portfolio.
Speaker Change: Or is that are seamlessly integrated across public and private markets. The dynamic and that are underpinned by data risk management and technology.
Speaker Change: Blackrock now truly in a category of one we have built a unique asset management and Fintech platform, that's integrated across public and private markets.
Speaker Change: With the close of the GIC transaction. This past October October and our planned acquisition of H P. S. Blackrock private markets and alternatives platform is expected to be 600 billion in client assets, a top five provider in over $3 billion in revenues or about 15% of 2024 revenues black.
Speaker Change: Blackrock houses whole portfolio solutions for clients the world's number one ETF franchise by asset flows and breath of exposures of three trillion fixed income platform across active and index 700 billion managed for insurance companies over 350 billion in models direct indexing in SMA as for wealth managers over $900.
Speaker Change: And cash management, AUM, leading advisory services, and our proven Aladdin technology with $1 6 billion in revenues Aladdin powering our whole portfolio ecosystem across public and private markets with E fronts, and our planned acquisition of frequent.
Speaker Change: On a pro forma basis for HTS infrequent private markets and technology are expected to make up over 20% of Blackrock overall revenue.
Speaker Change: That's an ecosystem, we feel wins with client needs and results in over 20% of our revenue base and long dated less market sensitive products and services. Our mix continues to evolve towards higher secular growth areas with clients. We believe this will translate to higher and more durable organic growth greater resilience through market cycles and multi.
Speaker Change: <unk> expansion.
In 2020 for Blackrock generated a record 641 billion of total net inflows and delivered 4% organic base fee growth we.
Speaker Change: We finished the year strong in the fourth quarter with 281 billion of total net inflows and 7% annualized organic base fee growth.
Speaker Change: Full year revenue of $20 4 billion was up 14% year over year operating income of $8 1 billion was up 23% and earnings per share of $43 61.
Speaker Change: Increased 15%.
Speaker Change: Fourth quarter revenue of $5 7 billion was 23% higher year over year, driven by the impact of higher markets on average AUM and higher performance fees.
Speaker Change: <unk> operating income of $2 3 billion was up 36% while earnings per share of $11 93.
Speaker Change: It was 23% higher versus a year ago.
Speaker Change: EPS also reflected a lower tax rate, partially offset by lower non operating income and a higher share count in the current quarter. The higher share count included $6 9 million shares issued and delivered at the closing of the GIC transaction.
Speaker Change: Non operating results for the quarter included $7 million of net investment losses, primarily due to changes in co investment valuations lower interest income in the current quarter reflected the delivery of cash at the closing of the GIC transaction, which was raised through our debt offering in March 2024.
Speaker Change: Our as adjusted tax rate for the fourth quarter was approximately 21% and benefited from discrete items. We currently estimate that 25% is a reasonable projected tax run rate for 2025, the actual effective tax rate may differ because of nonrecurring or discrete items or potential changes in tax legislation.
Speaker Change: Fourth quarter base fees and securities lending revenue of $4 4 billion was up 23% year over year and up 10% sequentially driven by the positive impact of market beta on average AUM organic base fee growth and approximately $230 million of base fees from GIC.
Speaker Change: Our annualized effective fee rate was approximately seven tenths of a basis point higher compared to the third quarter.
Speaker Change: Over time and with continued growth in infrastructure strategies and the successful closing of the HCS acquisition, we would expect to see positive leverage to base fee revenue average fee rates and organic growth as we grow private markets with clients. This is evidenced by this quarter's fee rate increase primarily reflecting the onboarding of higher fee rate private markets ASP.
Speaker Change: Following the closing.
Speaker Change: Fourth quarter, and full year performance fees of $451 million and $1 2 billion, respectively increase from a year ago led by higher revenue from alternatives. We saw strong broad based performance across hedge funds.
Speaker Change: Quarterly technology services revenue increased 13% year over year and full year revenue of $1 6 billion increased 8%, reflecting the successful onboarding of a number of new clients and expanding relationships with existing clients.
Speaker Change: Full year technology services revenue growth also reflects the prior year revenue impact of several clients renewals of a front on premises licenses.
Speaker Change: Annual contract value or <unk> increased 12% year over year on a constant currency basis, we estimate <unk> would have increased 13% from a year ago.
Speaker Change: The need for integrated risk analytics and whole portfolio views across public and private markets is driving strong demand for Aladdin, we signed some of our largest clients ever in 2024, we remain committed to low to mid teens ACB growth over the long term.
Speaker Change: Total expense increased 9% in 2024, primarily due to higher incentive compensation, G&A and sales asset and account expense.
Speaker Change: Full year employee compensation and benefit expense was up 11%, reflecting higher incentive compensation as a result of higher performance fees and operating income.
Speaker Change: Recall that year over year and sequential comparisons of fourth quarter compensation expense are less relevant because we finalize full year compensation in the fourth quarter.
Full year G&A expense was up 5% primarily from planned technology investments spend higher professional fees and Gi piece G&A expense <unk>.
Speaker Change: During the year, we made disciplined investments in business to drive operating leverage and profitable growth our fourth quarter as adjusted operating margin of 45, 5% increased 390 basis points year over year and our full year as adjusted operating margin of 44, 5% was up 280 basis points.
Speaker Change: Looking ahead, we aim to maintain our systematic approach to investing for profitable growth on the budgeting principles. We've consistently articulated for the last 12 months to 18 months will continue to be disciplined in prioritizing our hiring and overall investments with the ambition of delivering market, leading organic growth and operating margin.
At present subject to regulatory approvals and other customary closing conditions, we expect our planned acquisitions of <unk> and <unk> to close in the first quarter of 2025 and in mid 2025, respectively.
Speaker Change: Based on these closing timelines, we'd expect Blackrock head count to be higher in 2025, our planned acquisitions of <unk> and <unk> are expected to bring approximately 2300, new colleagues to Blackrock.
Speaker Change: Additionally, excluding <unk>, we would expect a mid to high single digit percentage increase in 2025 core G&A expense.
Speaker Change: Most of the core G&A expense growth should come from consolidating the G&A expense of Gi and frequent and continued investment in technology as we look to operate more efficiently and better serve our clients.
Speaker Change: Sure.
Speaker Change: Our capital management strategy remains consistent we invest first both organically and inorganically either to scale strategic growth initiatives or drive operational efficiency. We then return cash to our shareholders through a combination of dividends and share repurchases.
Speaker Change: After investing for growth, we returned over $4 7 billion to our shareholders through a combination of dividends and share repurchases. In 2024. This includes open market repurchases of approximately $375 million and $1 6 billion for fourth quarter and full year respectively.
Speaker Change: Share repurchases have been a consistent element of our capital management strategy in the last 10 years, we've repurchased 28 million shares at an average price of $510 per share today, we're trading at almost double that this represents a more than 15% annualized return for our shareholders for both the <unk> transactions.
Speaker Change: Blackrock equity proved valuable currency and consummating these transactions and structuring them for alignment with our shareholders.
Speaker Change: At present based on capital spending plans for the year and subject to market and other conditions, we're targeting the purchase of $1 5 billion of shares during 2025.
Speaker Change: In addition, and also subject to market and other conditions, we expect to seek board approval. Later this month for an increase to our first quarter 2025 dividend consistent with our track record of continued dividend growth.
Speaker Change: Record full year total net inflows of $641 billion were diversified across active index and cash as well as by region led by 385 billion of net inflows from clients in the United States.
Speaker Change: Blackrock generated industry, leading ETF net inflows of $390 billion in 2024, representing 11% organic asset and 7% organic base fee growth.
Speaker Change: Record annual net inflows into our Etfs included $41 billion into our digital assets Etp's that were just launched in 2020 for.
Speaker Change: Fourth quarter ETF net inflows of 143 billion reflected significant momentum into year end helped by seasonal portfolio Reallocations.
Speaker Change: As U S equity indices and spot bitcoin prices reached new highs in the quarter clients used ice shares products to re risk and add these investment exposures to their portfolios.
Speaker Change: Blackrock institutional platform generated net inflows of 74 billion in 2024 led by active net inflows of 64 billion, including the funding of several large outsourcing mandates from a variety of client types.
Speaker Change: Index net inflows of $9 billion were driven by $43 billion into fixed income. This was partially offset by 33 $31 billion of net redemptions from low fee index equity strategies.
Speaker Change: Several large clients, mostly outside the United States rebalanced their portfolios amid record equity market levels.
Speaker Change: Full year retail net inflows of 24 billion were led by continued strength in our <unk> and inflows into active fixed income mutual funds appear.
Speaker Change: <unk> had another record year in 2024 with net inflows of $14 billion in active fixed income added $12 billion of net inflows.
Demand for private markets remained strong with 9 billion of net inflows during the year driven by infrastructure and private credit.
Speaker Change: <unk> full year net inflows also included the impact of successful realizations of 13 billion, primarily from private equity private credit and infrastructure strategies.
Speaker Change: Distributions are a key metric for measuring performance in the private markets <unk> has a strong track record of operating portfolio companies and ultimately returning capital to investors through exits with strong uplift at present, we expect to recognize approximately $5 billion of realizations in the first quarter from older GIC Fund vintages executing.
Speaker Change: Successful exits star.
Speaker Change: Starting this quarter, we've updated our earnings supplement to provide additional transparency into organic growth drivers in realizations activity for our private market assets, we expect to make disclosure enhancements, particularly around private markets beginning in the first quarter of 2025.
Speaker Change: Finally, Blackrock cash management saw 81 billion of net inflows in the fourth quarter and $153 billion. In 2024 flows were driven by both U S government and international Prime funds and included multiple large new client mandates. We continued to see strong growth in our cash and liquidity platform built on our scale and integrated off.
Speaker Change: <unk> with AUM up 20% year over year.
Speaker Change: Blackrock platform delivered record results in 2024, and the consistency of our results stands out even more over the long term with over two trillion of client net inflows over the last five years, while 2024 was a watershed year for Blackrock. It's just the start of our next growth story, we're better positioned than ever to build with class.
Speaker Change: Vince and create value for our shareholders Blackrock some meaningful outperformer when assets are in motion and investors are re risking we're optimistic about market opportunities for our clients into 2025.
Larry: I'm going to pass to Larry in a minute, but for those of you keeping score at home. This is Larry is 100 earnings call. We did a little research and counted only 15 current Ceos in the S&P 500 that have <unk>.
Speaker Change: Celebrated 100 earnings calls as the CEO, Larry Congratulations on a century of earnings calls as the field.
Larry: I can't say I fill any older.
Speaker Change: I can't complain at all it's been a fun journey.
Larry: I think the journey going forward is it going to be better.
Larry: There's a lot of change in the world in the last 25 years.
Larry: Although a lot.
Larry: <unk> is the same.
Larry: <unk>.
Larry: My meal the night before earnings remains the same at a bowl of cereal last night with blueberry, So I guess.
Larry: I guess everything is the same but thank you Martin.
Larry: And also happy new year to everybody.
Speaker Change: And thank you for joining the call and yes. It is there are hundreds.
Larry: We haven't done it alone.
We have a number of shareholders that have been with us since the IPO of 25 years ago, I remember that regional roadshow when we.
Larry: Tried to convince.
Larry: Many of our shareholders remain today are about the opportunities to invest in Blackrock.
Speaker Change: And we're also grateful for the analyst community and helping the markets understand our business I think two of our equity analysts on the line with us with the IPO. So I want to thank thanks to Bill Katz, and Brian Bodell greater coverage over all these years in.
Larry: And the best is still in front of us.
Speaker Change: When we IPO Ed.
Speaker Change: We were a company of 650 employees and we manage $165 billion in assets.
Speaker Change: That same year, we began selling our Aladdin technology to our clients for the first time.
Speaker Change: Today clients Trust us with nearly 11 six trillion dollars of AUM.
Speaker Change: And Aladdin has more than 130000 users.
Speaker Change: Since our IPO, we've delivered an annualized total return for our shareholders about 21%.
Speaker Change: Compared to about 8% for the S&P 500.
Speaker Change: And as I said this is just the beginning.
Speaker Change: As Martin said 2024 was a milestone year for Blackrock.
Speaker Change: Clients entrusted us with a record $641 billion of net inflows, including $281 billion in the fourth quarter.
Speaker Change: We now had two consecutive record flow quarters.
Speaker Change: We entered 2025 at our strongest inflection point.
Speaker Change: We added one five trillion of AUM delivered record revenues and record operating income and increased our effective fee rate by 5%.
Speaker Change: Historic client activity took place as we executed on the most significant acquisitions, we've done since pgi over 15 years ago.
Speaker Change: It's not uncommon for companies to see clients pausing.
Speaker Change: As they wait out the M&A results as a determinant as determined whether blackrock is focusing on their needs.
Speaker Change: At Blackrock clients are instead, embracing and rewarding our strategy.
Speaker Change: Clients activity accelerated into the fourth quarter, resulting in a 7% organic base fee growth and 12% technology services HCV growth.
Speaker Change: Our operating model delivered exceptional performance in a year of meaningful change.
Speaker Change: We crossed the $20 billion of annual revenues up 14% from our 2023.
Speaker Change: Adjusted operating income grew by 23%.
Speaker Change: And our industry margins of $44 five was up 280 basis points.
We always raise the bar for ourselves.
Speaker Change: No our clients and shareholders do the same.
Speaker Change: Our results consistently beat even our high expectations and we surpassed street estimates are for flows.
Speaker Change: Rate base rate in addition to total revenues margins and EPS.
Speaker Change: Our record organic growth and financial results do not yet reflect the full integration our pending acquisitions of G IP Hps and <unk>.
Speaker Change: All three of these businesses have a track record of delivering strong revenue growth profitability and margin expansion.
We are steadily making organic investments ahead of the structural trends that we believe will drive outsized growth in the years ahead.
Speaker Change: We've had strong momentum across our entire franchise <unk>.
Speaker Change: Including our newly enhanced private market platform.
Speaker Change: We positioned ahead of market opportunities that we believe will drive outsized growth for Blackrock in the years to come we invested in our talent, which is fundamentally the most important thing that we invested each and every year.
Speaker Change: Our key driver.
Speaker Change: Blackrock success has been our focus on developing leaders with a broad range of experiences and connectivity across all of Blackrock.
Speaker Change: What I've called horizontal leadership.
Speaker Change: We look to identify people ready for the next challenge and then move them into roles at both advance their professional journeys and drive our business forward.
Speaker Change: Today, we are excited to announce that many leaders across the firm are taking a new and expanded roles and responsibilities that will help drive our next phase of growth.
Speaker Change: Part of our leadership changes reflect that Mark wiedman desire to pursue his next chapter after nearly 20 years with Blackrock.
Speaker Change: We've discussed this transition over a number of months.
Speaker Change: And he will be with us through spring and I wanted to take a moment to recognize and thank mark.
Speaker Change: Mark is a great friend of mine great friend of the firm and has helped drive strong growth for Blackrock for our clients and for our shareholders.
Speaker Change: He has also built a powerful team of leaders prepared to take on new responsibilities and drive our business forward. This includes a number of the senior leaders taking on expanded roles.
Speaker Change: Mark will work with our leadership team over the next few months to ensure a smooth transition we thank him for his many contributions his partnership and his vision and shaping the successful evolution of Blackrock.
Speaker Change: Rob and I are proud of the deep leadership team at Blackrock.
Speaker Change: Reflects a breadth of experience and sustained excellence.
Speaker Change: Strategic acquisitions are also historically strike dollar firm strengthen our culture, and bringing top talent, new skills and experience into our organization.
Speaker Change: Our culture has consistently evolved as we welcome new teams and colleagues to Blackrock and today. It represents a blending of the best parts of the cultures that have come together across the years across all of the firms that became part of Blackrock.
Speaker Change: Few months ago, we welcomed the influx of talent with the close of Gi P. We've already enjoyed great connectivity and our teams are energized Blackrock World class leadership, alongside the top talent from Gi P from Hps and frequent position us to serve our clients with excellence and seizing the opportunities.
Speaker Change: Head for us.
Speaker Change: In my conversations with clients around the world. They are eager to put capital work and they want to do it through Blackrock.
Speaker Change: Public market center enter the year from a position of strength clients holding cash on the sidelines missed out on a 25% of total return and equities last year.
Speaker Change: We expect 2025 to be a dynamic investing environment as policies and economic questions play out the most important factor will be the growth backdrop.
Speaker Change: Mega forces like AI and ongoing evolution of the debt financing and the low carbon transition are transforming economies with a low <unk> long term growth trajectories.
Speaker Change: Capital markets will play a key role in this transformation.
Speaker Change: Private market assets are alright, increasingly vital part of capital markets and blending both public and private markets will be critical to fully capturing growth opportunities.
Long held investing principles need to evolve, including the traditional 60 40 portfolio mix of stock and bonds. The diversified nature of the stock and bond relationship is under increasingly strong pressure, making resilient portfolio construction more critical than ever.
Speaker Change: They are coming to Blackrock for advice on how to build portfolios how to broaden out where they invest.
Speaker Change: For many they will increasingly include private markets, especially private credit and infrastructure. We also think active strategies can provide an advantage in an environment that requires a more dynamic approach.
Speaker Change: Blackrock is well positioned to capitalize on structural growth opportunities against the backdrop of economic and capital market evolution.
Speaker Change: We've made coordinated investments to build the premier long term capital partner and technology provider across public and private markets.
Speaker Change: 2025 is a new launch point for significant growth for Blackrock, our clients and our shareholders.
Our recent acquisition of <unk>, the planned acquisitions of frequent at Hbf each position our platform ahead of evolving our client needs and structural industry trends.
Speaker Change: 15 years ago, we acquired Pgi, and where the first scale provider to integrate both active and index investments.
Speaker Change: In 2024, we made bold moves to connect public and private markets through portfolio management and technology.
Speaker Change: The reaction to our recent announcement to acquire <unk> has been extremely positive and we see great opportunities to partner more closely with clients and borrowers.
Speaker Change: Capabilities were adding through these these transactions allow us to serve clients, even more comprehensively and position us to raise significant private capital.
Speaker Change: For our shareholders. We believe the increased contribution from private markets and technology will drive higher and more resilient organic growth differentiating financial performance and multiple re rating.
Speaker Change: In addition to private markets, we are executing on the strongest opportunity set we've seen across multiple growth engines.
Speaker Change: These include technology, Etfs multi asset solutions like outsourcing models.
Speaker Change: We invested four years to develop leading franchises and capabilities that our clients need most and that our long term growth channels.
Speaker Change: Importantly, they are scaled and integrated onto one platform with a culture that is client led not product led.
Speaker Change: We're able to serve our clients in a way that no other asset manager can.
Speaker Change: A lot of it has always been the operating system uniting all of Blackrock.
Speaker Change: It's grown and evolved as Blackrock has is the industry's most comprehensive operating system supporting scale and commercial priorities for clients.
Speaker Change: We're growing our capability set and Aladdin all with the aim of serving our clients through sophisticated risk management.
Speaker Change: Scaled portfolio analytics across both public and private markets and soon private market data through frequent.
Speaker Change: Fourth quarter ACB growth of 12% reflects several significant mandates with large financial and corporate partners.
Speaker Change: The Aladdin technology stack is resonating with over half the Aladdin sales involving multiple products. This includes clients using Aladdin whole portfolio view, which grew out of our acquisition of <unk> front to seamlessly manage portfolios across public and private asset classes on one platform. It includes clients leveraging enterprise.
Speaker Change: And alongside Aladdin, it accounting or the Aladdin data cloud.
Speaker Change: Technology is at the foundation of Blackrock.
Speaker Change: Etfs are another example, we ETF, we view Etfs as a technology that facilitates investments since our acquisition of Ishares Blackrock has led and expanding the market for Etfs.
Speaker Change: Even more accessible and by delivering new asset classes like bonds or crypto and investment strategies like active.
Speaker Change: Approximately a quarter or $390 billion of ETF net inflows were into products launched in the last five years.
Speaker Change: Our active Etfs delivered $22 billion of net inflows in 2024, while our bitcoin ETP was the largest ETF launched in history growing to over $50 billion.
Speaker Change: AUM in less than a year and it was the third highest asset gathering ETF in the entire ETF industry behind only the S&P 500 index funds.
Speaker Change: <unk> as a product and portfolio level and accelerating our distribution capabilities to deliver a differentiated investment solutions.
Speaker Change: In Europe, we scaled our ETF offering significantly and the market is still much more nascent than it is in the U S.
Speaker Change: We are seeing double digit organic growth in each of the last two years, including over $90 billion and growth in net inflows in 2024.
Speaker Change: Our European ETF platform is nearing one trillion dollars of assets, which is larger than the next five issuers combined.
Speaker Change: Much of this growth is powered by individual investors as online banking platforms digital first offerings and ETF saving plans are enabling more first time investors to invest in their savings.
Speaker Change: Dart and beginning their retirement savings and to build a better and more robust future for themselves from first time individual investors to the most sophisticated institutions Etfs are connecting investors to the growth of the capital markets around the world.
Speaker Change: Clients' needs are driving industry consolidation and investors increasingly prefer to work with Blackrock as a scaled multi asset provider.
Speaker Change: We see this in the wealth channels, where manage model portfolios are the main way in which wealth managers are looking to scale their practices and better serve their clients Blackrock has as a leading models business backed by our multi asset multi product capabilities across both etfs and active strategies.
Speaker Change: We see this in our relationship with the largest asset owners are pension funds and corporates and these clients seek to deepen our their ties with Blackrock.
Speaker Change: Many of these corporate partners see positive network effects to their core business and to their own shareholders by extending their relationship with Blackrock.
Speaker Change: This year, our clients entrusted us with more than $120 billion of scaled outsourcing mandates.
Speaker Change: Many of these outsourced portfolios or from pension plans and retirement schemes that we're investing on behalf of millions of workers to help them save for their future.
Speaker Change: Our life path target date franchise now manages more than a half a trillion dollars of assets and are extending our work in this important area to help more and more people save for retirement.
Speaker Change: In 2024, we launched your Lightpath paycheck, offering which pairs to a traditional 401K plan with the option to purchase an annuity based income stream as a worker approaches retirement.
The solution is the fastest growing lifetime.
Speaker Change: Income target date strategy and the defined contribution market with $16 billion invested at year end.
We also adopted Lightpath paycheck is part of our U S retirement savings plan for employees here at Blackrock.
Speaker Change: I think we've become the default defined contribution offering for the entire industry.
Speaker Change: And we're exploring opportunities expand lightpath paycheck.
Speaker Change: Two more partners in workers throughout the world.
Speaker Change: We have built our platform around a core strategy of connecting investors to the long term growth of the capital markets and my conversations with clients and government leaders around the world. There's been great focus on the strong capital markets. We have in the United States countries want to further develop their own robust capital markets and this drives investment in their own.
Speaker Change: Local economies, which in turn provides opportunity for job growth wealth creation for their for.
Speaker Change: For their own citizens.
Speaker Change: Over the last few years Blackrock has partnered with governments and sovereign wealth funds to help deepen their local capital markets.
Speaker Change: These are tremendous opportunities in India, where digital infrastructure efforts are facilitating widespread access to digital payments and financial products.
Speaker Change: Joint venture Geo Blackrock is expected to launch later this year subject to regulatory approvals.
Speaker Change: We're combining our investment expertise with a local market knowledge of our partner Geo financial services to large digital first assets with wealth management businesses.
Speaker Change: In Saudi Arabia, or we're launching an investment management platform the partner, where the public investment fund.
Speaker Change: To drive investments in future growth in the local economy, and we're investing in layering the foundation today for opportunities that we believe will result in significant.
Speaker Change: AUM over the next five to 10 years.
Speaker Change: We've had great success with our large asset owners and collaborations already including our joint venture de Carbonization partners with Tomasic.
Speaker Change: Our recent AI partnership with Microsoft and <unk>, which aims to mobilize data centers and infrastructure investments. These global partnerships are only available to Blackrock because of the deep relationships. We built over many years with local partners heads of states and sophisticated asset owners.
Speaker Change: I have spent a lot of time on the road last year as as Rob and other members of our leadership team.
Speaker Change: And I have also tried to see clients together in recent months, we're spending time with our institutional clients or wealth clients and increasingly with our largest asset owners in the world.
Speaker Change: Clients corporates, and sovereigns or looking to assemble deeply intertwined partnerships not just the set it and forget it investments that yield a good return.
Speaker Change: Blackrock is in a class of its own and being able to partner with clients comprehensively and then integrated scaled way.
Speaker Change: We can build with clients across our entire portfolio and across the investment lifecycle from Etfs to high performing active in private markets to technology and data through Aladdin E front and eventually frequent.
Speaker Change: The strength of our platform and the commitment of our employees and serving our clients powered record results for our shareholders in 2024.
Speaker Change: And that was before significant growth unlocked from our strategic acquisitions and organic investments in high growth markets around the world.
Speaker Change: 2024 was just the beginning Blackrock midyear 2025, with more growth and upside potential than ever.
Speaker Change: Operator, let's open it up for questions.
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.
Speaker Change: You do ask a question. Please take your phone off its speaker setting and use your handset to avoid any potential feedback.
Speaker Change: Please limit yourself to one question.
Speaker Change: I have a follow up please reenter the queue.
Speaker Change: We'll pause for just a moment to compile the Q&A roster.
Speaker Change: Your first question comes from Alex Blaustein with Goldman Sachs.
Alex Blaustein: Hey, good morning, everybody happy new year.
Alex Blaustein: I wanted to start with a discussion on money motion, that's something we talked about last year as well as you think about 2025 and taking into account maybe the rates move we had recently.
Alex Blaustein: To what extent does that change the backdrop are you seeing in the marketplace today and when it comes to more and more money in motion what asset classes do you guys expect to benefit most in 2025.
Alex Blaustein: Thanks, Alex happy new year listen it all starts with clients.
Alex Blaustein: Back to back quarters of above or at target organic base fee growth, 5% in Q3 now 7% in Q4, it's definitely putting the lift we want in the trailing 12 month trend.
Alex Blaustein: For our long term through the cycle target full year organic base fee growth was 4% and so we're really entering 2025 with continued momentum in a real position of strength.
Alex Blaustein: Larry talked a bit about continued etfs exceptionalism very strong contribution to the 7% organic base fee growth in Q4 rounded out by private markets and alternatives fixed income and cash.
Alex Blaustein: Even in Etfs like higher fee rates segments like active ETF scattered over $20 billion in new assets digital assets Etfs are driving higher organic base fee growth, we see those trends continuing into 2025 I would note that <unk> organic growth contributed to about one half of a percentage point to the overall, 7%.
They see growth. So it didn't have an outsized impact on this quarters above target outcome I do think it's a good indication that a growing infrastructure business a growing private markets business can support obviously above above trend above target long term targets, but looking into 'twenty five we built the business around structural growers.
Etfs models, Aladdin fixed income target date funds, they all drive sustainable organic base fee growth through market cycles and in positive markets are lived experience has been that these areas capture substantial upside generate substantial earnings just like they did here in 2024, which where we hit records.
Alex Blaustein: Looking into 'twenty five we continue to see strength in structural growers, a bigger private markets business and Blackrock as a meaningful outperforming performer and re risking periods going back to previous election cycles or periods of Central Bank action, Alex We had outsized upside capture look at $17 $18 21.
Alex Blaustein: We were well above 5%.
Alex Blaustein: In those cycle targets and I would offer that I think we're even better diversified now even with higher for longer rates, we see short duration active fixed income yield strategies like our active ETF managed by Rick Reader Bank sees the ticker and our cash management platform as growth engines, and I think that recent macro <unk>.
Alex Blaustein: <unk> are also going to lead to some interesting opportunities in secondaries and private credit in a more supportive market. We've achieved our organic base fee growth target of 5% on average over the last five years, we had 5% in Q3, 7% in Q4, we did it without the benefit of M&A. So we believe that <unk> can help <unk>.
Alex Blaustein: Our business beyond those targets.
Alex Blaustein: Gives us a lot of conviction about our 5% or better gold going forward. Alex. So we look forward to updating everybody on progress.
Alex Blaustein: So let me just talk about the rate.
Alex Blaustein: The rate market.
Alex Blaustein: We've been living in a world of the inverted yield curve.
And then you had the ability to earn the highest return to keeping your money and cash that you missed out on some great equity market movements.
Alex Blaustein: But as you noticed the yield curve steepening.
Alex Blaustein: And so youre going to over the time, you're going to be you're going to be benefiting by going out the curve.
Alex Blaustein: That being said there is.
Alex Blaustein: It was close to 10 trillion dollars of money in money market funds.
Alex Blaustein: Is that money will be put to work.
And as I said with the Steepening of the yield curve.
Alex Blaustein: And with higher rates.
Alex Blaustein: Going to lead to some great opportunities in the fixed income area.
Alex Blaustein: As Martin just said I think more and more income oriented products like private credit and infrastructure are going to play a larger role with our investors.
Alex Blaustein: Over the course of the next five to 10 years and if.
Alex Blaustein: We can't underestimate the role of the capital markets that is going to be developed.
Alex Blaustein: Robustly, even in Europe, and other parts of the World, where there is going to present, even better opportunities there.
Alex Blaustein: No place like the United States.
Alex Blaustein: The U S exceptionalism.
Alex Blaustein: If you're a small startup medium company.
Alex Blaustein: That you have access to so much capital that.
Alex Blaustein: That is one of the principal drivers of the U S economy, and I do believe that as well.
Alex Blaustein: Hope to be replicated in other economies right now and that development, having a strong banking system with a strong capital market system really plays well into our future growth.
Craig Siegenthaler: Your next question comes from Craig Siegenthaler with Bank of America.
Alex Blaustein: Okay.
Craig Siegenthaler: Hey, good morning, Larry Martin.
Alex Blaustein: Happy New year, Larry Hope everyone's doing well.
Alex Blaustein: My question's on retirement, so Blackrock is the largest D C. I O manager and one of the largest managers of AUM and foreign K plans and target date funds and currently these strategies have a zero percent allocation to alts, but the red sweep in November has many of US debating if also break into retirement channels.
Alex Blaustein: Especially given your recent acquisitions have Gi ph PFS I don't know if any firm is better positioned for this seems so we wanted to get your updated prospects on Oct. Finally break into the U S retirement channel.
Craig Siegenthaler: Thanks, Craig a happy new year I'll give it a go and then see.
Craig Siegenthaler: If Larry has anything to add but listen we think of ourselves as a retirement company more than half of the 11 six trillion of assets that Blackrock manages are related to retirement, we've been at the forefront I think of product innovation, we have been at the forefront of advocacy for retirement solutions through our whole history.
Craig Siegenthaler: It was in fact Barclays global investors that pioneered the first target date funds back in 1993. It was a revolutionary concept, eliminating I think some of the guesswork for retirement savers by automatically adjusting their investment mix overtime.
Speaker Change: We know today as you mentioned have over a half a trillion of assets and Lightpath and target date funds, where the number one <unk> provider as Larry went through in detail. We've been innovating. The target date structure to include guaranteed income with Lightpath paycheck, So we see real potential benefits.
Speaker Change: Retirees could have with greater diversification better retirement outcomes by blending public and private I mean people have one Nobel Prize is talking about the market portfolio. It wasn't just about public markets. It's also about private markets and so we've been doing work. We've been doing work, we're always doing work on product innovation and we've been thinking about how to bring private markets.
Speaker Change: Potentially into target date structures.
Speaker Change: We think the same innovations that powered lightpath paycheck could ultimately power target date structure with private markets and alternatives as part of the glide path. We'd also think about things like managed accounts that models, where we've been working on including public private models as we announced with the partners group model portfolios, which we think can make there.
Speaker Change: Way into retirement accounts as well and so we do think this is a real opportunity with our leading presence in these channels. We've got the relationships the distribution the investment expertise to capitalize on these opportunities to create better retirement outcomes. We do think we're watching the space closely for.
More tangible opportunities, we do think there'll have to be some reforms potentially safe harbors litigation or advice reform in the U S to add private markets to DC plans. So we're watching the space closely keeping in touch with the trade associations, we're doing a lot of work and keeping connected with Washington, but for years, we've tried to innovate with <unk>.
Speaker Change: Advocated on behalf of workers to improve retirement solutions, we think theres, a real opportunity here and if there is an opportunity to bring private markets to the retirement channel.
Speaker Change: We'll aim to be at the forefront Craig Craig Let me add one more point that I think is essential.
Speaker Change: And that is.
Speaker Change: Having better analytics and data.
Speaker Change: That will be fueling.
Speaker Change: Think regulatory.
Speaker Change: Opportunities to expand offerings in this space as you know.
Speaker Change: The retirement of the system is heavily related with a lot of regulation fiduciary standard is very high.
Speaker Change: And so as a result of that.
Speaker Change: The need for better market analytics and data are essential and this is one of the primary reasons why we sought out and acquired frequent.
Speaker Change: Having the analytics.
Speaker Change: So we have with the front end of Aladdin.
Speaker Change: And the data that we will have will allow the entire market.
Speaker Change: That have access to better information.
Speaker Change: And it is.
Speaker Change: And we believe more and more asset managers will then take on.
Speaker Change: Aladdin.
Speaker Change: With prequel data and a front to help them navigate this and so to me.
Speaker Change: Dovetailing relaxed regulatory.
Speaker Change: Of oversight.
Speaker Change: Can only happen if we have better.
Systematic analytics and data to work with the investors under ERISA laws and I think this is essential and this is one of the key reasons why we made the acquisition of <unk>.
Speaker Change: Your next question comes from Michael Cyprus with Morgan Stanley.
Michael Cyprus: Hey, good morning, happy new year.
Speaker Change: It's been a failure.
Speaker Change: It's been a little bit over a month since you announced the <unk> acquisition just curious here in terms of the conversations you're having with clients how that dialogue has evolved given the expanded private credit capabilities that you have I believe insurance and private wealth, where some of that.
Speaker Change: He is that you are most excited about just curious what steps you might take to best maximize that opportunity here as you're thinking about 25, what sort of growth might this translated to an end, which are the opportunities do you see as more near term versus more medium to longer term.
Speaker Change: Well, obviously, we need to close and we expect to close some time in the <unk>.
Speaker Change: Second quarter that would be our objective.
Speaker Change: And we're very excited about the client feedback related to HTS.
Speaker Change: It has been extraordinarily positive across all the channels.
Speaker Change: <unk>.
Speaker Change: Hasnt credible relationships with clients worldwide that dovetails with our relationships across all the insurance companies.
Speaker Change: And so I do believe insurance will be one of the primary areas of growth.
Speaker Change: For us.
Speaker Change: But as we were talking about earlier, if we could really expand in the wealth channels.
Speaker Change: Aps right now has about $20 billion in.
Speaker Change: Wealth channels already and we believe with the Blackrock connectivity with all of the wealth management organizations that we have an opportunity to really increase that that size by dramatic about.
Speaker Change: And our conversations that we've had globally worldwide from Japan.
Speaker Change: To the middle East.
Speaker Change: And throughout Europe, probably one of the great surprises to me was the conversations we're having about expanding private private credit as a part of these portfolios.
Speaker Change: And as I said earlier when we.
Speaker Change: We did not do the Hps acquisition.
Speaker Change: As a singular.
Speaker Change: Expansion you have to overlay the design around buying pre quit and having a front and bringing that together and having the ability to provide better data and analytics to these markets and that will then provide much more expansion of the market and.
Speaker Change: We've seen that over the last 40 odd years, we've been in business and throughout my career, when you have better data and analytics as youre expanding new frontier markets.
Speaker Change: They become large scale markets through data and analytics and so we believe we will be the best suited organization to take advantage of that expansion.
Speaker Change: Of.
Speaker Change: The private credit markets in the future.
Mike Brown: Your next question comes from Mike Brown with Wells Fargo.
Okay.
Mike Brown: Great Good morning, happy new year.
Mike Brown: Happy new year.
Mike Brown: I wanted to follow up on the expense guidance for the year. So thank you for the core G&A guide.
Mike Brown: I guess as we think about the contribution.
Mike Brown: Contribution from H P S.
Mike Brown: Assuming that debt.
Mike Brown: Mid 2025 close.
Mike Brown: Should we think about kind of the guide.
Mike Brown: Including that and then as you think about the margin I appreciate that markets and FX are really going to impact the outcome, but could you just give us some thoughts on maybe the puts and takes.
Mike Brown: Should consider for the margin and 25% relative to 24.
Mike Brown: Sure. Thanks for the question. So let me just put some context around it I think our approach to shareholder value creations to generate consistently market, leading organic growth, it's to drive operating leverage and industry, leading margins and to execute on our consistent capital management strategy, we have a strong track record of investing in our.
Mike Brown: Business for growth and scale, while expanding capability, it's not just about growth it's about profitable growth over the long term our growth comes from being disciplined in making in managing continued investments in the business. We're keeping the rules based budgeting principles that I have outlined over the last 12 to 18 months that sizing our operating investments in line with the <unk>.
Mike Brown: Prudent lens on organic growth potential is aiming to put flexibility in our cost base and variable lies in more expenses, where we can and most importantly, it's looking to generate fixed cost scale, especially through investments in technology.
Mike Brown: Got eight.
Mike Brown: Think consistent track record in delivering industry, leading margins and improving them I think you see in 2024 those scale indicators came through in the results. We grew operating income by over 20% generated close to three percentage points of margin improvement versus 'twenty. Three we improved margin by 390 basis points year on year in Q.
Mike Brown: Four while operating income was up 30% and since the end of 2022 or more rope metric as you know Blackrock AUM is up three trillion, while head count is up by a more modest one.
Mike Brown: <unk> thousand 300 employees about 7% head count growth. So we really see ourselves as continuing on that strategy of driving scale and productivity, which shows up in margin expansion on the outlook for 'twenty five.
Mike Brown: The guidance is mid to high single digits, excluding <unk> as I mentioned in terms of the major influences, we think our budgeting approach and a positive market environment should drop more profitability into operating income market movements are our highest margin item, Mike both on the way up and on.
Mike Brown: The way down.
Mike Brown: We see the conditions for reasonably positive growth in markets over the near to intermediate term. So we believe we can continue to invest to accelerate growth and deliver margin expansion through this rules based budgeting that I've outlined and we expect that the impact of positive markets on our AUM and revenue through this budgeting approach would drive further margin expansion into 2025.
Mike Brown: Okay.
We'll go next to Ken Worthington of JP Morgan.
Ken Worthington: Hey, good morning, happy New year, and thank you for taking my question I wanted to piggyback a little bit on Alex's question. What are your thoughts on the outlook for fixed income flows as we look out to the next 12 months I guess, maybe starting where do you see investors positioned in fixed income as we begin 2025.
Ken Worthington: And do you get the sense generally that investors are under or over allocated to fixed income broadly and how do you see those allocations evolving this year I think.
Ken Worthington: Excessively made the case that the allocation.
Ken Worthington: Also be increasing you've made the case for a while that the allocations to cash are probably too high how do we think about this sort of flowing into fixed income allocations for.
Ken Worthington: For the next 12 months.
Ken Worthington: So I'll take that one last time I mentioned I thought it would rain fixed income.
Ken Worthington: Ill continue that for 2025, but I won't go as far as a Nobel Prize Martin.
Ken Worthington: Tim.
But a more balanced term structure of interest rates as an indicator that we're going to watch.
To indicate the potential demand for intermediate and longer duration fixed income and you know this has been negative for years and now the U S term premium has reached its highest level in a decade now we see that people are under allocated to fixed.
Ken Worthington: Income and we see that through our models business.
Ken Worthington: And we see that they are looking to increase their weightings in longer duration fixed income and whether there's a bull markets deeper steeped in or a bear market steep there I do believe some of that large allocation that cash that Larry mentioned being around 10.
Ken Worthington: Trillion is going to look for opportunities to increase their income and what countries around the globe at deficits. There is going to be a lot of issuance and you'll see the premium over treasuries be significant enough to move that money.
Ken Worthington: From cash into intermediate and longer term duration fixed income.
Ken Worthington: So last year, we saw a strong demand our fixed income flows were 164 billion in 2024.
Ken Worthington: Driven 6% organic asset growth and that included $24 billion in the fourth quarter alone.
Ken Worthington: Now one of the other reasons for this demand is better wrappers to express.
Ken Worthington: Our interest in fixed income so we saw a demand that crossed ishares.
Ken Worthington: Non ETF index and active fixed income and active fixed income continue to include scaled institutional assignments as well not just retail and this came primarily from insurance partners.
Ken Worthington: So I think spread income presents a great opportunity, even if duration is not as reliable a diversified as it used to be and we see a lot of clients that want to flip solid yields at the front end of the curve and now we expect that to continue into the longer end of the curve.
Ken Worthington: So.
Ken Worthington: The other part is the run up in equities last year.
Ken Worthington: Actually over made them over allocated to equities, so they need to catch up.
Ken Worthington: In fixed income so I think it continues to roll into cash.
Ken Worthington: And then cash as rates change.
Ken Worthington: Move into intermediate and longer duration fixed income paper and that will not only be in the public markets, but it will be in the private markets as well which describes.
Part of the acquisition, you are asking Larry and Mark Nevada.
Ken Worthington: Yeah.
Speaker Change: Your next question comes from Brian Bedell with Deutsche Bank.
Brian Bedell: Great. Thanks, Hey, good morning, guys.
Speaker Change: In New York.
Brian Bedell: Hey, guys.
Brian Bedell: Yeah no. Thanks.
Brian Bedell: I was just thinking if I certainly couldn't imagine you've become what you've become.
Brian Bedell: Sitting back in 1999.
Brian Bedell: A leading fixed income manager at the time I always knew this strategy was great but.
But.
Brian Bedell: Firm is certainly involve evolve I think.
Brian Bedell: Well beyond anyone's expectations so.
Brian Bedell: Grafts on that journey.
Brian Bedell: So have you turned 35 yet.
Brian Bedell: Go ahead.
Brian Bedell: It's been a long time for sure.
Brian Bedell:
Brian Bedell: Yeah.
Brian Bedell: Maybe just thinking about this evolution.
Brian Bedell: <unk>.
Brian Bedell: <unk> of the strategy and in alternatives and in particularly the retail end of that so.
Brian Bedell: Maybe just talk a little bit about your confidence you're.
Brian Bedell: Clearly you have a lot of ways to too.
Brian Bedell: To go into the into retail on the oxide, but youre confidence on that building because it's obviously theres still a lot of roadblocks into growth in those channels and I know you talked about the 401Key channel earlier.
Brian Bedell: Maybe within that answer you can comment on your view of the likelihood of safe.
Brian Bedell: Safe Harbor provisioning in the 401K market.
Brian Bedell: And the demand from 401k plan sponsors to actually adopt all.
Brian Bedell: Within their portfolio. This is clearly would obviously benefit.
Brian Bedell: The plan participants that substantially so just I guess overall just your confidence on the retail market for all building.
Brian Bedell: In in even in 'twenty, five and its 26 for you including potentially for them okay.
Brian Bedell: Thanks, so much so we know.
Brian Bedell: This is one of the.
Speaker Change: I'm most fund one of the businesses are most fond of here at Blackrock.
Speaker Change: We have strong relationships and wealth and retail markets across the globe as Larry mentioned in his remarks, our aims to health wealth managers build long term portfolios that blend public and private markets exposures. The market's still early as you said wealth manager in retail allocations to private markets still in the low single digits on most of the surge.
Speaker Change: Truly dinner data.
Speaker Change: We are focused on innovating to provide better access to private markets for wealth managers and retail investors and thats across taxable and non taxable accounts retirement accounts.
Speaker Change: Let me tell you about a couple of things we're working on and what I think are some of the bigger opportunities as we had previously announced we're working on a first of its kind managed model solution with the partners group.
Speaker Change: This will simplify wealth access offering a single subscription model product with varied allocations based on risk tolerance, but moving the private market. Since you are model portfolio with different risk tolerances that blends public private that manages the cash flows. That's honest single subscription document we think that's a huge unlock one of the.
Speaker Change: Barry is to adoption with wealth managers is just the operational burden and tax of managing multiple subscription documents and cash flows and distributions for private markets products. We think a managed account can do that better and increase access.
Speaker Change: In Europe and Asia those markets are in a different place in the United States. When it comes to private markets in retirement accounts, we recently launched our new Evergreen fund offerings under the <unk> structure those.
Speaker Change: Those initial offerings are in private equity solutions and multi alternatives. Those evergreen funds were planning to also have infrastructure and private credit offerings into the future. We're looking at bringing similar structures in terms of evergreen.
Speaker Change: Evergreen products for the United States as well the planned acquisition of <unk> is going to bring real scale and expertise in the wealth channel for us, including more than $20 billion of wealth focused assets in <unk> one of the high performing bdcs in the market, we think theres a great opportunity to continue to scale that in the channels where <unk>.
Speaker Change: <unk> is but also bring that to the RA market, where Blackrock has a particularly large footprint. We have really excellent momentum in many of the strategies that we have and be debt or non traded BDC has about 600 plus million and growing our credit integral fund Creditex same deal has had a lot of growing I do think that.
Speaker Change: The biggest opportunity ahead of us is to integrate semi liquid products and to integrate private markets into our over 300 billion managed models in SMA franchise that would be the biggest unlock and I really do think it's our competitive advantage. It is at the heart of the models venture we have with partners group. It is at the heart.
Speaker Change: <unk> of many of the previously announced partnerships we have with the best net Gol's capital case, and best Mark So we think that.
Speaker Change: To best execution channels for us here to help clients our target date funds and retirement accounts, assuming that we can have a favorable conditions to do so and manage models in wealth and retail channels and the <unk> structures in UK and Europe.
Speaker Change: Okay.
Speaker Change: Your next question comes from.
Speaker Change: With TD Cowen.
Speaker Change: Okay. Thanks, very much good morning, guys.
Speaker Change: Yes, Indeed, it goes quick it goes quick remember that the IPO conversation.
Speaker Change: Yeah.
Speaker Change: Anyway. Thank you for the shout out it's been a pleasure.
Speaker Change: Just maybe other one gentleman.
Speaker Change: Just thinking about the evolution of the platform then you guidance around buyback.
Speaker Change: Our earnings power continues to scale and become more diversified and more durable how are you thinking about maybe the payout relative to the earnings power.
Speaker Change: And then how about the allocation underneath that between dividend growth and repurchase. Thank you.
Speaker Change: Sure.
Speaker Change: Thanks, a lot Bill our capital allocation strategy is consistent as I had mentioned early like first to invest in the business. That's our main focus is investing the business to drive organic growth, we preference the dividend and then the size of our share repurchases. They are an output after those allocations of capital we don't manage the company to hoard excess cash.
Speaker Change: On Blackrock balance sheet. So we have a very strong track record of returning that excess cash through share repurchases that are systematic.
Speaker Change: The size of future repurchases would result from a whole variety of factors the levels of cash flow generation and organic growth in market beta and FX, the sizing of organic and inorganic investments the leverage ratio of the company the reasonableness of that financing versus equity financing.
Speaker Change: So.
Speaker Change: All of these things would influence ultimately the sizing of the share repurchase program, but the share repurchases an output not an input into our capital management strategy, but this year, we had $4 7 billion returned to share too.
Speaker Change: To shareholders, we know that Blackrock has become an attractive compound or between dividends and buybacks and we want to keep that track record up for our clients and shareholders.
Speaker Change: Ladies and gentlemen, we have reached the allotted time for questions. Mr. Fink do you have any closing remarks.
Speaker Change: Thank you operator, I want to thank everybody for joining us This morning, and your continued interest and our firm Blackrock.
Speaker Change: Our record results in 2024 are just the beginning of our next phase of growth.
Speaker Change: Invested ahead of the structural growth trends and drivers that we believe will define the future of the capital markets and asset management.
We have a lot of exciting work ahead of us, including the planned addition, and integration of frequent and H B S.
Speaker Change: And we entered 2025 better positioned than ever deliver differentiated performance to our clients and value creation for our shareholders.
Speaker Change: And have a really wonderful quarter and enjoy.
Speaker Change: Talk to you in next quarter. Thank you.
Speaker Change: This concludes today's teleconference. You may now disconnect.
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