Q2 2025 BlackRock Inc Earnings Call

Christopher Meade: Mr. Meade, you may begin your term. 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 forward looking statements.

Christopher J Meade Alliance have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period if you'd like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. If you would like to withdraw your question, please. Press star 2. Thank you, Mr. Me, you may begin your conference

Good morning everyone. I'm Chris me the general counsel of BlackRock

Christopher Meade: We call your attention to the fact that BlackRock's actual results may of course differ from the As you know, BlackRock has filed reports with the FCC, which lists some of the factors that may cause the results of BlackRock to differ materially from what we say today.

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.

We call your attention to the fact that blackbox actual results. May of course, differ from these statements.

Christopher Meade: BlackRock assumes no duty and does not undertake to update any forward-looking So with that, I'll turn it over to Mike. Thanks, Chris.

As you know, BlackRock has filed reports with the FCC, which lists some of the factors that may cause the results of blackbox to differ materially from what we say today.

BlackRock assumes. No Duty and does not undertake to update any forward-looking statements.

So with that, I'll turn it over to mark.

Unknown Executive: Good morning, everyone.

Unknown Executive: It's my pleasure to present results for the second quarter of 2025. 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.

Mark: Thanks, Chris. Good morning, everyone. It's my pleasure to present results for the second quarter of 2025.

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.

Unknown Executive: At our Investor Day last month, we communicated our ambitions for BlackRock in 2030. Our leadership team and our employees have seen and contributed to that vision over the last two years. We anticipated where our clients and markets were going. We've established strength at the foundation of our platform in ETFs, Aladdin, whole portfolio, fixed income, cash management. They're the strong foundations to serve clients and deliver on our organic growth objectives. We executed on organic business builds in structural growth categories, including digital assets, active ETFs, model portfolios, and systematic equities. And we've executed on three major acquisitions.

Speaker Change: At our investor day. Last month, we communicated our Ambitions for Black Rock in 2030. Our leadership team and our employees have seen and contributed to that Vision. Over the last 2 years, we anticipated where our clients and markets were going, we've established strength at the foundation of our platform in ETFs Aladdin whole portfolio. Fixed income cash management.

Unknown Executive: We've built a premier investment and technology platform across public and private markets, one that's only at the beginning of a durable long-term runway for growth. Building on our record results in 2024, we continue to see the proof points of the success of our strategy into 2025. We generated 7% organic base feed growth and over 650 billion of net inflows over the last 12 months. This success has been built on multi-year sustained growth in iShares, fixed income, systematic tax-managed strategies in Aladdin, and now expansions in private markets. We believe these engines will enable us to more consistently rise above 5% organic-based fee growth.

They're the strong foundations to serve clients and deliver on our organic growth objectives. We executed on organic business builds in structural growth categories, including digital assets active, ETFs model, portfolios and systematic equities and we've executed on 3, major Acquisitions. We've built a premier investment and Technology platform across public and private markets 1. That's only at the beginning of a durable long-term runway for growth.

Building on our record results. In 2024, we continue to see the proof points of the success of our strategy into 2025.

We generated 7% organic base fee growth and over 650 billion of net inflows. Over the last 12 months.

Unknown Executive: We posted 6% organic-based fee growth in the second quarter, for our fourth consecutive quarter of 5% or higher organic-based fee growth. We finished the second quarter with record AUM, record units of trust of $12.5 trillion. We once again delivered double-digit year-over-year growth in revenue, operating income, and earnings per share. GIP5 closed above its $25 billion target, making it the largest private markets fundraise in the histories of both BlackRock and GIP.

this success has been built on multi-year, sustained growth in, I shares fixed income, systematic tax managed strategies in Aladdin and now, expansions in private markets, we believe these engines will enable us to more consistently rise above 5% organic base fee growth

We posted 6% organic base fee growth in the second quarter for our fourth consecutive quarter of 5% or higher organic base fee growth.

Speaker Change: We finished this second quarter with record AUM record units of trust of 12.5 trillion. We once again delivered double-digit year-over-year growth in Revenue operating income and earnings per share.

Unknown Executive: We took early commercial steps to bring a first-of-its-kind public-private target-date solution to retirees with GreatGrey, a leading collective investment trust platform. And earlier this month, we closed our acquisition of HPS Investment Partners, a major milestone as we evolve towards our ambitions of 30% revenue contribution from private markets and technology by 2030. Second quarter net inflows of $68 billion were impacted by low-fee institutional index redemptions, which saw $48 billion of net outflows. Excluding that activity, BlackRock delivered approximately $116 billion of net inflows in the quarter.

Speaker Change: The target date solution to retirees with great gray. A leading Collective Investment. Trust platform.

Speaker Change: And earlier this month, we closed our acquisition of hp's Investment Partners.

Speaker Change: A major Milestone as we evolve towards our Ambitions of 30% Revenue contribution from private markets and Technology by 2030.

Unknown Executive: Turning to Financial Results. Second quarter revenue of $5.4 billion was 13% higher year over year, driven by the impact of organic growth in higher markets on average AUM, base fees consolidated in the GIP transaction, and higher technology services and subscription revenue, which includes the onboarding of PreQuest. Operating income of $2.1 billion was up 12%, and earnings per share of $12.05 was 16% higher versus a year ago. EPS also reflected higher non-operating income, a higher tax rate, and a higher share count in the current quarter. Non-operating results for the quarter included $433 million of net investment gains, driven by mark-to-market non-cash gains on minority investments, including Circle and in our co-invest portfolio.

Speaker Change: Second quarter, net. Inflows of 68 billion were impacted by low fee, institutional index redemptions, which saw 48 billion of net. Outflows excluding that activity, BlackRock delivered approximately 116 billion of net inflows in the quarter.

Speaker Change: Turning to financial results.

Second quarter revenue of 5.4 billion was 13% higher year-over-year driven by the impact of organic growth. In higher markets on average AUM. Base fees, Consolidated in the Gip transaction, and higher technology, services and subscription Revenue, which includes the onboarding of frequent

Operating income of 2.1 billion was up, 12% and earnings per share of 12.5 with 16% higher versus a year ago.

EPS also reflected higher non-operating income, a higher tax rate and a higher share count in the current quarter.

Unknown Executive: We own approximately 2.3 million shares of Circle Common Stock, which will continue to be marked through investment income going forward. Our as-adjusted tax rate for the second quarter was approximately 25%, and we continue to estimate that 25% is a reasonable projected tax run rate for the remainder of 2025. The actual effective tax rate may differ because of non-recurring or discrete items or potential changes in tax legislation. Second quarter base fee and securities lending revenue of $4.5 billion was up 15% year-over-year, driven by the positive impact of market beta on average AUM, organic base fee growth, and approximately $240 million in base fees from GIP.

Non-operating results for the quarter included, 433 million of net investment gains driven by mark-to-market. Non-cash gains on minority Investments, including Circle and in our co-invest portfolio.

We owned approximately 2.3 million shares of circle common stock which will continue to be marked through investment income going forward.

Our asset adjusted tax rate for the second quarter was approximately 25%, and we continue to estimate. That 25% is a reasonable projected tax, run rate for the remainder of 2025,

Speaker Change: the actual effective tax rate, may differ, because of non-recurring or discrete items or potential changes in tax legislation,

Second quarter base fee and securities lending revenue of 4.5 billion. Was up. 15% year-over-year driven by the positive impact of Market beta, on average AUM, organic base fee growth, and approximately 240 million in base fees from Gip.

Unknown Executive: On an equivalent day count basis, our annualized effective fee rate was down four-tenths of a basis point compared to the first quarter. This was partially due to the impact of catch-up-based fees associated with private markets fundraising, which were $36 million lower relative to the first quarter. Significant intra-month equity market declines in April were also a contributing factor. As a result of market and FX movements into the end of the quarter, we entered the third quarter with an estimated base fee run rate approximately 5% higher than our total base fees for the second quarter. That's excluding the impact of HPS.

Speaker Change: On an equivalent Day Count basis. Our annualized effective fee, rate was down 4/10 of a basis point compared to the first quarter.

This was partially due to the impact of catch up base, fees associated with private markets fundraising, which were 36 million lower relative to the first quarter.

Speaker Change: Significant intra-month Equity Market declines. In April, were also a contributing factor

As a result of market and FX movements into the end of the quarter, we entered the third quarter with an estimated base fee, run rate, approximately 5%, higher than our total base fees for the second quarter. That's excluding the impact of hp's.

Unknown Executive: The closing of HPS added $165 billion of client AUM and $118 billion of fee-paying AUM on July 1st. We expect HPS to add approximately $450 million of revenue, including $225 million in management fees, in the third quarter of 2025. We expect HPFs to positively impact BlackRock's overall effective fee rate by approximately six-tenths of a base Performance fees of $94 million decreased from a year ago, reflecting lower performance revenue from private markets, liquid alternatives, and long-only products. Quarterly technology services revenue and subscription revenue was up 26% compared to a year ago. Growth reflects sustained demand for our full range of Aladdin technology offerings and the impact of the Prequin transaction, which closed on March 3rd.

Speaker Change: The closing of hp's, added, 165 billion of client AUM, and 118 billion of fee, paying AUM on July 1st.

We expect HPS to add approximately 450 million of Revenue, including 225 million in management. Fees in the third quarter of 2025

We expect hpfs to positively impact blackrock's, overall effective fee rate by approximately 610 of a basis point.

Speaker Change: Performance fees of 94 million decreased from a year ago, reflecting lower performance revenue from private markets, liquid Alternatives and long-only products.

Unknown Executive: Prequin added approximately $60 million to second quarter revenue. Annual Contract Value, or ACV, increased 32% year-over-year, including the frequent acquisition. ACV growth increased 16% organically, also including the impact of currency exchange tailwind. Total expense increased 14% year over year, reflecting higher compensation, sales asset and account expense, and higher G&A. Employee compensation and benefit expense was up 12%, reflecting higher headcount associated with the onboarding of GIP and frequent employees, and higher incentive compensation linked to higher operating income. G&A expense increased 16%, primarily driven by the GIP and pre-QIN acquisitions and higher technology. Sales asset and account expense increased 14% compared to a year ago, primarily driven by higher direct fund expense and distribution costs.

Quarterly technology Services revenue and subscription Revenue was up 26% compared to a year ago. Growth reflects sustained demand for our full range of Aladdin, technology offerings and the impact of the frequent transaction. Which closed on March 3rd.

Speaker Change: Frequent added approximately 60 million to second quarter Revenue.

annual contract value or ACV, increased 32% year-over-year including the

ACV growth increased 16% organically also including the impact of currency exchange Tailwind.

Total expense increased 14% year-over-year reflecting higher compensation, sales, asset and account expense and higher GNA.

In employee compensation, and benefit expense was up 12%, reflecting higher headcount associated with the onboarding of Gip and frequent employees and higher incentive compensation linked to higher operating income.

Speaker Change: G&A, expense increased 16% primarily driven by the Gip and frequent Acquisitions and higher technology spend

Unknown Executive: Direct fund expense was up 23% year over year, mainly due to higher average ETF AUM and net inflows. Our second quarter as adjusted operating margin of 43.3% was down 80 basis points from a year ago, partially due to the impact of lower performance. We'll continue to execute on our financial framework of aligning organic growth with controllable expenses. This approach has yielded profitable growth and operating leverage in good markets, and we believe it adds more resilience to our operating margin when markets contract.

Direct fund expense was up, 23% year-over-year mainly due to higher average ETF AUM and net inflows.

Our second quarter as adjusted operating margin of 43.3% was down 80 basis points from a year ago partially due to the impact of lower performance fees.

We'll continue to execute on our financial framework of aligning, organic growth, with controllable expenses. This approach is yielded profitable growth and operating, leverage in good markets. And we believe it adds more resilience to our operating margin when markets contract

Unknown Executive: We welcomed approximately 800 new colleagues to BlackRock following the close of the HPS transaction. Inclusive of the HPS acquisition impact at present, we would expect a low teams percentage increase in 2025 core G&A expense with the onboarding of GIP, Prequin and HPS as the main driver of the year over year core G&A increase. In addition, we'd expect our adjusted compensation to net revenue ratio to be modestly higher due to compensation associated with performance related revenues from HPS. Our capital management strategy remains first to invest in our business to either scale strategic growth initiatives or drive operational efficiency, and then to return excess cash to shareholders through a combination of dividends and share repurchase.

Speaker Change: We welcome to 800 new colleagues to Black Rock following the close of the HPS transaction.

inclusive of the HPS acquisition impact at present, we would expect a low teens percentage increase in 2025 core GNA, expense with the onboarding of Gip prequels as the main driver of the year-over-year core GNA increase

In addition, we'd expect our adjusted compensation to net revenue ratio to be modestly higher due to compensation associated with performance related, revenues from HPS.

Unknown Executive: At times, we may make inorganic investments where we see an opportunity to accelerate growth and support our strategic initiative. At the closing of the HPS transaction, we issued and delivered approximately 8.5 million BlackRock subco units subject to two to three year lockup period. Subco units are exchangeable on a one-for-one basis with BlackRock Common Stock. We also issued approximately 1 million BlackRock Restricted Stock Units, primarily for retention of HPS employees. Additional sub-co-units may be issued in approximately five years, subject to achievement of certain post-closing conditions and financial performance milestones. If all contingent consideration is achieved, all sub-co-units are exchanged for shares of common stock, and all RSUs vest and are settled as common stock, we do not expect to issue more than approximately 13.8 million additional shares of common stock in aggregate.

Our Capital Management strategy remains first to invest in our business to either scale, strategic growth initiatives, or drive operational efficiency. And then to return excess cash to shareholders through a combination of dividends and share repurchases.

Speaker Change: At times, we may make inorganic Investments where we see an opportunity to accelerate growth and support our strategic initiatives.

At the closing of the HPS transaction. We issued and delivered approximately 8.5 million, BlackRock subco units subject to 2 to 3 year lockup periods.

Speaker Change: Subco units are exchangeable on a 1 for 1 basis, with BlackRock common stock.

We also issued approximately 1 million BlackRock restricted stock units primarily for retention of HBS employees.

Speaker Change: Additional subco units, may be issued in a proximately 5 years subject to achievement of certain post-closing conditions and financial performance. Milestones

If all contingent consideration is achieved.

Speaker Change: All subco units are exchanged for shares of common stock and all RSU.

Speaker Change: Invest in our settled, this common stock.

Unknown Executive: Subcode units issued will be included in our as-adjusted diluted shares outstanding and will be captured in our as-adjusted results going forward. We repurchased $375 million worth of common shares in the second quarter. At present, based on our capital spending plans for the year, and subject to market and other conditions, we still anticipate repurchasing at least 375 million of shares per quarter for the balance of the year, consistent with our January guidance.

We do not expect to issue more than approximately 13.8 million additional shares of common stock in aggregate.

Speaker Change: Subco units issued will be included in our as adjusted diluted shares outstanding, and will be captured in our as adjusted results going forward.

We repurchased 375 Million worth of common shares in the second quarter.

Unknown Executive: In May, we made a minority investment and established a strategic alliance with Generation Life with the goal of developing investment solutions for Australian retirees.

Speaker Change: At present based on our Capital spending plans for the year and subject to Market, and other conditions, we still anticipate repurchasing at least 375 million of shares per quarter for the balance of the Year, consistent with our January guidance.

Unknown Executive: Last week, we announced our agreement to acquire Elm Tree Funds, a real estate investment firm with $7.3 billion in client AUM, of which $3.1 billion is fee paying.

Unknown Executive: The transaction is expected to close in the third quarter of 2025, subject to regulatory approvals and customary closing conditions. In the second quarter, BlackRock generated total net inflows of $68 billion, excluding low-fee institutional index outflows. BlackRock's net inflows were $116 billion. ETF net inflows of $85 billion were diversified by channel, and over a third were driven by our clients in Europe using local ranges. Fixed Income ETFs led inflows with $44 billion, and Active ETFs and Digital Asset ETPs added $11 billion and $14 billion, respectively. Retail net inflows of $2 billion reflected continued strength in Ethereo and our Systematic Liquid Alternatives Fund.

Speaker Change: In may we made a minority investment and established a strategic alliance with generation life. With the goal of developing investment solutions for Australian retirees. Last week, we announced our agreement to acquire elm tree funds, a real estate investment firm with 7.3 billion in client, AUM of which 3.1 billion is fee. Paying the transaction is expected to close in the third quarter of 2025 subject to regulatory approvals and customary closing conditions.

Speaker Change: In the second quarter, BlackRock generated total net inflows of 68 billion. Excluding low low fee, institutional index, outflows blackrock's. Net inflows were 116 billion.

ETF net inflows of 85 billion were Diversified by Channel and over. A third were driven by our clients in Europe using local ranges.

Unknown Executive: Institutional active net inflows of $7 billion were driven by insurance client fixed income mandates and strength in infrastructure, private credit, and liquid alternatives. Institutional index net outflows of $48 billion were impacted by a single client redemption of $52 billion, primarily from fixed income.

Fixed income ETFs LED inflows with 44 billion and active ETFs and digital asset etps added 11 billion and 14 billion respectively. Retail net inflows of 2 billion, reflected continued strength in Imperial and our systematic liquid Alternatives funds.

Institutional active, net inflows of 7 billion. Were driven by Insurance client fixed income mandates, and strength, and infrastructure, private credit and liquid alternatives.

Unknown Executive: Our institutional channel delivered 3% long-term organic-based feed growth in the quarter, benefiting from client demand for active and alternative For more information visit www.blackrock.com Finally, our scale and our active approach with clients around liquidity management are driving sustained growth in our cash platform. Cash AUM is up 25% over the last year, and we generated $22 billion of net inflows in the second quarter.

Speaker Change: Institutional index, net outflows of 48 billion. Were impacted by a single client Redemption of 52 billion. Primarily from fixed income.

Our institutional Channel delivered 3%. Long-term organic based growth in the quarter benefiting from client demand for active and alternatives.

Speaker Change: Finally, our scale and our active approach with clients around. Liquidity management are driving sustained growth in our cache platform.

Cache AUM is up, 25% over the last year and we generated 22 billion of net inflows in the second quarter.

Unknown Executive: The BlackRock platform is powered by foundational growth businesses linked to long-term growth in capital markets and fast-growing client and product channels. By combining BlackRock's capabilities with GIP, Prequin, and HPS, we've laid the groundwork for an exciting future. We're already steadily delivering above 5% organic base fee growth, and our new colleagues from HPS are only going to help us build from here. There's a bright future ahead to grow with clients, build great careers for our employees, and deliver profitable growth for our shareholders.

The Black Rock platform is powered by foundational growth. Businesses. Linked to long-term growth in capital, markets and fast growing client and product channels.

Laurence Fink: I'll turn it over to Larry. Thank you, Martin. Good morning, everyone. And thank you for joining the call. Over many years, BlackRock has worked to serve the ambitions of each and every client around the world. From the largest asset owners to individuals just getting started with investing. We design and deliver strategies and products that fit their unique long-term needs and aspirations. We deliver in a way that best serves each client, whether it's through whole portfolio solutions. Opportunistic Investments, or Customized Models in SMA. Throughout BlackRock's history, we've been relentless in anticipating the future needs of our clients.

Speaker Change: And HPS. We've laid the groundwork for an exciting future. We're already steadily, delivering above 5%, organic base fee growth in our new colleagues from. HPS are only going to help us build from here? There's a bright future ahead to grow with clients. Build great careers for our employees and deliver profitable growth for our shareholders. I'll turn it over to Larry

Thank you, Martin, good morning, everyone. And thank you for joining the call.

Speaker Change: Over many years.

Speaker Change: Black has worked this served, the Ambitions of each and every client around the world, from the largest asset owners to individuals.

Just getting with their start with investing.

Speaker Change: We designed and deliver strategies and products that fit their unique long-term needs and aspirations.

We delivered a way that best serves each client whether it's through whole whole portfolio Solutions.

Speaker Change: Opportunistic Investments or customized models in smas.

Laurence Fink: and taking strategic actions to evolve for them. Our sustained multi-year growth has been powered by our whole portfolio approach. We were the first provider to blend active and index at scale through our acquisition of BGI and iShape. Our integration of active and index investing propelled the next 15 years of success for our clients and shareholders.

Drop blackbox history, we've been Relentless and anticipating the future needs of our clients.

Speaker Change: And taking strategic actions to evolve for them.

Speaker Change: Our sustained. Multi-year growth has been powered by our whole portfolio approach.

Speaker Change: we were the first provider to blend active and index at scale through our acquisition of bgi and I shares

Laurence Fink: I share the AUM. was about $300 billion when we announced our acquisition. And today it's approaching $5 trillion. Now we're building on our foundational platform to redefine the whole portfolio again by bringing together public and private markets across both asset management and technology. That foundational platform has powered performance for clients and sustained organic base feed growth through cycles. We believe our expansions can drive even higher growth.

our integration of active and index investing propelled the next 15 years of success for our clients and shareholders.

I shares AUM.

Speaker Change: Was about 300 billion when we announced our acquisition and today, it's approaching 5 trillion dollars.

Speaker Change: And now we're building on our fundamental, our foundational platform to redefine the whole portfolio, Again by bringing together public and private markets across both asset management and Technology.

Speaker Change: That foundational platform has powered performance for clients and sustained organic base fee growth through Cycles. We believe our expansions can drive even higher growth.

Laurence Fink: Our trust and comprehensive relationships. We have clients across our core businesses, like Aladdin, ETFs, fixed income and retirement are now driving at even a broader with an even a broader opportunity set. We're seeing secular demand for capabilities we developed in recent years like digital assets, active ETS, systematic strategies, and customized SMAs through Appirio and SpiderRock. The strength of BlackRock's platform is also expanding the growth potential of GIP and HBS. They're both premier firms in their own right, but they recognize how our client relationships and the completeness of our platform could help us all achieve new heights together.

Our trust and comprehensive relationships. We have the clients across our core businesses. Like Aladdin, ETFs, fixed income. And retirement are now driving at even a broader with an even a broader opportunity set.

Speaker Change: We're seeing secular demand for capabilities. We de developed in recent years, like digital assets active ETFs systematic, strategies and customized. Smas through a perio and Spider Rock.

The strength of blackbox platform is also expanding the growth potential of Gip and HPS. They're both Premier firms in their own, right? But they recognize how our client relationships in the completeness of our platform could help us all achieve New Heights together.

Laurence Fink: BlackRock's Ethos of Change. The integration of firms and the best parts of their culture, that's what allows us to be more adaptive with our clients. Our history of integration is very different. That sets us apart from any other public or private markets firm in the industry. BlackRock's breadth and scale has differentiated us with our clients of all sizes worldwide. We're delivering an integrated approach to help our clients across all aspects of public and private markets invest. We enable a seamless view into investment management, into technology and data on one single platform. We remain steadfast in our one BlackRock culture, making sure clients have access to all a BlackRock In a comprehensive, consistent way, in every region, with every client.

Speaker Change: Blackrock's ethos have changed.

The integration of firms and the best parts of their culture. That's what allows us to be more adaptive with our clients.

Our history of Integrations is very different.

And it sets us apart from any other public or private markets firm in the industry.

Speaker Change: We enable a seamless view into investment management into technology and data on 1 single platform.

Speaker Change: We remain steadfast in our 1, Black Rock culture. Making sure clients have access to all of BlackRock

and a comprehensive consistent way in every region with every client.

Laurence Fink: A longstanding relationships in history of reinvention are resulting in a higher, more diversified organic base seed growth. We're now generating 6% organic base seed growth for the second quarter in the first half of 2025 and 7% over the last 12 months. Revenues, operating income, and earnings per share each grew double digits. Total inflows were $116 billion excluding the index activity Martin mentioned. Growth is being powered by both our largest core businesses and newer initiatives. iShares ETFs have had a record first half inflows. Our technology ACV growth reached a fresh high of 16 percent. The strong fundamentals alongside client demand for private markets.

A long-standing relationships in history of reinvention are resulting in a higher. More Diversified organic base fee growth. We're now generating 6% organic base fee growth for the second quarter and the first half of 2025 and 7% over the last 12 months.

Revenues operating income and earnings per share, each grew double digit.

Total inflows were 116 billion, excluding the index activity. Martin mentioned,

Growth is being powered by both our largest core businesses in newer initiatives.

I shares ETFs have had a record first, half and flows.

Speaker Change: Our technology, ACV, growth reached a fresh high of 16%.

Laurence Fink: Digital Assets, Aperio, and Systematic Strategies propel another consecutive quarter above target organic growth and a record AUM of $12.5 trillion. Our global reach delivers diversification upside to our platform, with gains in international currencies lifting AUM by over $170 billion in the quarter. We manage four and a half trillion for in AUM for clients outside the United States. Many of our largest growth opportunities are outside our home market, including our work in India and the Middle East alongside of our established presence in Europe and Asia. BlackRock is executing on a deepening set of opportunities across technology and data and public and private markets.

The strong fundamentals alongside client demand for private markets.

Digital assets aerio and systematic strategies Propel, another consecutive quarter or above Target, organic growth, and a record AUM of 12 and a half trillion dollars.

Speaker Change: Contains an international currency lifting AUM by over 170 billion in the quarter.

Speaker Change: We managed 4 and a half trillion for in AUM for clients outside the United States. Many of our largest growth opportunities are outside our home Market, including our work in India, in the Middle East, alongside our our established presence in Europe and Asia.

Laurence Fink: Momentum is only accelerating, and many of our recent milestones have not yet reflected in our results.

BlackRock is executing on a deepening set of opportunities across technology and data and public and private markets.

Speaker Change: Momentum is only accelerating and many of our recent Milestones. Have not yet reflected in our results.

Laurence Fink: Two weeks ago, we closed our acquisition of HBS Investment Partners. We're excited to welcome Scott, Scott and Mike and the entire HBS team to BlackRock. We see immense growth ahead for our combined franchise. Together, we'll be able to serve investors and borrowers across all of the private financing needs. My feedback has been extremely positive as we integrate G.I.P., H.P.S., and Frequent For many companies, periods of M&A contribute to a pause in client engagement. We're seeing the opposite. Clients are eager to put more capital to work with BlackRock. They appreciate our reputation as long term investors and partners.

2 weeks ago.

We closed our acquisition of hp's Investment Partners.

Speaker Change: We're excited to welcome, Scott, Scott and Mike and the entire HBS team to Blackrock.

We see immense growth ahead for our combined franchise together. We'll be able to serve investors and borrowers across all of the private financing needs.

Speaker Change: Find feedback has been extremely positive as we integrate Gip, HPS and frequent.

For many companies, periods of m&a, contribute to a pause in client engagement.

Speaker Change: We're seeing the opposite.

Clients are eager to put more Capital to work with BlackRock.

Laurence Fink: We're not transactional. We're helping them invest in compelling long term growth themes like the global needs of new infrastructure investments and the fast evolving debt financing landscape. These are creating differentiated private markets opportunities for our clients. At the end of June, we marked the major milestone with the final close of GIP's SIF, that flagship infrastructure strategy. It surpassed its target, raising $25.2 billion. That's a validation of how clients are embracing the logic of the BlackRock-GIP combination. Many would expect a change in ownership to dampen fundraising. In our case, it ultimately ended up driving an even higher fundraising ability.

They appreciate our reputation as long-term investors and partners. We're not transactional.

We're helping them invest in compelling, long-term growth themes, like the a global needs of new infrastructure Investments and the fast evolving debt financing landscape. These are creating differentiated private markets opportunities for our clients.

Speaker Change: At the end of June, we marked the major Milestone with a final close of gp6 that Flagship infrastructure strategy.

Speaker Change: It surpassed its Target raising 25.2 billion dollars.

Laurence Fink: GIP5 represents the largest ever client capital raise in a private infrastructure fund, and our AI partnership continues to attract significant capital interest, including the recent additions of Quaid Investment Authority and Tomasic. The diversification benefits and potential for higher returns offered by private markets also make them an attractive investment for retirement accounts, a space where BlackRock has been a leader. We were recently selected by the Great Great Trust Company to provide a custom target date fund, GLIDEPAP, that strategically allocates across public and private markets. We have a wealth of expertise in the defined contribution space, and we're looking to expand across to private markets across a variety of retirement solutions.

Speaker Change: That's a validation of how clients are embracing the logic of the Black Rock Gip combination. Many would expect a change in ownership to dampen fundraising. In our case, It ultimately ended up driving an even even higher fundraising ability.

Speaker Change: Gip 5 represents the largest ever client Capital, raise in a private infrastructure fund and our AI partnership continues to attract significant Capital interests including the recent additions of quaint investment Authority and tamasic.

The diversification benefits and potential rule for a higher returns offered by private markets. Also make them an attractive investment for retirement accounts, a space where Black Rock has been a leader

We were recently selected by the great. Great, great. Great Trust Company to provide a custom Target date fund Glide path that strategically allocates across public and private markets.

Speaker Change: We have a wealth of expertise in the defined contributions base and we're looking to expand across uh to private markets across a variety of Retirement Solutions.

Laurence Fink: Retirement is core to BlackRock. In the United States and internationally, we are a trusted expert in advising clients, advising governments and policymakers on how they can help their constituents achieve a more secure futures and retire with dignity. Demographic shifts and financial pressures are driving governments and corporations to rethink their retirement plans and their retirement systems, putting significant money in motion. In the Netherlands, for example, a transition from defined benefits to a hybrid form of defined contribution is well underway. BlackRock has worked with clients to manage this transition and improve investment outcomes for planned members. We had a related $30 billion outsourcing mandate with a Dutch client fund in early July.

Speaker Change: Retirement is core to Black Rock in the United States and internationally. We are a trusted expert and Advising clients. Advising governments and policy makers on how they can help their constituents. Achieve a more secure Futures and retire with dignity,

Demographic shifts and financial pressures are driving governments and corporations to rethink their retirement plans. And the Retirement Systems, putting significant money in motion,

Speaker Change: In the Netherlands, for example, I transitioned from defined benefits to a hybrid form of divine contribution as well underway.

Speaker Change: Black.

Clients to manage this transition and improve investment outcomes for plan members.

Speaker Change: We had a related 30 billion dollar Outsourcing mandate with a Dutch uh client Fund in early July.

Laurence Fink: We take a blended approach of being deeply local and powered by our global platform. We deploy capital in a public and private markets in every country in which we operate and beyond. And we are consistently studying what's driving capital flows both within each country and within each region. Our ability to execute at scale, at the local levels, differentiates our international business.

We take a blended approach of being deeply local and powered by our Global platform.

Speaker Change: We deploy capital in a public and private markets in every country in which we operate and Beyond.

And we are consistently studying, what driving Capital flows both within the each country and within each region.

Speaker Change: our ability to execute at scale at the local levels, differentiates our international business,

Laurence Fink: We're bringing a global framework to India through our geo BlackRock offering in partnership with JSS and Reliance, who already serves hundreds of millions of individuals across India. There are huge advancements taking place through the digitization of currency and identification. But India remains a country of savers, not investors. Our joint venture GeoBlackRock recently launched its first funds raising over $2 billion with over 67,000 customers. We look forward to helping more and more people participate in the growth of local and global capital markets and global connections.

Speaker Change: We're bringing a global framework to India through our jiub, Black Rock offering and partnership with JFS and Reliance who are already. Serves hundreds of millions of individuals across India.

Speaker Change: There are huge advancements taking place through the digitization of currency and identification. But India remains a country of Savers, not investors.

Laurence Fink: Our acquisition of PreQuint will be a key to enabling more transparency and clarity in private markets. In just the first few months since our closing of the PreQuint acquisition, we've seen strong early demand from both GPs and LPs as they are looking to better analyze and benchmark their private market allocations. If through better analytics, standardized benchmarks, and more widely available performance data, we can close the information gap and enable even more future growth in private markets investing. In the public markets, our iShares business continues to be a powerful growth engine and a key driver of industry innovation.

Our joint venture go black rock rock recently, launched its first funds, raising over 2 billion dollars, with over 67,000 customers. We look forward to helping more and more people participate in the growth of local and Global Capital markets and Global Connections.

Speaker Change: In private markets, in just the first few months, since our closing of the frequent acquisition, we've seen strong early demand, from both GPS and LPS as they are looking to better analyze and Benchmark their private Market allocations. It's through better Analytics.

Speaker Change: Standardized benchmarks and more widely available performance data. We can close the information Gap and enable even more future growth in private markets, investing.

Laurence Fink: After nearly 30 years and approaching $5 trillion in assets, innovation remains at the heart of our franchise. Our newest investments and product launches from just the last few years are driving outsized growth, contributing to record flows in the first half of 2025, and 12% organic-based feed growth in ETFs this quarter. Our active ETFs delivered $11 billion of net inflows, and our digital asset products continue to set new records. IBIT, at quarter end, crossed over $75 billion in AUM, with another $12 billion in net inflows. As of this morning, it crossed over $80 billion. iShares ETPs are bridging the traditional capital markets with fast-growing cryptocurrency markets.

In the public markets. Are I share business continues to be a powerful growth engine and a key driver of Industry innovation.

After nearly 30 years in approaching 5 trillion in assets, Innovation remains at the heart of our franchise.

Speaker Change: Our newest investments in product launches from just the last few years are driving outside growth contributing to record flows in the first half of 2025 and 12 percent, organic based feed growth in ETFs this quarter.

Our active ETFs delivered, 11 billion of net inflows and our digital acid products continue to set new records. I bet at quarter end crossed over 75 billion in AUM. With another 12 billion dollars in net inflows. As of this morning, it crossed over, 80 billion dollars.

Laurence Fink: They're also bringing new investors to the iShares brand. Nearly a third of the investors who first came to BlackRock for iBit have gone on to purchase other iShares products. It's this type of Capability expansion that drives durable growth and new client opportunities for our business. From category innovation in iShares to new ventures across the world, the investments we made across our platform are paying off. Many of the categories that are leading our growth barely existed two years ago. Categories like active ETFs, digital assets, and our scaled private markets franchise. Just as importantly, BlackRock's core businesses like ETFs, Aladdin, and cash management continue to be a growth engine for the firm and are cornerstones of many client relationships.

Speaker Change: I Shares etps are Bridging the traditional Capital markets with fast growing cryptocurrency markets.

They're also bringing new investors to the ishares brand. Nearly a third of the investors, who first came to Black Rock for ibit, have gone on to purchase other. I shares products it's this type of

Speaker Change: Capability expansion, that drives durable growth, and new client opportunities for our business.

From category, innovation in, I shares to new Ventures across the world. The Investments, we made across our platform are paying off, many of the categories that are leading our growth, barely existed 2 year ago, 2 years ago, catteries like active ETFs, digital assets and our scaled private markets franchise

Laurence Fink: A lot of firms got out of the cash business after the financial crisis when fee waivers were in place during a sustained period of low rates. But we recognize a simple thing. Every client needs to hold cash. Cash management has been the first entry point for many of our clients who've gone on to build large mandates with BlackRock. Our cash AUM is nearly $1 trillion. And I think it's remarkable considering we're not a direct retail business or a DTC bank. At BlackRock, we think of cash as another avenue for innovation. We see a great untapped opportunity for cash and liquidity, where people want to use the technologies of digital assets to access traditional instruments like treasury.

Just as importantly blackrock's core businesses like ETFs Aladdin and cash management continue to be a growth engine for the firm and our cornerstones of many client relationships.

A lot of firms got out of the cash business after the financial crisis. When fee waivers were in place, during a sustained period of low rates, but we recognize a simple thing, every client needs to hold cash.

Cash management has been. Um, the first entry point, for many of our clients who've gone on to build large mandates with BlackRock.

Speaker Change: Our cash am is nearly 1 trillion dollars and I think it's remarkable considering we're not a direct retail business or a DTC Bank.

Laurence Fink: Our tokenized liquidity fund now has $3 billion in AUM. And what started as a small corporate investment in asset management relationship with Circle in 2022 has grown meaningfully. We delivered a significant gain to shareholders this quarter in connection with the IPO and subsequent trading activity. And we now manage more than $50 billion for Circle Stablecoin Cash Reserve. We're entering our seasonally strongest back half of the year with considerable momentum and a robust pipeline. Our recent closing of HBS will help us offer even more to clients. We believe our clients and shareholders will be beneficiaries as GIP, HBS and Prequin are now all coming together in a shared BlackRock story.

At BlackRock we think of cash as another Avenue for Innovation. We see a great untapped opportunity for cash and liquidity where people want to use their the Technologies of digital assets to access traditional instruments like Treasury

Our tokenized liquidity fund now, has 3 billion in AUM and what started as a small corporate investment in Asset Management relation with circle. In 2022 has grown grown meaningfully, we delivered a significant gain to shareholders this quarter in connection with the IPO and subsequent trading activity. And we now manage more than 50 billion dollars for Circle, stablecoin cash Reserves.

We're entering our seasonally strongest back, half of the year with considerable momentum and a robust pipeline.

Laurence Fink: We are intentionally organizing to bring clients under one unified firm, not a collection of enterprises, and we have aligned our cultures and aligned each and everybody's interests. The opportunity to deliver the full reach of BlackRock's capabilities to more individuals, to more companies and governments and regions is greater today than ever before. Our comprehensive platform is deeply connected to our clients, to the capital market, and to the future trends that are driving portfolios.

Our recent closing of HBS will help us offer even more to clients. We believe our clients and shareholders will be beneficiaries as Gip HBS and frequent are now all coming together in a shared BlackRock story.

We are intentionally organizing to to bring clients under 1. Un, not a collection of Enterprises, and we have aligned our cultures and aligned each and every 1 of these interests.

The opportunity to deliver the full reach of blackbox capabilities. The more individuals to more companies and governments and regions is greater today than ever before.

Laurence Fink: These are just the early days in our next phase of growth at BlackRock.

Operator: Operator, let's open it up for questions. At this time I'd like to remind everyone in order to ask a question If you ask a question, please take your phone. Handset to Avoid Limit yourself to one If you have a follow-up, please reenter.

Our comprehensive platform is deeply connected to our clients to the capital markets and to the Future trends that are driving portfolios. These are just the early days in our next phase of growth at BlackRock.

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

Thank you at this time. I'd like to remind everyone in order to ask a question. Please press star then the number 1 on your telephone keypad. If you do ask a question, please, take your phone off at speaker setting and use your handset to avoid any potential feedback.

Michael Cyprys: Pause for just a moment to compile the Q&A Q&A We'll take our first question from Michael Cyprys with Good morning. With a number of acquisitions closed over the last year now under your belt, I was hoping you could talk about the progress that you're making here, bringing HPS in particular and GIP together with BlackRock, how the conversation is progressing, in particular with insurance clients, to what extent you're seeing new mandate wins or expanded relationships there. And then can you just update us on the traction and the wealth and retirement channels as it relates to private market and multi-liquid strategies and talk about some of the steps you're looking to take over the next 12 months.

Speaker Change: Please limit yourself to 1 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.

Speaker Change: Our first question from Michael Cyprus with Morgan Stanley.

Speaker Change: Hey, good morning, Michael.

Laurence Fink: Thank you. Great question. Thank you, Michael. Well, I think as we showed in the in the closing of the second quarter, The client feedback has been extremely strong. I actually was in Asia this past week. and the opportunities we have with insurance companies, with wealth management across our, across Asia and every other region is stronger than we ever imagined. As we said, G.I.P. 5 posed above our target at 25.2. Our AIP fund will have a lot of positive announcements in the coming quarters. We announced in the past quarter that we added Tomasic and Kuwait Investment Authority as a part of our investment team, and we are confident that we'll be able to raise the full $30 billion that we announced in equity.

Speaker Change: Morning um with the number of Acquisitions closed over the last year now, under your belt. I was hoping you could talk about the progress that you're that you're making here. Bring HPS in particular and Gip together with BlackRock how the conversations progressing in particular with insurance clients to what extent, you're seeing new mandate wins or expanded relationships there and then can you just update us on the tracks and the well and retirement channels as it relates to private market and multi liquid strategies and talk about some of the steps you're looking to take over the next 12 months. Thank you.

Great question. Thank you Michael. Um, well I I think as we uh, showed in the in in the closing of the second quarter um

The client feedback has been extremely strong. I actually was in Asia this past week, um, and the opportunities we have with insurance companies with wealth management, uh, uh, uh, across our across Asia. And every other region is, is stronger than we ever imagined. As we said, uh, Gip 5 closed above our Target at 25.2

Laurence Fink: And once we then begin those projects, we'll have to raise another $100 billion. Associated Debt to finance those type of projects and we're working with the hyperscalers as we speak right now on this and we have some to finance those type of projects and we have some Great opportunities ahead of us in that. Those are just two examples. The opportunities we see with with G.I.P., there's no question in my mind that with rising deficits, with more and more governments, the conversations we're having, whether it's in Europe or the United States or Japan, that The role of public-private financing and the role of infrastructure financing is going to grow dramatically.

Speaker Change: Our AIP fund will have a lot of positive announcements in the coming quarters, and we announced in the past quarter that we added, uh, uh, tomasic and Kuwait investment Authority, as a part of our investment team. And we are confident that we'll be able to raise the full 30 billion dollars that we announced, uh, in equity. And once we then begin those projects, we'll have to raise another hundred billion dollars in Associated debt to finance, those type of projects. Uh and we're working with a hyperscalers as we speak right now on this and we have some really great opportunities ahead of us and that those are just 2 examples.

Speaker Change: the opportunities we see with, uh, with Gip, there's no question in my mind that with, uh, Rising deficits, uh, with more and more governments, the conversations we're having, uh, whether it's in Europe, or the United States or Japan, um, that

Laurence Fink: And so we see some huge, huge opportunities. Another big opportunity that GIP just closed was purchasing all the Malaysian airports as a just another example of the opportunity. And, and we are still progressing with the proposed announcement of of our port strand. with Hutchinson. So all of that is just a good example of some of the growth opportunities we see, but the resiliency and the conversations have never been greater. Related to private credit and HBS, we're just at the beginning, but we could say, you know, we'll have a lot to discuss in the third quarter, but the flow opportunities of HBS during the period of time of announcement and closing did not abate at all.

Speaker Change: the role of public private financing. And the role of infrastructure financing is going to grow dramatically. Um,

Speaker Change: And so we see some huge, huge opportunities. Another big, uh, opportunity that, uh, Gip just closed was, uh, purchasing all the uh, Malaysian airports. As of just another example of the opportunity. Uh, and uh, and we are still progressing with the proposed announcement of um, of our ports transaction with uh, with Hutchinson. So, all of that is just a good example of some of the growth.

Speaker Change: Opportunities. We see but the resiliency and the conversations have never been greater.

Laurence Fink: So we are seeing across the board a very large acceptance of the industrial logic of the combination of HBS, GIP, and BlackRock. And I would say that was quite a big difference than when we did the BGI transaction in 2000. Today, clients are looking at the merits of what BlackRock can do, our history of integration, our history of bringing one culture together, bringing the best of all the acquired organizations to be part of us, to build a new foundational structure around BlackRock. On insurance, you know, with having $700 billion of AUM with insurance companies, and that is continuing to grow, we are continuing to see more and more opportunities where we could be driving private markets with the insurance companies that we already manage.

Speaker Change: Uh, related to private credit and HPS. Uh, we're just at the beginning. Um, but we could say, you know, we'll have a lot to discuss in the third quarter, but the flow opportunities of HBS, During the period of time of announcement, and closing did not Abate at all. So, we are seeing the board. Um, a very large acceptance of the, the industrial logic of the combination of HBS, Gip and BlackRock.

Laurence Fink: In wealth, very, very exciting. If there is a change in the opportunity related to defined contributions, it is only going to accelerate the opportunities we have in the private market space with retirement. 50% of our assets that we manage is in retirement. And so the relationships we have with plans is enormous. If you look at our success in LifePath. If you look at our success in our target date products, if you look at our success in what we're trying to do now, a life path paycheck, where now we have over $500 billion in that alone.

And I would say that was quite a big difference than when we did the uh the PGI transaction in 2009. Uh, today clients are looking at the merits of what Black Rock can do. Our history of integration, our history of bringing 1 culture together, bringing the best of, of all the acquired organizations to be part of us to, to build a new foundational, uh, structure around BlackRock, uh, an insurance, you know, with having 700 billion dollars of AUM with insurance companies and that is continuing to grow. Uh, we are continuing to see more and more opportunities where we can be driving private markets with the insurance companies that we already manage. Um, in wealth. Very, very exciting. If there is a change in the opportunity related to the Fine contributions, um, it is only going to accelerate

Speaker Change: The opportunities we have in the private Market space with retirement, 50% of our assets that we manage uh is in retirement. And so the relationships we have with plans is enormous, if you look at our success,

Speaker Change: In life path.

Laurence Fink: You know, our relationships with these five contribution plans is as strong as ever. We're innovating. We're creating opportunity. Now, if you overlay the opportunity for wealth worldwide, whether it's wealth in Japan, wealth in the United States, wealth in any region. The need, especially here in the United States, because you have a much higher threshold related to fiduciary responsibility. is going to be analytics and data. And if that moves forward, if there's that opportunity, the need for analytics and data. will more than ever create huge opportunities for PreQuint, and the future opportunity of growth with PreQuint eFront.

Speaker Change: If you look at our success in our Target date, uh products. If you look at our success and what we're trying to do now, a life path paycheck where now we have over 500 billion dollars in in in that alone.

You know, our relationships with these defined contribution plans is as strong as ever.

now, if you overlay, the opportunity for wealth worldwide, whether its wealth in Japan, wealth in the United States wealth, in any region,

Speaker Change: the need especially here in the United States because you have a much higher threshold related to fiduciary responsibility.

Is going to be analytics and data.

And if that moves forward, if there's that opportunity the need for analytics and data.

Laurence Fink: And so we believe all these changes, the integration and blending of both public markets and private markets is gonna all be centered around having a base of great analytics and data. And I am more certain than ever. The acquisition of Pariquan alongside E-Front is going to be generating much more opportunity for BlackRock. And I believe we are well positioned, whether it's well positioned because of the product profile we have with HBS and GIP, but with a foundational position we're in, in the retirement space, in the defined contribution space, overlaying all the analytics data that we have under Aladdin now.

Will will more than ever create huge opportunities for frequent and the future opportunity, and growth of frequent effort. And so we believe

All these changes the the integration of and blending above public markets and private markets is going to all be centered around, having a base of great analytics and data.

And I am more certain than ever.

Speaker Change: The acquisition of frequent alongside efront is going to be generating much more opportunity for BlackRock.

Laurence Fink: puts us in a position that we could have broader, deeper conversations with our clients, and I'm very much looking forward to having those deep conversations with each and every client. Thank you.

And I believe we are well positioned, whether it's well positioned because of the product profile we have with HBS and Gip and what we but with a foundational uh position we're in in the retirement space, in the defined contribution, space overlaying all the analytics data that we have under Aladdin now.

Puts us in a position that we could have broader deeper conversations with our clients. And I'm very much looking forward to having those deep conversations with each and every client,

Craig Siegenthaler: Your next question comes from Craig Siegenthaler. Hey, Craig. Hey, good morning, Larry, Martin. Hope everyone's doing well. I think we are. on a hot humid summer day.

Speaker Change: Thank you. Your next question comes from Craig segan dollar with Bank of America.

Hey Craig.

Craig Segan: Hey, good morning Larry Martin. Hope everyone's doing well.

Speaker Change: I think we are.

On a hot humid summer day.

Craig Siegenthaler: So I actually want to continue with that retirement commentary to Mike's question. So our question is on the potential migration of privates into target date funds and the US foreign channel. We did see the great the great gray wind news in late June. That was a positive sign. But I think BlackRock may be getting ready to launch its own target date fund with private allocation.

Martin Small: So I was hoping you could update us on your strategy, timeline and also what are you waiting to see from the Department of Labor, the SEC or Congress before you launch your own target date fund with private allocation? Thank you. Martin. Thanks, Craig. How are you today? Thanks so much for the question. As Larry mentioned, you know, Craig, more than half the $12 trillion of assets plus that we manage at BlackRock are related to retirement. And so building better portfolios for retirees is at the heart of what we do. I think we have real ambitions also to bring the same tried and true portfolio construction characteristics that built the DB market.

So um I actually want to continue with that retirement commentary to Mike's question. Um so our question is on the potential migration of private into Target date funds and the US foreign K Channel. Um, we did see the great uh the Great Grey win news in late June, that was a positive sign but I think BlackRock may be getting ready to launch. Its own Target, date fund with private allocation so I was hoping you could update us on your strategy timeline. And also what are you waiting to see from the Department of Labor? The SEC or Congress before you launch your own Target date fund with private allocations.

Speaker Change: Thank you, Martin. Thanks Craig. Uh, how are you today? Thanks so much for the question. Um, as Larry mentioned, you know, Craig, uh, more than half the 12 million dollars of assets, plus that we manage at BlackRock are related to retirement. Uh, and so building better portfolios for retirees uh is at the heart of what we do. Uh, I think we have real Ambitions also do.

Martin Small: So defined benefit has long been allocating to both public and private markets. If you think of the largest public plans across corporate and across the public sector, they've always been private markets investors. That opportunity should be there for individuals in their long-term tax advantaged accounts as well. We're the number one DCIO, the defined contribution investment only firm. We're a top five private markets manager following our recent acquisition. So we think we have all the building blocks here.

Martin Small: As I said on the last call, and I think Larry alluded to, for the opportunity I think to be most tangible in larger plans, we'll likely need to see litigation reform or at least some advice reform in the U.S. to add private markets exposure into DC plans. What I would say relative to the call last quarter is we're really encouraged by the recent dialogue with policymakers on these topics and some of the activity by trade associations that I think has been helpful in really building a fact base and consensus around this. There's still significant work to do, but we feel positive momentum is certainly building.

Speaker Change: To bring the same tried-and-true portfolio construction characteristics, that built the DB, uh, market. So Define benefit has long, been allocating to both public and private markets. If you think of the largest public plans across corporate uh, and across uh, the public sector. Uh, they've always been private markets investors that opportunity should be there for individuals and their long-term uh, tax advantaged accounts as well. We're the number 1, dcio, uh, the D the defined contribution investment only firm, where a top 5, private markets manager, following our recent acquisitions. So, we think we have, uh, all the building blocks here, as I said on the last call and uh, I think Larry alluded to for the opportunity. I think to be most tangible in larger plans. Um, we'll likely need to see litigation reform or at least some advice reform in the US to add private markets exposure into DC plans. What I would say relative to the call last quarter is we're really encouraged by the recent dialogue with policy makers on these topics. Uh and some of the activity by trade Associates.

Martin Small: We're really proud of our recent announcement with Great Gray to build and power the glide path for their public private target date solution. As I mentioned on the call, I think the real advantage that BlackRock brings here is that we've been doing glide path technology across target date funds for 30 plus years. We feel that this is a place that we have particular strength and can add a lot of value rather than just rote allocations of X percent to public markets and Y percent to private markets. That glide path is so important as you go from the accumulation to the end of the target date and ultimately to a decumulation phase.

Associations that I think has been helpful uh and really building a fact-based and consensus around this. There's still significant work to do but we feel positive momentum uh is certainly building. We're really proud of our recent announcement uh with great gray to build uh and power the Glide path for their public. Private Target date solution, as I mentioned on the call, I think the real advantage that BlackRock brings here is that we've been doing Glide path technology across uh Target date funds for 30 plus years. Um, we feel that this is a place that

Martin Small: So with Great Gray, we're going to provide the underlying index equity as well as fixed income exposures as well as our private equity exposures through our product, BlackRock Private Investment Fund, BPIF.

Speaker Change: We have particular strengths and can add a lot of value, rather than just wrote allocations of X percent to public markets. And why percent to private markets that Glide path is so important. Uh as you go from the accumulation, to the end of the target date and ultimately to a decumulation phase.

Martin Small: We're ultimately working on other products and we would expect to launch a proprietary life path with Privates Target Date Fund, I believe sometime in 2026. So we're excited about that as a way of continuing to bring public private whole portfolio investing to the retirement market.

Laurence Fink: Let me just add one thing just the industrial logic and why this is so imperative. If through broadening the investment profile of what can be included in a defined contribution plan, if you if you believe over a 30 year horizon, you could add 50. is not an unrealistic target. It adds 18% to the corporate 30 years later. That should be compelling enough. Now, the reality is, though, there is a lot of litigation risks. There's a lot of issues related to the defined contribution business. And this is why the analytics and data are going to be so imperative.

But ultimately, working on other products and we would expect to launch a proprietary life path with private Target date fund. Uh, I believe sometime in 2026. So we're excited about that. Uh, as a way of continuing to bring, uh, public private whole portfolio investing to the retirement Market.

Speaker Change: Let me just add 1 thing. Just the industrial logic and why this is so imperative.

Speaker Change: Um,

if through broadening the investment profile of what can be included in a defined contribution plan. If you, if you believe over a 30-year Horizon, you could add 50 basis points.

Speaker Change: Which is not an unrealistic Target.

It adds 18% to the corpus.

30 years later.

Laurence Fink: Way beyond just the inclusion. and so this is one thing that we are very certain on as this moves forward, the need for analytics and data. The role of frequent E-front Aladdin is only going to be a larger set of opportunities.

That should be compelling enough. Now the reality is though there is a lot of litigation risks, there's a lot of issues with related to the defined contribution business and this is why the analytics and data are going to be so imperative.

Speaker Change: Way Beyond just the inclusion.

And and and so this is 1 thing that we are very certain on as this moves forward, the need for analytics and data and and the role of frequent efront Aladdin is only going to is only going to be a larger set of opportunities, uh, for BlackRock

Speaker Change: In this space.

Alexander Blostein: We will go next to Alex Blostein with Hey, Larry. Good morning, everybody. Hello. I wanted to ask you guys around profitability. You've made a number of acquisitions, obviously, now they're kind of coming into the run rate. As you think about the adjusted operating margin for the back half, curious to get your thoughts, but also, as you pointed out at the investor day, the 45% plus adjusted operating margin, obviously, is quite healthy. So maybe help us sort of think through the cadence and scaling of the business as these two acquisitions kind of come into the full run rate and you continue to grow some of your faster growing areas of the business.

Speaker Change: Thank you. We'll go next to Alex lasting with Goldman Sachs.

Hey, Larry morning everybody. Hello. Um, wanted wanted to um, ask you guys around profitability, you uh, you've made a number of Acquisitions obviously. Now they're kind of coming into the Run rate. Um, as you think about the adjusted operating margin for the back half, curious to get your thoughts. But also as you pointed out at the investor day, the 45% plus, um, adjusted operating margin obviously is quite healthy so maybe help us sort of think through the Cadence and scaling of the business as these 2 Acquisitions, kind of come into the full run rate, um, and you can continue to, you know, grow some of your faster faster growing growing areas of the business.

Martin Small: Great. Thanks, Alex, for the question. I'll take that one. So we talked about the strategy at Investor Day in terms of growing the business. BlackRock continues to deliver industry-leading margin. The margin in the second quarter of 43.3% was about 80 bps lower year-over-year. That's really partially due to the impact of lower performance fees. Over the cycle, we see a very clear path to continue to target a 45% or greater margin profile. About 75% of that second quarter margin decline is really due to lower performance fees as well as the lower performance-related compensation in the quarter.

Martin Small: Just as a reminder, we defer a portion of compensation that's linked to performance fees for talent retention. So in years where we see higher performance fees, we also see higher deferrals, which impact comp expense in future years.

Speaker Change: Great. Thanks. Alex for the question. Uh I'll take that 1. So um we we talked about the strategy at investor day uh in terms of what growing the business uh BlackRock continues to deliver industry-leading margin. Um the margin in the second quarter of 43.3%, was about 80 BS, lower year-over-year, that's really partially due to the impact of lower performance fees. Um, over the cycle, we see a very clear path to continue to Target a 45% or greater margin profile, um, about 75% of that. Uh, second quarter margin decline is really due to lower performance fees, as well as the lower performance related compensation in the quarter, just as a reminder, we defer a portion of compensation

Martin Small: The remainder is really just margin impact from higher expense offset by acquisitions.

That's linked to Performance fees for talent retention. So, in years, where we see higher performance fees, we also see higher deferrals, which impact comp expense in future years. Uh, the remainder is really just uh margin impact from higher expense offset by Acquisitions. So I'd say is with the HPS acquisition, now closed on July 1st. Uh, as I mentioned, in my my remarks we expect a low teens percentage, increase in our 2025 core GNA. That's primarily driven by the onboarding of our 3. Acqua would remain in our mid to high single digit percentage, increase range and an investor day. I talked a lot about how we've executed on our financial framework, by keeping controllable expenses, within organic growth since 2023. Um, that's really driven profitable growth and margin expansion. Um, and we aim to continue to align organic Revenue growth and controllable expenses that's compensation. Uh, uh, that's compensation across base salaries and benefits as well as GNA, right? We think of controllable expenses, try

Speaker Change: Traveling together, comp and base salaries and benefits as well as GNA um, for the second quarter, our controllable expenses, excluding Acquisitions are in line with our last 12 months of organic Revenue growth of 7%.

Pre HPS, with HPS. It's it's more like 10%, uh, higher in terms of the base fee, jumping off point. So I think we have a really sound entry point into the back half of the Year, even though we get some more Consolidated expenses from bringing these Acquisitions together. It's really important to bring people together. We've got a lot of energy about co-locating people on real estate. Um, we know, we need to do events where we bring people together. We have to go see our clients. All of those things. In the long term, uh are both growth and revenue are creative for Black Rock.

Daniel Fannon: You will go next to Dan Fannon. Thanks. Good morning. Hi, Dan. Hello, I was hoping just on HBS now closed, Larry, you mentioned the growth there has been strong. I was hoping you could put some numbers around recent flow trends there. And as we think about the second half of the year, what products are in market and how we should think about organic growth or fundraising for that part of the business for the remainder of Good. I want to turn that. So thanks for the question. Definitely an exciting time at BlackRock and for our clients in private markets.

Dann Fannon: Thank you. We'll go next to Dann Fannon with Jeff.

Dann Fannon: Thanks. Good morning. Hi Dan. Good morning.

Dann Fannon: Hello. Uh I was hoping just on HBS now closed. Larry, you mentioned the growth there has been strong. I was hoping you could put some numbers around recent flow Trends there. And as we think about the second half of the year, what products are in market and how we should think about organic growth or fundraising for that part of the business uh, for the remainder of the year.

Dann Fannon: Good. I want to turn that to Martin.

Daniel Fannon: I think we talked a fair amount about this at Investor Day, but I'll give a little bit more color. We're obviously looking to scale private markets fundraising through a systematic approach to our clients. Now integrating GIP and HPS, we have a really robust and I think exciting roadmap for 25, as well as the out years, which includes the next vintage of several strategies and thematic products. Let me just give you sort of a list of the things that are out in the marketplace today. We have fundraising going on across MidCap and emerging markets infrastructure equity.

So, uh, thanks for the question. Definitely an exciting time at BlackRock, uh, and for our clients in private markets, uh, I think we talked a fair amount uh about this at investor day but uh, I'll give a little bit more color. Um, we're obviously looking to scale private markets fundraising uh through a systematic approach to our clients. Um now integrating Gip and HPS, we have a really robust and I think exciting roadmap for 25

Daniel Fannon: We have investment grade high yield and credit sensitive infrastructure debt, direct lending and junior capital, private equity secondaries, real estate debt, and some more targeted strategies in Europe and Asia on real estate equity. As Larry and I both mentioned on the call, we successfully closed GIP5, surpassing its $25 billion fundraising target. We also closed our secondary and liquidity strategies to SLS2, the next vintage of our secondaries fund at over two and a half billion. At Investor Day, we talked about targeting 400 billion in gross private markets fundraising from 2025 through 2030. We believe that'll be led again by our infrastructure and private financing solutions platforms. We're really building on very strong absolute and relative performance.

Uh, as well as uh the out years, which includes the next vintage of several strategies and thematic products. Let me just give you sort of a list of the things that are uh out in the marketplace today. Um, we have fundraising going on across midcap and Emerging Markets, infrastructure Equity. Uh we have investment grade, high yield and credit sensitive infrastructure, debt direct lending and Junior Capital private Equity, secondaries real estate debt and some more targeted strategies in Europe uh and Asia on real estate Equity as Larry. And I both mentioned uh on the call uh we successfully closed Gip 5 uh surpassing its 25 billion dollar fundraising Target. We also closed our secondary and liquidity strategies to SLS to the next vintage of our secondaries fund at over 2 and a half billion at investor day. We talked about targeting 400 billion in Gross. Private markets, fundraising through 2025, uh, from 2025, through 2030. Um, we believe that'll be led Again by our infrastructure and private financing Solutions platform

Daniel Fannon: I think very strong DPIs on the platform relative to the peer group, this power of vintage LP re-ups and track record. We really feel we're in the best position that we've ever been in there to get closer to clients. I wouldn't expect that 400 billion to be a straight line average for five years. So don't just take this last six months and average it. We'd expect more of a ramp up to higher fundraising levels in the later years, call that 2028 through 2030. And again, as Scott Kaepnick said, as Bio said, as Larry said, as Raja said, consistent investment performance is the license to grow.

Forums we're really building on very strong absolute and relative performance. Uh, I think very strong, uh, dpi's on the platform relative to the peer group, this power of vintage, LP re-ups and track record. We really feel, uh, we're in the best position that we've ever been in there to get closer to clients. I wouldn't expect that 400 billion to be a straight line average uh for 5 years. So don't just take this last 6 months on average. It um, we'd expect more of a ramp up to higher fundraising levels in the later years.

Daniel Fannon: So all of our teams are going to be blisteringly focused on delivering for clients as the key input to our fundraising goals. So I think between now and the end of the year, we'll continue to execute on those targets, bringing us towards our 400 billion in gross fundraising out to 2030.

Call that 2028 through 2030. And again, uh, as Scott kapnick said, as bio said, as Larry said, is Raja said, uh, uh, you know, consistent investment performance is the license to grow. So all of our teams are going to be blisteringly focused on delivering for clients as the key input, uh, to our fundraising goals. So I think between now and the end of the year, we'll continue to execute uh, on those targets, uh, bringing us towards our 400 billion in Gross, fundraising out to 2030.

Unknown Executive: Thank you.

Benjamin Budish: We'll go next to Ben Budish with Barkley. Thanks so much for the question. So our main focus right now is fully integrating our acquisitions and realizing the plan synergies. It's about delivering great integration experiences for all of our clients that are seamless and our employees. I think as we've shown in our results, we don't need M&A to meet or exceed our organic growth targets. We were doing that before M&A. And now we're running on the trailing 12 months at 7% organic base feed growth. So these capabilities are helping us lift through our targets. So we're going to continue, I think, to be very prudent, selective, tactical with our capital and financial position and in how we look at M&A.

Thank you. We're going next to Ben, budish, with Barclays.

Speaker Change: Hi, good morning, and thank you for taking the good morning. Uh, thank you. Um, maybe just another follow-up on the private markets, uh, strategy. So you announced to the acquisition of elm tree, a smaller tuck in, but just curious. How are you thinking about inorganic opportunities? Um, is this sort of a, an acquisition that had been on your radar? Is it something that sort of that you had been seeking or or came across your desk? Um, you know, how does it kind of fit in and should this be indicative of, you know, maybe future m&a, or do you feel pretty good about, you know, the the asset, uh, that you have today as they are? Thank you.

Ben Budish: Thanks so much for the question. Um, so our main focus right now is fully integrating our Acquisitions, and realizing the plan synergies. Um, it's about delivering, great integration experiences. For all of our clients that are seamless and our employees. I think, as we've shown in our results, we don't need m&a to meet or exceed, our organic growth targets. We were doing that before m&a. Uh,

Martin Small: We've made several smaller tactical acquisitions to bolster certain areas of the business. The planned acquisition of Elm Tree, which we're very excited about, which brings triple net lease, the intersection of real estate and credit, which we think is very germane to our insurance clients and our wealth clients, and also previous acquisitions like Creos in growth oriented lending and SpiderRock, which helps extend our capabilities in SMAs. We also announced a minority investment in Beridium earlier this year, which also I think is accretive to private credit and alternatives. So these acquisitions alongside with our minority investments, they bring incremental capabilities to better serve clients and generate attractive shareholder returns.

Laurence Fink: And so as I said investor day, I think because of large scale M&A in the near to intermediate term, we've rounded out that agenda. We're going to continue to look at things that we think are complementary in terms of capabilities across private markets and technology. I would just add a few other things that We've been building a bit organically. and the opportunities we see, we believe fundamentally that every country in the world is going to be attempting to build out their own capital market. I see the success of the United States. One of the great reasons of the US position in the world today is having a strong banking system and a strong capital market system.

Elm tree which were very excited about which brings triple net lease. The intersection of real estate and credit which we think is very Germaine to our insurance clients, and our wealth clients. Uh, and also previous Acquisitions like Creos, uh, in uh, growth oriented lending and Spider Rock, which helps extend our capabilities in smas. Um, we also announced uh, minority investment in bid, uh, earlier this year. Uh, which also I think is a creative to private credit and Alternatives. So these Acquisitions alongside with our minority Investments, they bring incremental capabilities to better, serve clients and generate uh, attractive shareholder returns. And so as I said investor day uh I I think because of a large-scale m&a in the near to intermediate term. Uh We've rounded out that agenda, we're going to continue to look uh at things that we think are complimentary in terms of capabilities across private markets and Technology.

Ben Budish: I would just add a few other things that, um, that we've been building, that's a bit organically.

Ben Budish: and the opportunities we see if if we believe fundamental is that every country in the world who is going to be attempting to build out their own Capital markets,

Laurence Fink: We talked about this yesterday. But the what we saw in India and what we're trying to do and bring out, you know, bring out and expand its retirement system platform. is a good example of the expansion. of a Global Capital. Yesterday, we had a conversation with another very big, you know, organization in a strong position in a growing, developing country with huge opportunities to do the same thing we're doing with Reliance and GeoBlack. We've already announced what we're trying to do in the Middle East and Saudi Arabia related to expansion of a mortgage-backed securities market.

Speaker Change: I, they see the success of the United States. 1 of the great reasons of the US position in the world today is having a strong banking system, and a strong Capital Market System. We talked about this in an investor day.

Speaker Change: But the what we saw in India and what we're trying to do and bring out, you know, bring out and expand its retirement system platform, there is a good example of the expansion.

Laurence Fink: So we are not just looking at Hawken. Acquisitions, but the opportunity we have to expand our position as more and more countries are expanding their capital markets. playing a bigger role in that. And I think India is just the beginning where we believe we're going to build out of a very large scale asset management platform in India itself is going to be these are the seeds that we are doing that are probably being obscured by all the inorganic things we are doing. But I, I want to just ask, you know, give you that color that we see the expansion of global capital markets as a primary driver of future success for BlackRock over the next five And having our global footprint being in a hundred different countries just gives us a unique opportunity to be working with more and more governments worldwide and helping them think about how they expand their capital market and how do they expand their own pillar three retirement system.

Of the global Capital markets yesterday. We had a conversation with another very big, you know, organization in a strong position in, in a growing, uh, develop developing country with huge opportunity to do. Same thing we're doing with Reliance and Gio Black Rock. Um, we've already announced what we are trying to do in in, in the Middle East and Saudi Arabia related to expansion of the of a mortgage back Securities Market. Um, so we are not just looking at how can um, Acquisitions. But the opportunity, we have to expand our position as more and more countries are expanding their Capital markets and playing a bigger role in that. And I think India is just the beginning. Where we believe we we're going to build out a a very large scale Asset Management platform. In India itself is going to be. These are the seeds that we are doing that. That our, our, our probably being obscured by all that inorganic things we are doing.

Laurence Fink: As a leader in retirement, this is a conversation we're having with everybody. And, you know, I mentioned in one of the prior questions related to what's going on in Netherlands, moving from DV to a hybrid DC, these are all big changes, but they present huge and unique opportunities for BlackRock. And so, you know, inorganic opportunities are still going to be, if they're complying, we will still be doing those types of transactions, especially tuck-in areas in private markets or tuck-in in technology, but the opportunity to grow organically as a capital markets grows worldwide is huge.

Uh, but I, I want to just ask, you know, give you that color that we see the expansion of the global Capital markets as as a primary driver, a future success for black rocket over the next 5 years. And having our Global footprint being in a 100 different countries, just gives us a unique opportunity to be working with more and more governments worldwide. It's helping them. Think about how they expand their Capital Market. And how do they expand their own pillar 3 retirement system as a leader in retirement? This is a conversation we're having with everybody. Um, and, you know, I mentioned in my, in 1 of the prior questions related to what's going on in Netherlands, moving from DV to a, to a hybrid DC. These are all big changes but they present huge and, and unique opportunities for Black Rock. Um, and and so you know, inorganic opportunities are still going to be. If they're complying, we will still be doing those types of transactions especially

William Katz: Something that we are very excited about over We'll go next to Bill Katz. Great, thank you very much for taking the question. Good morning, everybody. So maybe switching gears a little bit, just thinking through from here, in a world of consolidating the recent transactions and being, quote-unquote, more prudent going forward, how do you think about capital returns? It seems like you're going to be generating a ton of free cash flow over the next several years. Just try to think through the interplay between dividend and buyback and maybe the total payout ratio. Thank you. That's something that Martin should...

Speaker Change: Tuck in areas in in private markets or tuck in in in technology uh but the opportunity to grow organically as a capital markets grows worldwide is, is something that we are very excited about over the next 5 years.

Bill Cats: Thank you. We'll go next to Bill cats with TD count.

Bill Cats: Great. Thank you very much for taking a question. Good morning everybody. Um, so maybe just Switching gears a little bit just thinking through excuse me from here in a world of consolidating the uh recent transactions and being quote unquote more prudent going forward. How are you thinking about Capital returns? Seems like you can be generating a ton of free cash flow over the next several years. Just trying to think through the interplay between dividend and buyback and maybe the total pay ratio. Thank you.

Bill Cats: Bye.

Martin Small: Hi, Bill. Thanks so much. Appreciate the question. Hope you're having a great summer. As I mentioned at Investor Day, and again, a little bit today, our capital management strategy continues to be to invest first in the business, and then return cash to shareholders through dividends and share repurchases. We repurchased $375 million worth of common shares in the second quarter, and expect to purchase at least $1.5 billion worth of shares for full year 2025, subject to market and other conditions. Our share repurchases, again, they're an output of, rather than an input to, our capital management strategy.

Martin Small: We invest first, and whatever falls out is the shareholder return. I'd say on dividends, we recognize very much that dividend income and growth is an important part of many of our investors' portfolios. We continue to target a dividend payout ratio between 40% to 50%, and over the last five years, we paid an average of 50% of our gap net income in dividends. We've steadily increased the dividends since we started in 2003, and over this time, our dividend per share has grown at a CAGR of over 15%. Over the last five years, we've paid on average 50% of our gap net income in dividends, and our dividend payout ratio is intended to ensure that the growth in operating and net income under our 2030 strategy that we talked about at Investor Day will translate into commensurate dividend growth at high single to low double-digit rates.

Martin Small: And as I mentioned at Investor Day, and I'll say it here again, to avoid the payout ratio impact from the non-cash amortization of acquisition-related intangibles, we'll adjust this amortization when calibrating our dividend to the payout ratio. But again, we think that the 2030 strategy that we discussed at Investor Day should translate into dividend growth at high single to low double-digit rates.

Mark another conditions. Um, our share repurchases, again they're they're an output of rather than an input to our Capital Management strategy, we invest first and whatever falls out uh is uh is the shareholder return. Um I'd say on dividends we recognized very much that dividend in uh dividend income. And growth is an important part of many of our investors portfolios. We continue to Target a dividend payout ratio between 40 to 50% and over the last 5 years, we paid an average of 50% of our gaap, net income, and dividends, we've steadily increased, the dividends, since we started in 2003, um, and over this time our dividend per share has grown at a kegger of over 15%, uh, over the last 5 years, we've paid on average. 50% of our gaap, net income and dividends, uh, and our dividend payout, ratios intended to ensure that the growth in operating and net income. Under our 2030 strategy that we talked about at investor day, will translate into commensurate dividend growth at high single to low Dibble, d double digit.

Bill Cats: Rates. Um, and as I mentioned at investor day and I'll say it here again to avoid the payout ratio, uh, impact from, uh, the non-cash amortization of acquisition related intangibles will adjust this amortization when calibrating our dividend to the payout ratio. Uh, but again, uh, we think that the 2030 strategy that we discussed at investor day, should translate into dividend growth, uh, at high single to low Dibble, digit rates.

Unknown Executive: Thank you.

Brian Bedell: We'll go next to Brian Bedell. Thanks. Hi, good morning. Thanks for taking my questions. Just if I can maybe switch gears a little bit to iShares and Europe and fixed income in particular. If you can just talk about how you're continuing to see strong organic growth in the fixed income iShare franchise. Maybe if you can talk about where you see yourselves on the long-term development of substitution of fixed income securities for iShares ETP. And then especially in Europe, I think you talked about this at Investor Day, you see pretty strong growth potential as Europe democratizes their retail investor base.

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

Unknown Executive: How do you see that progressing here coming into the second half? And do you see that more just on the equity side or the alternative iShares or also on the fixed income iShares? So. Thanks for the question. More growth, more people using iShares, ETFs along I think it's important to think about the active side of the world alongside of active, using the wrapper for hedging purposes. Just more and more and more use cases that we are seeing. And it is really caught on in Europe now. primary wrapper and market to be involved in. So we continue to show industry leading results.

Right. Thanks, thanks. Hey good morning. Thanks for taking my questions. Um, uh, just if I can, maybe switch gears a little bit to I shares. Um, and, and your, uh, and and fixed income in particular. If you can just talk about, um, how you're continuing to see, you know, you're continuing to see strong organic growth in, in the fixed income. I share a franchise maybe if you can talk about where you see yourselves on the, um, on, on the long term, uh, development of substitution of, um, you know, of of, of of fixed income securities, uh, for, you know, for I shares ETP and then especially in Europe. Uh, I think you talked to, you know, about this investor day. Um, you see, you know, pretty strong growth potential as, uh, you know, Europe sort of democratizes their retail investor base. How, how do you see that progressing here coming into the second half? Um, and you see that more, um, just on the equity side, um, or the alternative I shares the order.

Brian Bedell: We're also on the fixed income. I share side.

so, um,

Unknown Executive: We have the number one share of global ETF flows year to date. As the iShares and the ETF become the vehicle of choice, and we're the industry leader and probably have the most diversified offering of any That diversification is reflected in our organic revenue, which is nearly three times the next largest issuer and inflows where 38 iShares products had over 1 billion of net inflows this quarter. So that diversification is working for us. We're seeing outsized strength from our highest conviction growth areas like fixed income, active, now digital assets, and European listed ETF. and Martin mentioned before, bond ETFs led the way.

Brian Bedell: Thanks for the question more growth, more people using, uh, I shares, uh, ETFs along, uh, the active side of the world, alongside of active, using the rapper, uh, for hedging purposes, just more and more, and more use cases that we're seeing and it is really caught on in Europe now, and as a primary rapper in Market to be involved in. So we continue to show industry-leading results. Uh, we have the number 1 share of global ETF flows year to date.

As the I shares, an ETF become the vehicle of choice and where the industry leader and probably have the most Diversified offering of anyone.

Brian Bedell: That diversification is reflected in our organic Revenue which is nearly 3 times the next largest issuer and inflows. Where 38, I shares products head over 1 billion of net inflows, this quarter so that diversification is working for us. Uh, we're seeing outside strength from our highest conviction growth areas. Like fixed income active now digital assets and European listed at

Unknown Executive: $44 billion followed by digital assets $14 billion, active ETFs $1.1 billion, and precision and other at $1.8 billion. Europe, as you highlighted, saw 29 billion of net impact. So we will continue to evolve our ETF business and increase access to all kinds of markets more efficiently, more transparently and conveniently. So this is a business that we continue to capture the flag globally, and also help our clients expand the use of that product to areas that we didn't think of that were responding with solutions to our clients. Let me just add a few more things. as the European markets evolve and change.

And Martin mentioned before Bond ETFs, led the way at 44 billion dollars followed by digital assets, 14 billion active ETFs, 1.1 billion, and precision and other at 1.8 billion Europe as you highlighted. So 29 billion of net inflows. So we will continue to evolve our ETF business.

Brian Bedell: We didn't think of that we're responding with Solutions uh to our clients with this wrapper. Let me just add a few more things.

As the European markets evolved and changed.

Unknown Executive: is regulation really focused on? beginnings of access to ETFs in Europe is only Europe is five, six years behind the United States in terms of access. It's just all evolving now. iShares is about a trillion dollars in Europe. 40% market share. and we are. In a position now, especially in like countries, as we said, changing away from defined benefits and defined contributions in Europe, you're going to see more and more of the financial advisory organizations of Europe. You're going to see more and more of the digital organizations in Europe, adapting more and more ETF based strategies.

Um, and as regulation really focused on

Brian Bedell: Uh Generations.

Brian Bedell: uh, the beginnings of uh,

The access to ETFs in in Europe, is only just beginning.

Brian Bedell: Europe is 56 years behind the United States in terms of access. It's just all evolving. Now, I shares is about a trillion dollars in Europe.

40% market share.

Brian Bedell: um, and we are

Unknown Executive: Similarly, as we've seen in the United So we believe that Europe is just starting to launch the same type of growth rates that we saw in. the adaptation of ETFs. And if you now intersect the role of digital ETFs. To me, that is creating more and more enthusiasm, more access to ETFs, more interest in ETFs. And as I said in my prepared remarks, we're seeing more and more clients who first started using ETFs for IBIT are now looking at ETFs and iShares as a vehicle to expand way beyond their first entry into a digital world.

In a position now, especially in like countries, as we said, changing away from defined benefit to Define contributions in Europe, you're going to see more and more of the financial advisory organizations of Europe. You're going to see more and more of the digital organizations in Europe, adapting more and more etf-based strategies. Similarly, the as we've seen in the United States. So we we believe that, you know, Europe is just starting to launch uh, the same type of growth rates that we saw in the United States in terms of the adaptation of ETFs. And if

Brian Bedell: you now intersect the role of digital ETFs,

Unknown Executive: Platform. So we're very well positioned.

Uh to me that is creating more and more enthusiasm, more access to ETFs more interest in ETFs. And as I said, in my prepared remarks, we are seeing more and more clients who first started using ETFs for ibit are now looking at ETFs and I share as a vehicle to expand Way Beyond, um, their their first entry into a, a digital, um,

Unknown Executive: And I look at the opportunities in Europe, similarly to the type of growth rates we saw in the US over the last five Thank you.

Platform. So, we're very well positioned. Uh, and I I look at the opportunities in Europe. Similarly, to the type of growth rates we saw in the US over the last 5 years.

Patrick Davitt: We'll go next to Patrick Davitt with Autonomous Research. Hi, Patrick. Hey, good morning, everyone. Thanks. You touched on this briefly, but Stablecoin is obviously top of mind for many investors on the back of Circle's IPO. And you're managing that money has been a strong boost to those flows for you. So through that lens, could you speak to how you see what looks like a fairly significant emerging opportunity for asset managers to manage these reserves? Is there a pipeline of other potential mandates like the Circle one? And then finally, within that, maybe some color on why these platforms can't or don't want to just invest in treasuries directly versus using your money funds or other people's money funds.

Speaker Change: Thank you. We're going next to Patrick David with autonomous research.

Patrick David: Hey, Patrick.

Laurence Fink: Thank you. Yeah, I, in my world tour, working with Central Banks and Regulators. Conversation about Stablecoy . is vibrant right now. And so what we are going to see is more competitive type of stablecoin. They may have some role in diversifying away from dollar as we digitize more and more currency. But the opportunity for BlackRock in a role in both. stablecoin or all the entire role of tokenization of financial tokenization of real assets like real estate is going to be the future. And we believe more than ever before that we are as well positioned as any organization in the world to do so.

Laurence Fink: Part of the conversation is that stablecoins are going to be growing and developing. Related to... Buying money market funds or being, playing a role as the manager, those conversations are broad, but if you're going to show that a stable coin truly is a substitute for a currency, it must be invested in those currencies-bonds. And so, you know, I would hope that that will remain as a consistent feature of each and every stablecoin. And I believe that is going to be one of the big issues. There's, there's questions, you know, remaining with some other stablecoins as to what is the collateral backing some of that.

Laurence Fink: And, you know, if we're going to put our name associated with it, we believe each and every stablecoin should be invested in short term government bonds of that backs that stablecoin. We want to make sure it's legitimatized, but it's also safe. And it's a great digital substitution for each and every country's cash as a cash substitution. And I think that that is going to be moving very rapidly. But it is it is surprising, even to me, the dialogues that we're having with central banks and how they are looking to now use their own digitized currency or using stable coins to digitize their currency.

Unknown Executive: And so we believe this is just the beginning. And we will be playing a significant role as stable coins are developed in each and every country. They believe it will fit the needs of their own monetary policy and their policies related to their capital. Thank you.

Operator: Ladies and gentlemen, we have reached the allotted time for questions. Mr. Fink, do you have any... Everyone, thank you. Have a good summer. Enjoy the quarter. Bye-bye.

Operator: This concludes today's tele