BLK Blackrock

Chris Meade General Counsel
Gary Shedlin CFO
Larry Fink Chairman and CEO
Dan Fannon Jefferies
Craig Siegenthaler Credit Suisse
Ken Worthington JPMorgan
Glenn Schorr Evercore ISI
Alex Blostein Goldman Sachs
Bill Katz Citigroup
Call transcript
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Good morning. My name is Maria, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the BlackRock Incorporated Second Quarter 2020 Earnings Teleconference.

Our host for today’s call will be Chairman and Chief Executive Officer, Laurence D. Fink; Chief Financial Officer, Gary S. S. Robert President, Shedlin; Counsel, General Christopher and J. Kapito; Mead. have background noise. lines been placed any prevent to mute on All After remarks, the period. question-and-answer speakers’ there will a be [Operator Instructions] Thank you. Mr. begin may conference. you Meade, your

Chris Meade

Meade, BlackRock. Thank General I’m morning, you. Chris Good Counsel of everyone. the

the statements. Before we to We number this may, like BlackRock’s begin, call a course, your we make from forward-looking the of course fact actual that may that remind call, of of you I’d during these statements. attention differ to results

with reports results the which you differ know, and filed As undertake update that today. the has of does some cause materially say to factors duty any of SEC, the assumes we BlackRock list to no forward-looking BlackRock not from statements. may what BlackRock

So, with that, I’ll turn it Gary. over to

Gary Shedlin

and present morning pleasure families of good second quarter are my It's in results environment. healthy I and the the Chris hope in to XXXX. everyone. current remaining Thank everyone their for you, safe

over our his it offer to to and turn performance I results. financial Before Larry review I'll comments, business

our to While primarily BlackRock's we both results. and financial as-adjusted employees, matter differentiated as-adjusted on be built and of ability I to operate, a environment, market resilience GAAP of for the been the investing consistently will our no is with for shareholders, business communities our has results, the which in mindset focusing clients, the which release deliver model, earnings testament purposely a discloses long-term.

these strength technology, the throughout best-in-class diverse quarter performance risk investment scaled by Our supported of is rigorous second model, global a and COVID-XX the including result management. business crisis, results, direct of the capabilities,

fifth their generated than fixed in from advice positive ever growth, as and in consecutive strategies deeper to ETFs total management fostering is hear and to and fee and BlackRock Organic quarter, category this again continued Equity, $XXX and solutions. re-risk base clients BlackRock iShares X% Momentum organic product continued the reflecting into organic second meet billion cash once Active income to reflected want also flows and record flows in annualized asset in alternatives. of long-term XX% flows needs. solutions-oriented quarter approach more illiquid clients now investment for net BlackRock. leadership growth turned sustainable of portfolio whole growth Our partnerships,

quarter million rate, billion and rose capital May our a Non-operating to the primarily of ago, quarter. on by $X.X share our associated count driven in and unhedged by current XXXX increased $X.X reflecting revenue in minority a compared Second income incremental XX% maturity. gains Envestnet and debt the of also interest results expense also net of diluted lower of year-over-year Earnings the was operating income, share a included $XXX X% effective higher XX%. successful tax pre-refinancing reflected up billion lower with investment non-operating quarter mark-to-market $X.XX income, per year seed for investments and stake of

Our quarter XX%. as-adjusted tax rate was approximately for the second

guidance estimate We of the items additional on as rate tax to reasonable previously that remainder effective XX% differ actual projected non-recurring continue tax may a is and issuance XXXX, though for tax consequence discrete legislation. rate of or enacted the of a

due driven revenue up higher as negative and and the this from we of long-only lows $X exchange higher generate funds, Since growth and reflecting reflecting clients by to movements our strategy and we global prospective strategic despite recovered eFront, from our revenue has from us services equity rate to movements year. momentum quarter committed XX% hedge in XX% deeper plan the significant in the alternatives the last were ever current lending of revenue acquiring driven overwhelmingly relationships better impact than by securities balances enterprise of products. seen foreign second remain and financial Aladdin offset Technology positive. on market well to average ago, revenue in feedback clients, leverage partially the risk and crisis revenue entry organic mid-teens down X% executed quarter increased of higher first quarter year-over-year positive lending of Since from strong spreads. average low half been Sequentially, new fund average declines technology foreign with Securities impact primary underscore XX% hedge a fee our team revenue, robust the the growth services performance acquisition, of pricing solutions. quarter, functionality. a loan May and of to AUM. in million and alternative driven to we have over second need the Second the quarter for which and beta X% primarily increased increased on long-term, changes end decline points clients, existing and own eFront which more and fees The $XXX on base Performance exchange year-over-year impact of in higher and continued by products. X.X and positions first rate. the single certain impact securities have lending in cash basis and growth billion sequentially, management of AUM The of as effective integration and were fees quarter organic of saw reason the by the operating of from sequentially base performance fees technology impacts certain Aladdin's year. year-over-year, equity second fees operational March We XX% closed expansion higher beta also year negative primarily was our on divergent

compensation, $XX by earnings in our expense. higher reflecting Advisory quarter in down be $XX reflecting up stake part lower contribution the following and successfully extended near-term essentially was was G&A million expense part since sales equity last cycles by the driven was PennyMac incentive and mentioned million product revenue base due driven well contingent deal year-over-year, in million method G&A transition absence year-over-year, first go-lives environment. and may despite $XXX foreign and compensation revenue over prior the primarily adjustments, was other contracting of amounts compensation impacted higher lower fees. benefit million assignments. charitable exchange Employee non-core implementing fee sequentially, as in management re-measurement, Total and equity periods. fair including expense of as sequentially, the and expense and down legal costs remaining consideration current the expense, to and primarily flat as year-over-year $XX G&A higher launch performance of growth began, by X% prior pandemic quarter Aladdin XX of significant value in in However, and

and by in we to impact and communicated At several sustainability million asset $XX data, the market for with of associated current levels. T&E versus G&A full reduced initiatives, increase the continued incremental investment Second impairment quarter comparable dollars levels. a fixed be the G&A XXXX approximate expenses and for of of to would the eFront COVID-XX, of expect lower acquisition. also core included expectation XXXX related an in In meaningfully comparable $XXX environment, X% million, higher in core including an in to expense versus technology we X% expense which XXXX driven levels, G&A year present, pre-pandemic given levels January, G&A million costs expense closer year reflected

and in up XX.X% most organic G&A remain basis margin the operating margin points quarter. aware to way year the as-adjusted growth primarily committed We reflecting a from XX current ago, in was of efficient quarter optimizing second expense Our lower possible.

growth strategic solutions. illiquid and well as to driving and be plan creating alternatives, focused portfolio long-term sustainable iShares, continues Our technology, on investing as whole

in to better Larry, hear As in second have from more differentiated positioned year. we mind, restart generating continue the to been With to this we you that selective deliver half growth. never of expect clients and will for hiring organic

cash then shareholders dividends business through Our and a in combination repurchases. capital excess management first, invest to return strategy remains share to our and of

of partnership $XXX the coupon year. repurchases a to share offering rates, due During per $X.X company, the but of which our both by liquidity completes In for earnings who interest environment, publicly during low debt and quarter XX-year from we in of our In effectively and connection BlackRock's PNC new opportunistic $XXX take X.X% our arise. a attractive our position tenured are the $X.X the the plans culminating our BlackRock secondary of financial significant directly repurchased BlackRock of the coupon, firm. new largest entire XXXX, through notes offering, relative successfully stock increase issued humbled and from at We welcome we've BlackRock's lowest many PNC transaction a of completed shares was shares pre-refinance evolution for now of dividend billion commitments with our billion issuance XX-year million successfully secondary remain XXXX. reaffirmed and late U.S. our advantage to its notes call, with sale, issuer. level debt April, May and And X.XX% to XXX% opportunities price in current we'll historically repurchase first a This the XX% in In commitment $X.XX should and a coupon dollar targeted May, lowest number in total, valuation investors participated company. a shareholders ever billion worth of share of its XX-year monetized common to in second the stack the a completing year, repurchased we share. held with we longest

by continued illiquid iShares systematic index billion, Inflows record funds. and Institutional nearly LifePath that than to billion net billion fixed active annualized are event-driven stress in representing asset inflows, in in international. Many growth overall $X retail Target active also our the sustainable source billion appetite solutions, inflows have access, a outflows despite secular OCIO, the driven Institutional prime during that have in period quarter, base BlackRock's iShares growth event-driven that ETFs continues growth quarterly market of investor investor following $XXX resilience investor billion strategies, generated increasing and the iShares organic earlier significant confidence product inflows hear performance iShares quarter a ever future outflows of strategies, annualized driven net strengthened second XX% want institutional liquid of favor a hedge income sheets strong We with us sustainable offset than trends XX% connected and globally billion reinforce net was and growth strong before, with led into now equity, organic iShares BlackRock continue of recent net quarter, Retail and to fixed of to net fee the the asset unique alternatives $X ETFs the of and to Momentum the quarter, equity with by these market ago, investing use partially that through organic growth, coupled reflected net in of year. our platform. base in and challenging the lead more we AUM weeks, Date and this of crossed in representing we ETF, active corporate clients XX Funds, investment are approximately our globally suggest ETFs these iShares this quarter, the in reflected from were bond, in outlook inflows fees. billion ETFs. by a past solutions environment of year and from category. outflows for led $XXX performance second demand now exposures, in also more of $XX positive trends across offering further has instruments that witnessed to management net $X fixed differentiated this $X strong and market were institutions stronger scaled for infrastructure, platform capital the equity, line by alternative deploy its as now and and Over second billion renewed $XX fixed in result net income alternatives portion inflows U.S. income income, currently to in back fixed precision in billion fund. in inflows high-growth by growth of inflows. billion been us and billion the strategies, more catalyzed continued and by the growth to variety the annualized goal of allocation first growth growth income. even $XX Year-to-date, decision. $X driven who conviction approximately of sustainable Organic a of has quarter. fixed technology offset representing approximately ever. from balance quarter. second the $XX equity tactical for with second driven growth integrated liquid by advice as private acted clients of income international XX% in disruption funds. a significant clients and strategic by long-term for been inflows acceleration A by liquidity clients of illiquid performance $XX for remain primarily primarily in cash during high-yield both committed and of flows of committed of ETFs alternative institutional and of current and net and driven strengthen in their

above thresholds, fees waived we funds on relevant flagship As not government gross yields have to-date. have remained

half year. However, be we the may of expect during implemented potential fee second waivers the

partnerships and The with breadth crisis. for serve a diversification reflected group. primarily quarter Revenue were in asset environments again playing our investments Finally, advisory stakeholders of primarily so demonstrate income to linked once continue resilience the managed of deliver shareholders, the able item $XX and this us and and importance of long-standing our to to assignments turn of With clients, revenue advisory financial other the offense, and it time. these over our by of to that, BlackRock's over positions during second our quarter we results of and is are in we statement. business platform, deep to second of markets I'll have linked highlight line our underscore made variety Larry. employees, advisory purchases net the clients, after both to billion inflows value

Larry Fink

everyone, a Thank morning, be you you, and people. Good this for call. know continues difficult I time thank joining for to many the Gary.

foremost, and first staying So, all safe. I hope are and you healthy

they portfolios. worked dependent more asset distance and and a BlackRock's contextualized timely, Insurers savings, has sharing resilient strong declining clients the all many across dual around our it their rebalance liabilities markets This are clients environment. technology our meet people meeting through harder at future. and comprehensive are environment. the to make turning context sense having impact portfolios policy way. build Individuals our with period. has them face accordingly. BlackRock. now us which even in sharp hearing fiduciary unified I'm already becoming are all increase sought and are increasingly build low-rate this as from and to and geographies, a culture all months clients to this allowed while uncertainty understand values. home, clients investment platform for demand economic of Our to increasingly for to operating I all our see and clients in Across many about them actions, underfunded these time it payouts analyze more serve worldwide. the this Pensions, have insights challenging segments, prolonged maintaining ever BlackRock and an than of turbulent BlackRock's connectivity. people's strategy from retirement centered ones. the their more adapt of isolation persistent even with is the are loved dealing on our connect their I also desire indicators, solutions have delivering their this that friends to been technology People in help feel need

a are BlackRock greater ways assets organic entirety fee result, with clients and ever X% generated BlackRock growth more for growth. their $XXX representing organic We more inflows through the And share BlackRock than before. quarter, of billion second are in deeper the entrusting bringing base XX% clients asset the platform as of partnership. a in net together in a

over will but still Therapies now that away. we and continue remain our business. severe. we a It employees more only difficult forward-thinking not time COVID-XX infectious. to essential human client future. our was of in and ever, months to times, support elusive, our communities to highly clients platform are these truly build toll business than to compassion through to critical virus Our The to meet this of is positioned is because the and vaccinations invest be made serve client-centric The demand investments to continues shareholders, be

loss, to jobs shutdowns have human comparable who lost income. pressures devastating been to month-long the those their economic are and have While not

past few virus some Despite government the countries, historic these the have fragility fragility successful between record the by optimism market. forced been markets choices the leaders and for even example, has a as are recovery space. their given infrastructure, and this emerging have investor The market and banks financial fueled pace of to XXX, more again their stemming weeks, in the of backdrop, reopening bounced healthcare measures approaching In and the of been XX% These March Over inevitable fears. policy more economy. measures, monetary make choices its have economic the high. the systems, difficult world's of fiscal in than rebounded has S&P once is and with central in stimulus combined anticipated since lows limiting back the governments lack unquestionably

to are of heartened toll management. lingering the including our we than and local governments causing in this to life normalcy. offices more and remain its BlackRock today. in needs including is BlackRock income capabilities investors discovery are, -- permanent transparency, the to remote price their provide societal congestion work and and improve people of with extreme year. the portfolio to cash operations during industries, to the discovery about must national pandemic, and for for companies a liquidity wealth the turn York first and their as periods the return people. clients driving potential uptake more grapple economies it from safety, relevant and and out turning the leveraging for positive cities Monday. critical environmental time, ever half impact provided and to which Aladdin of change of have and as full and more path use enabled by clients designing return this optimistic real divergent. scaled and asset operate are in positive the home. its to billion a them management of hopefully, this the meet of more and of if price pandemic employees clients and eases stress. in to to as City changes cautiously partners And same technology as with from on And catalyze implementing the begin BlackRock they crisis, clients has coming institutional be financial of adopt proven BlackRock's where have to ability will office New liquidity, be our whole a recovery, with our in remain $XX have will us economic many platform more will begin I'm More somewhat before is At inflows market you client exasperate ETFs quality be Clients changing will We in and equality seamlessly suffering speaking help, from split wealth despite portfolio. our for uncertainty solutions. our iShares to to resilient There breadth I

of client-centric managed approach and models drove $XX Our in solutions. CIO inflows year-to-date billion BlackRock net outsourced

results. resonating of and depth strong in culture the fiduciary of our our Our relationship is the strength

high-yield across the flagship quarter, platforms, New globally for world, net to they insights mutual with adviser the FMA's the York led Federal deepening supported our and trust were by billion by demand Strong generated alpha around back our active information. advisory median As to broader top financial these another assets taxable we Bank, active in positive of period. equities. and a inflows, equities also have and in on once financial time create is deliver whole have with of work insight the global and and the Across Reserve markets active BlackRock Asia-Pacific. we generating reflection equities over inflows $X active that peer and are of including regulators five advisers and executing and informed our seeing of team the analytics, again billion and as support with are technology, consecutive ability to called our performance States, the the risk-taking with of our opportunities $XX quarter benefits our BlackRock's markets seeing both of income around franchises and were health a XXXX, programs is wealth net above number the for in a funds, better work distribution we evolve upon culture active a world has inflow United bonds, which a fundamental with generated public. second and BlackRock's clients investment direct momentum Volatile Flows extends of the These our record to global governments economy fund result doing Europe, an institutional reach. were the fixed retail today are platform been more portfolio are a the trust to governments global serve -- the and past the as they times of managers crisis, data, testament The XX% drove in partnerships three-year for top-performing assignments performing products, reach, culture. our retail solutions. partnership across turn scale types fifth science and BlackRock's is benchmarks recent of for and across to technology earned

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to one we Aware our the $XX it together ESG. strategy, year, launched allocation year, last was we LEAF Fund other example, than Environmentally first incorporate of For year, money or Liquid XXX have market fund with launched and In when we grown to Last now the billion. more three-year it kind of of launches, ESG four asset first the ETF way quarters three our their ESG iShares commitment offerings. has ETFs, towards

better within for and risk. developing We also to better sustainable on Aladdin data focus need are to address the technology data climate analytics

fast-growing focused sustainable We of are this we anticipate in under investing will by area. decade, management trillion continue end the the and assets reach $X on BlackRock's to

of by as forward $X alternative local uncorrelated benefit asset assets driven not for we will manages the quarter, investors, investment billion growth partnering to which community be for market such demand in in individuals now return operations, illiquid a a inflows ahead this the increased to duration look look diversified and development, who jobs Infrastructure driving our strategies seeing Infrastructure We sources $XX and are economy. but generated for has infrastructure We to component investments only of purposely the restarting solutions. equity private class. billion over clients and private to meet commitments team, global in key of on in work as more liabilities. clients client their look BlackRock long create we with built maintenance assets. infrastructure

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of [Operator comes Instructions] from Our you. Dan the of Fannon line question first Jefferies. Thank

Dan Fannon


Larry Fink

Good morning Dan.

Dan Fannon

Good morning. talk quarter? about expand My saw question's could outflows some strength around management of flows, where if asset you the in you then also equities and the active upon

Gary Shedlin

thank Dan. you, So,

critical index that to portfolios much return. You we returns. managers drive alpha portion on more outcomes, of And investment and as all even environment, management to more potential is return have are the decisions total know in both lower seeking active greater and that clients focus believe a asset alpha generation deliver active as a

performance for with critical strategies in active clients, building after portfolios efficient So, strong fees. a role have

top access positioned top sciences periods. BlackRock with for billion performing data active have growth active inflows in our into fixed a for and generation. net volatile portfolio months. solutions been billion technology, the we've information we've and capture equity second arrived. right about have of market that in of driven that alpha equity a and Larry quarters three the growth performance. and outperformance, The offering several and In us years; strategies the three distribution deliver type were in billion scale, our equity $XX $X unique the of the billion quarter the performing XX three-year performing periods; five equity, $X lot and optimization demand cash. value, investment $X array opportunities franchises, net Aladdin, in including inflows construction, cap active globally, index the consecutive record large net we Now, in is five by of of investment has industry's for five-year appreciation leveraging our drive and the inflows mentioned, quartile And seen seen platform capital where including relationships and top $X for performance. in portfolio positioned years and inflows of differentiated active to a supported technology to XXXX of and most to created track across platform and now and assets included of over we the integrated first flows net the construction expertise organic partnerships inflows, alternatives, as comprehensive with multi-asset, at last of our the performing health five-year decile our the It's the consistent and income, our investments made quartile quarter in client equities, has top have, that with billion And and

active institutional saw scientific we billion clients. from $X addition, In equity in flows

drive long of in-house years, high-quality the before including equity our demand Institute, invest in few positioned Investment journey. a ever past proud The over and team. investments made capture data to us and alpha sustainable incredibly we've than to better been we'll are it's we have client generation, So, and BlackRock technology continue research capabilities to the and

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look, So, that the team. global continue, our in changes know, we've we you rebuilt made allocation,

into see we We momentum our and continue continued to are to also growth OCIO we in in LifePath back franchise seeing business. inflows very return and but momentum multi-asset our Date expect that Target see that, in good

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next Credit from Suisse. of question comes Siegenthaler of Our the line Craig

Larry Fink

Craig. Hi,

Craig Siegenthaler

saw momentum see opportunity longer how And in morning, we what drivers? do well. to XQ. you But all fixed Hope were relative the with good as your Starting the think income Which ETFs, addressable as guys even about target buyers? client market groups strong you Larry. size Hey, doing key you the the then the we $X term? all trillion biggest do

Gary Shedlin

in asset obviously the been class, quarter trillion this In the of comments, under predicted that you category industry is income, last we But forward. the this our saw the year performance quarter. by already and quarter second in evenly conviction going split fixed assets strengthened ambitions is XXXX. has that a the the have in some today, this record fixed first market for mark and flows we $X strong previous of has over half as mentioned with year. Craig, in crossed And that income the And first over this core iShares of validated income double second result big And has the iShares So, between $XX ETFs. of $X.X management. growth last disruption fixed we leadership of an trillion important would and billion half

the Fixed ever usage, in more before discovery, directly, and and iShares first more extreme than competitors. have investors fixed of with income stress performed test bid/ask following liquidity, extreme underlying in So, all the kinds price better under ETFs confidence than ETFs markets the tracking, spreads quarter. income

So, are and We including asset coming as further wealth from retail Turning and the a our investors, result, ETFs. why managers, companies fixed funds, an Point, we've both performance called paper insurance institutional seen this published using all increased investors managers, provides from income which adoption demand earlier world. around week just and pension a around facts

institutional fixed income seen We and of Federal fixed insurance billion ETFs plans, income pension first attract purchase sophisticated to ETFs, become over new Even prior year-to-date. asset XX hold clients the time to have iShares buyers highly income insurance $XX these throughout managers, and Reserve companies now Federal buyers of Reserve quarter the occurring three by worth fixed first and billion purchased XX% ETFs ETFs. investors, $X in first to of the LQD plans before were the was volatile than buy net announced months more with

in we ETF manage over year XXX XXX income and this two ago. So, $XXX last up time assets from years billion today, and fixed that's

XXXX. the So, that has the ETF industry year-to-date fixed income of iShares ETFs the industry fixed the billion rest $XXX XX% gathered half over outflows inflow the flows of into faced into and with contrast first of income of this continuing

income more are all investors more to convenient So, the and ETFs that market. efficient, are transparent, access fixed types recognizing bond offer performance better more of ways

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next of comes Ken the question of JPMorgan. from Our Worthington line

Larry Fink

Ken. Hi

Ken Worthington

fallen Hi, interest ultra-low alter unprecedented There's income fixed environment to U.S. model traditional Maybe slightly to example, and morning. Good different rate good allocations. lows rates allocation, of the fixed in that XX/XX following. income for the from the fixed yields could Interest are the asset morning. direction. income detriment speculation have product U.S. taking a

does longer fixed do similar mean implications term income for think of fixed different income? for implications yields are to this traditional And are retail or allocation versus ultra-low assets? ultimately, institutional? the there what on asset So, you so, lower growth investor If of or the BlackRock

Gary Shedlin

this both fixed for billion the and meeting low see are see the fixed significant income. inflows for generated and interest for index new across RIA channels allocation and asset in income we in institutions. and and a to that models in rates, there models building it client $XX room new demand the it appetite was is platforms We also of other both for the with income. allocation active specifically a So, fixed still we BlackRock

first and we income needed pretty quarter, active were ETFs and confidence market investor grew. this second stress in the the management income liquidity strong fixed So, quarter the in fixed well-positioned. the both amid funds And following the and performance actually

area. though rates the what lower, that to were investment-grade interest saw alternative needed the into we credit an saw And we people cash. high-yield is incredible even demand So, both and

billion were of through by is So, XXth inflows retail billion flows franchise the based, flows saw that institutional retail percentile. both so Institutional billion high-yield $XX with clients, even of net broad bond net and net rates $X and in active the flagship and where were fixed our the were $X performing low; and from $X high-yield led about income inflows, we inflows a reflected of respectively. billion pretty

number other the when low comes interest Now, one rates it note that ETFs, we're franchise about is point global player. to the

in U.S. seem outside today, they been low So, have the lower U.S. of rates the but

income huge demand seeing fixed a from and from Asia for are U.S. So, Europe. we

fixed it's So, even is grow. still market all to think with that the to low relative. rates, continue I income going

needing to You way. markets, which execute a is efficient volatility more people the to lead the also going in saw to in

for alternative fixed It that. So, still treasuries I you're to be where credit, in going income. to looking just structures. But understand will people from move may


of Evercore. Our next line of Glenn comes question from Schorr the

Larry Fink

Hi, Glenn.

Glenn Schorr

are you? How there. Hello,

Larry Fink

Very well.

Glenn Schorr

Funds? you. both see to private talk to happening. and it's I and I Clearly, So, I Thank infrastructure to heard now. about build. want But comments about you equity, want Where illiquid talk about Good. I billion your $XX illiquid. focus hear. need just in Good do conjunction to inclusion Date you and the Thanks. XXX(k) for to, your And more a Target in recent that, opinion build on maybe get wanted with still private ruling little credit the side? DOL on

Larry Fink

Great question.

So, believe opportunities. every our we of very large area we I world their We're distribution continue continue and in the to the across emphasize alternatives. channels. seeing growth have grow all world different illiquid and and real to across

even going earlier, said area, continue to I opportunities some continue credit and opportunities some build we’re real to building to by equity We're continue our out see we in areas. driving teams. out -- this As and going are the of in in organically going of to in infrastructure to our private to our the be growth great

volatile hedge Our have actually board the these across done very funds times. in well exceedingly

once fund hedge again, double-digit European Our performance. a is,

Our doing be well. health exceedingly continue products science to

think a is overall recognized in so, ago, were being happening we today, as we I and space, really I alternative what five And not years think, is as participant illiquid are. the

areas. than that these the of individuals, Target we're accelerated in the And of even more our into Date Date positive asset increase to rule, this development. terms very for have in these billion, a area. five continue It well-positioned to LifePath Funds, the strategies. top access because in present in and We is franchise with we markets opportunities great related asset relationships in being growth are will be driving to Target more different the benefit categories And we obviously, the $XXX private and to DOL growth related

we are very so, And very early days. well-positioned. It's

disclosure to how position because our positioning area, Target of to strength these excited is see of in have implementation We opportunities, be business. Date to accelerated illiquid going But an we're necessary. in for us about the will and work, this our have type what

And sure we going need investing, what talking they we understand be that so, to the of associated implemented, I'm the We're need in retirement protected quite they're know as and excited have investors we with know do, about the this risk make to and type opportunity. to But how about disclosures this fiduciary, associated the to they investments. a are assets the assets our risks it. and fully that retirement clients' is ensure

move understand as mean so, going to more great starting this need are to their to And eFront there's going us look for a technology assets great And a clients' is and believe management and And across analytics. as the more different utilization be all spectrum, assets. -- these technology as to to at retirement to for our going the and a opportunity of only risk. retirement I risk clients and need areas Aladdin, in for be technology investors them illiquids risk more need is help investment fiduciary for all and as required for


next Our comes Alex Blostein Sachs. from Goldman the line of of

Larry Fink

morning Good everybody. provider morning I and for A Aladdin. Aladdin about Alex. : to specifically, guys wanted around question you Good talk

an joined gotten while, the in Citi, think haven't on a like update We little platform. but that it I looked

handful I guys BK and think with others. already of are you a partnered

would of managers asset where talk primary you the the of stands, is or potentially -- about the guys maybe kind little other a not joining still do and whether the build-out Aladdin So, provider of BlackRock customer anticipate service? of bit when

Gary Shedlin

the management the response desire by lifecycle uniquely as to as the is platform drive industry's XX-plus provider, you standardization integration for a managers along Aladdin across ecosystem. a increased investment globally, to leading as to efficiency. Aladdin created investment used So, closer positioned asset drive And was know,

servicers Aladdin to information the and asset model, the and the So, and servicer. by streamline and connectivity leverages provider asset the transparency to between working operating directly the workflows this with data manager interfaces symmetry asset proprietary Aladdin's drive

enable we of office and streamlining and clients' client quality have workflows. So, outsourcers reduction on service and capability middle and to further operating the Aladdin refinement directly improving friction provider custodians this the a models, our allows to through now Aladdin, assets the data in

providers with and to broadly, to we're grow this processing. straight-through consolidate they optionality they will in as market increase and their counterparty trading And maintain the relationships. venues, the what to that managers, clients want demand interoperability data number jobs as continue their of we systems going asset more for So, have they to do the are seeing call

to technology as for of BlackRock's management So, to This chain build possible. much value we're continuing asset long-term as part provide of this technology is the out. strategy

So, are out, lots of we this ecosystem think improve the I continuing forward. going will interest it and build to


line Our comes the last of question from Citigroup. Bill of Katz

Larry Fink

Bill. Hi

Bill Katz

much call everybody. Thank the this for taking so morning. you morning Good

of from then, money But see So, assuming in evolving the here? I probably sort moving variable potential for maybe a big given beta just the you of the picture do waivers Gary, sort question some for you the fee that rate you market that, view a all the had appreciate half. fee how neutral mentioned the biggest And of parts, is second market test.

you. Just wondering if you could help quantify that? potentially Thank

Gary Shedlin

Sure, your to hear Bill. Good voice.

to rates. So, on with I don't our anything changed fee think has really views regard

we can't control. what control we know, about and you lot As talk we a can what

rate we talked FX, before, what's a in rates many we are, mentioned we've fee as obviously, entered in as going I was so with last tied And obviously to that like. beta, a preferences as happening risk of the divergent quarter, the on fee beta, quarter down market. our in client think the in as respects, was what result and particular, And

organic the strong it's down. QX And AUM, while growth has up that XX% quarter. eliminated I news and of think good about is the had first you second the quarter as entirely quarter, and we a almost is the said, talked headwind last since markets combination obviously still

us of And despite effective entering on impact also we're quarter third points an sequentially. in which at beta was NFX decline the the the equal our primary quarter our rate, a fees. we going impact was we The we will were second higher as to reason day base know, run But entering divergent equivalent our X% as forward. about down count saw quarter estimate revenue fee quarter. fees So, second basis, lending that's X.X the higher first obviously essentially quarter third you basis negative over still that that We're probably than base rate security well. were

to growth, The we some So, is still -- significant we beta we're this positive news because some our issues. asset good still base difference organic organic saw relative that's saw there's fee in than lot growth and a a obviously products. ETFs illiquid. as some comes fee iShares Rob's fee our those. in average rate, our category. active talked in Obviously, was success this of It our our higher strategic higher about and well quarter, as

have respects been and many going think about sustainability, to continuation think we're coming can in positive fixed which those can before that of forward. continue well-positioned investing, see magnified think of extent as all products, think ETFs impacts some so where some to were watch I more out we the we incredibly very we the pandemic I push to that income I pandemic, So, we're if broadly, trends see of that going we for, the the

partners. our yet subject we On with initial other them around my maintain somewhere calls, rates the management when They have of when any three We periods and time, basis as struggled in mentioned we used to yield waiver typically conditions, fee typically to clients waved market we've And past, to I come fees. the in below tried of low But support play share point, into our haven't floors in points. waivers. previously fees. with fall yields have one distribution yield

things how on depends lot portfolios quickly is timing on And a of how portfolios quickly grow, while so obviously depending turnover.

We come into haven't that. really

fed around That's points. is fee, to XX our excess closer today points. yield in which example, an as roughly the fund basis XX is basis gross management of So

do start us. in hit to yield primary do on implement impact would anticipate anticipate fee September, flows then a -- would I'll distributors, also into which overall represents -- increasing bottom today I think market would say are that. that would I we'll our choose impacted our And rate we with we be anticipate providing XX% been waivers, point August about probably kind as also our that, those as do Fed think lessens the will this of, that impact but our be to I do looking funds. environment, low of putting think by U.S. we the continue vehicles, prime to operating be prime ball, leave see to and think so at If which of we funds, in shared things we secondary XX% current the we you you us final support we've of some or So, couple And long about support And would with line into and that to that government those government crystal waivers. just mentioned, about our those -- cash as XX% with seeing of in business. migrate there, currently, don't as people for out funds we


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

Larry Fink

in and want continued to first XXXX. thank for of the helping us BlackRock. uncertainty I the morning I of interest made everybody for progress joining am through in this and we proud our clients half that

a where quarter, long-term all all safe partnerships communities we and we work I that deep, everyone, to do have for needs. all to for in about. continue That's our governments, people meet a the and more clients, solution what fulfill growth better Thank this good dreaded to you quarter. quickly third and differentiates to start our healthy the That of It purpose. our is going experience importantly, our our to strong, innovate helping come, is hope disease. financial so and well-being. years us. let's continue have clients' and with fiduciary purpose to find we will we're with We and a you, can what so. continue to invest That we wish in We're building of generate is humanity culture our with will more


This today's teleconference. concludes

disconnect. now may You