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BLK Blackrock

Participants
Christopher Meade Chief Legal Officer
Gary Shedlin Chief Financial Officer
Laurence Fink Chairman and Chief Executive Officer
Rob Kapito President
Michael Carrier Bank of America Merrill Lynch
Craig Siegenthaler Credit Suisse
Brian Bedell Deutsche Bank
Michael Cyprys Morgan Stanley
Alexander Blostein Goldman Sachs
Dan Fannon Jefferies
Call transcript
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Operator

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 Third 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; Meade. 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 Meade, conference. may you your

Christopher Meade

General Good of Meade, I'm morning, the everyone. BlackRock. Chris Counsel

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

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

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

Gary Shedlin

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

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

earnings BlackRock's While communities continued results. results, primarily adjusted as release adjusted which serving the third employees, operate the on in quarter. our shareholders be financial we and I clients, and will as focus in focusing our on steadfast both GAAP discloses

and resilient strong and market business Our year build model, made commitment we've deliver the strength testament our the throughout to for investments of to diverse amid always and the uncertainty our the during performance quarter unprecedented the a amazing to brand, clients. BlackRock is over a employees of time

X% XX base almost $XXX inflows total rigorous capabilities fee best-in-class and generated growth. management, pairing organic over months, risk has net investment platform, now of diverse representing with broad-based the last Our billion technology

net market and to well clients vision is of fee challenges is organic generated third environment, inflows we strategic organic more their the embraced culture. growth ago a portfolio annualized and solutions, of our than Our current BlackRock X% one with annualized billion strength no decade $XXX base quarter, result resonating the a direct our representing matter ability of growth. the total BlackRock asset in ever, to whole X% over grounded address voice in and the

during clients was year interest driven pre-refinance issuance expense for our million on Non-operating with a share tax lower earnings XXXX quarter investment gains $X.XX in count results incremental a fund also quarter late and also quarter. diluted debt primarily our our associated launch co-investment Record income, by of share but September. strength platform needs. regions did year-over-year, have of As over flows the months asset last flows each and long-term revenue of third also reflected across leverage alpha $X.X active income we Not product XX capabilities. its third of help we to strengthened of the classes, the generating while rose quarter, on investment the global positive operating meet platform, see of billion quarter, only entirety XX% closed reflecting associated to effective per for markets rate XX% net non-operating the million debt XX% type positive included increased billion across our BlackRock quarter the generated and higher all ago, the Record compared of evidencing a our in successful $XXX $X.X costs $XX current styles end up seed May maturity. income and to and reflected capital, mark-to-market with second

adjusted XX%, which reasonable as for a estimate was the of fourth quarter is rate tax run the approximately third quarter XXXX. rate we Our tax projected for

additional strategic cash quarter $XX fees movements day to $XXX tightened one quarter, single were levels effective significantly reflecting last was base which as lending were and fee partially overall performance basis, XX positive reflecting our a from the performance the primarily X.X market despite once of reason strong impact from quarter platform. revenue organic up from of year-over-year on base securities fund points of services X% fees and the year-over-year quarter negative Fed's performance billion sequential during million pricing X% X% basis similar the months. fees offset Sequentially, a AUM, the growth. we on quarterly and impact the was declined quarter The certain saw base markets. asset performance increased second third changes impact in single and lost second in our strategy quarter year-over-year, fees driven of increase growth dynamics, impact by but to securities exceptional the organic the of beta a primary by in spreads in technology decline and of that lower exchange strong of million rate, of the increased lower up positive sequential year-over-year. Third annualized revenue, Quarterly Record again record X% $X.X hedge hedge also impact revenue response A foreign the in over in products. of positive money lending intervention the the portion attributable delivered significant fund to average annually feed

revenue compensation extended the BlackRock up first stake income. operating for expense was costs lower While provided the with Trust. compensation low associated up quarter $X Capital associated close contracting Allocation in the by reflecting primarily expense with over other and down in complex $XX Recall generally reporting fund committed technology operational the brought when remaining was in in increased also million revenue margin. of expense, in expense cycles we estimates categorize by other And the to the year remain been which is driven impact management the environment, and equity efficiency primarily remote current related investment adjusted has the environment from year following among million was quarter, of second the core expense pandemic. million costs G&A of with The fees our a sales higher incentive COVID-XX certain higher ago, with $XX $XX G&A the July. that with and XX% exclude expense product excludes expense. Core the increase benefit third to Demand reflecting $XX and XX% flat contribution launch COVID-XX Total we incremental risk million operating support and and earnings and technology method resilient mid-teens absence effective in year-over-year, quarter. of be has these would year-over-year, meaningfully by driven costs PennyMac by equity Advisory G&A long recent third costs our reflected to expenditures. management growth billion Employee charitable expense, in on And for part higher closed-end successful marketing of year-over-year, in higher as year-over-year launch the we and COVID-XX the the product performance technology was compensation expect to associated of T&E quarter. certain promotional where work to G&A accelerated and for we term. costs which our G&A for growth to impacted services and the essentially expense continue line items, launch including we integrated

a margin efficient to way optimizing of year and points remain the aware We XX% the the was growth most third basis in margin quarter operating up organic in current in as Our committed from possible. fees significant ago, quarter. performance current adjusted benefiting from XXX environment

to portfolio in sustainable accelerating focus iShares growth keeping of long-term whole global BlackRock plan on Our strategic at growth in alpha and becoming and markets, the investing. continues the Aladdin, heart private delivering solutions leader

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

As per a second share. of at reminder, of we quarter, the XXXX, of completed shares billion from common for the repurchase $XXX share our targeted in level repurchases PNC including $X.X

remainder did any the in of opportunistic, opportunities intend shares stock arise attractive valuation we we during repurchase While not the should year. quarter, relative third to common be of the

from As clients never insights, been better has long-term to needs. clients as investment meet help Larry, you'll positioned more deliver for our unique we to and solutions hear leverage guidance BlackRock

and XX% both fee base into annualized reflected views. institutional market and franchise, platform, strategies in sustainable Inflows inflows positive Third net cash. precision an all flows of liquid $XX higher alternatives diversity and reflected especially buyers quarter were highly internationally organic net leading Retail active billion, and base our organic equity, liquid across representing income, iShares, billion have where growth active broad-based share exposures and fee utilize $XX express strategic to fixed organic inflows these categories growth product of and as in strength in X% trading we reflecting momentum multi-asset the US market in growth continued strong – two asset X% asset and – of represent asset fixed tactical major XX% annualized income across inflows instruments organic funds. organic classes. asset growth, $XXX and growth, with billion ETFs annualized the the of iShares fee

inflows estate equities, well $X respective and continued, As previously among as illiquid in active infrastructure, billion positive technology, partner insurance assets whole made for successful inflows our mentioned, their allocation well billion client scientific equity billion medians for net closed-end above billion performance or $XX Allocation positioned were nearly active and provide fundraising team. quarter, OCIO have Overall businesses, interest inflows, driven management future billion the of investment top LifePath over source as Multi-asset BlackRock's generated also $XX BlackRock and possible of of base Trust another the remained top future institutional date for clients. of fixed in flows fund global and gross by sixth flows, committed income. approximately active We generating and industry during platform of renewed category. income alternatives Across leading we and segments, and quarter our in below capabilities net clients. top $XX we franchise in five-year broad demand for by in active continued outflows, into net alternative cash client flows period. based were In us BlackRock's to this Flows wins US by to fixed are did ability demand billion all to government a led index led active also the grow, for growth our by our with franchise activity industry of as included deploy Capital target and relevant September, strategies inflows active institutional growth as $XX across close retail net active record the approximately broader a third of and quarter. also yields liquid the of strategies. where a franchises categories on with the quantitative billion benchmarks performance equity reflecting fixed BlackRock's driven representing of peer Institutional remain quarter, as of health insights in $XX liquid the net equity, consecutive select $XX waive strong and performing clients solutions retail in strong fundamental be billion global trailing were unique third in performing $X inflows significant third choice net begin sciences of to even portfolio taxable reflecting enable multi-asset XX% the alternative product to by Momentum product continued fell variety for our of decile in growth our generated of funds. performing income client and we of $XX inflows real capital saw the representing alternatives. fees institutional thresholds, billion and strategies, fees. strategies

the While of quarter and would expect we into fees the base was XXXX. portfolios during to quarter given fee management during proactive fourth of waivers accelerate year, third minimal there impact our

is Finally, our of revenue third $X to these were managed of inflows the revenue quarter to financial advisory statement. primarily item BlackRock's line markets in group. net continued of and ahead purchases integrated linked serve Recall allows other market and advisory our consistently income assignments for again primarily reflected over With the no by The once linked advisory strength billion of us asset that results needs, responsibly term, all business that, model, to asset management technology which the to resilience and it matter validates globally of client long the stakeholders, and of I'll Larry. our turn environment. our evolve invest

Laurence Fink

I've I environment your and since and ones Gary. office safe. and per reporting everyone. days in more We're Thanks, you in long staying and productive morning, three help week month, BlackRock's the certainly as more again. run. has and working call. energizing been more clients and are for last diligently are been more and quarter thank over from New and Good about this the both earnings joining all very people, this incredibly you to loved we the back healthy York once And hope office

guidance everything to asset deal to how markets, index, with They opportunity the investors and strategic can make better the around Clients of more BlackRock the all economy about exposures. on comprehensive platforms across to BlackRock volatility. want investment for help our They before their and risks future, and solutions needs and navigate and uncertainty their global inflationary world across pandemic and portfolios. portfolios need actives that navigate and aspirations. rotation their entire market and geographies As come their deliver the resilient ever is continue are with to including looking for doing across long-term long-term positioned challenges we than classes that across the impact insights sustainability the it. pressures is and the on clients

of all serve our one by better. unified by culture is technology to All and unified this clients platform, one

has purposely deeper We growth through fiduciary management of both last X% developing industry. us inflows to client centered transformational portfolios. results. billion X% a our has model acquisitions whole the fee the with their this across are differentiated built needs. our base culture, growth. in with asset their XX in and share and net representing organic have partnerships around BlackRock $XXX reflected Clients total coupled in be BlackRock organic assets in And quarter, third generated organically greater We the and been a with over business our entrusting This strong asset historic positioning, years

across all organic pandemic underscores growth earnings classes, of the platform. the operating income client positive strong through all the XX% model. quarters and the same of resilience Consecutive at asset the of delivered our to our testament revenue, regions. flexibility and inflows XX% our are growth while through our XX% We diversity benefit all styles our strong saw as types, a margin time Our investment expanding across year-over-year. operating and growth, business adjusted We

ability drive evolve continues than The of and our to term. our will future before for aggressively for pandemic our investors embrace change, ability convinced clients the to needs over the today long strategy continue more meet Our to key BlackRock. our growth long-term global ever to factor And to growth. clients' drives meet and remains that a challenges I'm near for

COVID-XX, the so in bridge a to months. upside. streams This rally past has risk mega need fueled the Investors the months, surprised including the as ninth providing the few per the through period over in many around of a has cap beginning the localized the and hospitalization fatalities for US, and economic navigate to due renewed backdrop companies disrupted by clusters, equity monetary/fiscal lockdowns on an individuals policy is macro going the activity While is far coming large to companies. growing world governments, many are as part restart painful infection Despite readjustment and unprecedented to enter technology we month joint income virus of response contain rates are market dropping. improving

silent different crisis what which countries, lag economic particularly US and in and including stimulus, across a have of global including economy. policy fragmentation talking the significant the election upcoming of the speeds could repeatedly implications pandemic next And is about, of accelerating the This I've on restart US markets. also the been in trends, retirement. structural the key month, on However,

to their We and wealth diverse voices the of meet strength including of who these and The client the to conversations society. the in of world, well brand participate our insurers, needs and to other continue our listening clients individuals. managers use the We're us full as enables of around pensions, bringing our base, our to to conversations. industry BlackRock's breadth institutions serve capabilities of critical millions impacting many as

and shift to We've it professionalism. that Nowhere increasingly management Through in years playing a this our believe responsibility sustainability to with solutions on fiduciary be we and of the investment that the our climate strategies. to BlackRock across we with our accelerating ambitions. clients the the We new utmost and of helping to leveraging they and people solutions remain tectonic construction may serve people to in is most. analytics recognizing portfolios change and uniquely around I on is technology sustainability we're our investing alpha our more Investors comes research, to these for teams and and central whole dedicated wellbeing, serve. come. deliver technology. impact in with portfolios. clients ESG in considerations model when BlackRock evident world platform portfolio and our positioned move will mandates this well strategy AUM look than more building and portfolio focus great capabilities to is management active towards help leading approach performing factors, are out XX our clients. are our fulfill and serve expertise, and grown take efforts our and And than is active ensure increasingly for $X financial proud capital their we iShares our fiduciary trillion it to advisory financial entire experience working that measure need they top are sustainable such governments of We're more incredibly and BlackRock firmly quantify and to over ETFs XXX the more markets for technology, on industry BlackRock's clients generating seeing companies markets business positioned group, our now as the I'm and are on purpose alpha

across global with the to reach, data for integrated differentiated management build to to enable over an scalable of interconnectivity active long long-term outcomes that processes insights, result across our them as risk and their ability and job and Our to a and more access teams do returns and technology teams unparalleled platform deliver an regions, deliver our to investment term. consistent

platform value into income for three-year Our of And business. this of the active assets across driving BlackRock's our we've across benchmark fundamental this is of taxable seen peer our our translating some active flows performance XX% period. the teams are strongest fixed investment and of equities the or platform. median and is benefit the XX% above active

expertise is being team's now Our recognized.

We income across track health a number out example, than strategy more ranked that equity billion science portfolios. and in or their risk-adjusted $XX record was more. launch industry Allocation multi-asset of active history returns strategies, low raised the of recently inflows industry second funds the active across XX-year For The and rate one demand This launch X,XXX XXXX. across equities, US strategy BlackRock positive in BlackRock's strong of $XX third and active fixed our and mutual since quarter, fixed in for XX in have our fund inflows generated and comprehensive diverse third strategies. Trust, record current interest for looking strategies. inflows our which client of income strategies platform fixed income billion, included index clients across the positive the In yield and environment, close-end the saw Capital generated in $X equity of positive largest the quarter successful all alternative net the billion for and are billion

cash we redemptions our globally iShares the in $XX sustainable across and in product industry year-to-date. users. driven experienced precision way, by with the investments we $XX record continued largest, globally. We strong platform with in captured The ETFs uses, net strategies result and and the of support for a flows momentum saw billion are also diverse flows multiple we inflows billion most third adaptation and ETFs the iShares their despite net strong the ETFs, income and saw generated flows build the equities time to product nearly to Fixed were new in generated strategic made led segments and have and client seeing around rate inflows ETFs the core of quarter. most income in demand evolution over billion quarter, to areas. fixed were of which as environment of iShares across the exposures. the even low attract of continue $XX and the net many XX% inflows industry demand management fixed multiple the We income liquid

of $X before, and fixed and a we've in and iShares has one scale. said the asset all it fastest under crossed think we It dollar to are ETFs income summer multi-trillion growing have liquidity globally now As greater categories turning trillion iShares be years in management. at market trillion, in last can meant year the over assets of leadership, $X.X the conditions performance this clients market ahead. early stressed our been types that

more sustainable result entirety long-term our products and ESG $X bring in for leadership $XX Our the longstanding investors BlackRock their focus strategic the two transparency, performance times can more sustainable billion the portfolios. XXXX. modernizing our as year-to-date, the income billion is to ETFs considerations ETFs the iShares iShares to than another in in to of bond is the to value, accelerating and in the on and commitment that embed of market generated clients. fixed Demand all inflows quarter of liquidity third

also making help want this market sustainability and this is portfolios being accessible to to committed can expand investing sustainability way. more We and for people strategic worldwide. to remains clients in focus resilient in high-growth helping to make more that on by expanding the to A sustainable believe invest indexing BlackRock overall segment sustainable who access more leader the

and SMA a movement $XXX very clear. RIA investments client index has particularly $X of designs generated and portfolios $X time to are in such increasingly in SMAs. largest towards our the SMA to past opportunity and seek and for market markets. for and managed and addition iShares, needs need alternative recently as the of to years, critical growth deployed several return construction, quarter, the We're in the in tax illiquid private inflows invested alternative in net meet accounts are been BlackRock, client both billion we heavily their channels. meet in another billion fee-based expanding Alternatives a investing equity capital addition to will We we across provider platform focused and and we ETFs over infrastructure, important we tax efficient [indiscernible] diversification estate, out solutions, also have innovating second of clients, SMAs liquid leader. launched third Clients for we credit, as strategy hedge a advisors down their strategies client or innovating for in role they're managed also within solutions build over particularly create an to of private own holistic playing for technology are the we allocation sources, this more retail are alternative comprehensive, looking our advice In separately portfolio the market asset clients. resilience, billion our clients. on financial base. across both needs are private demand and strong where the across our as solutions enablement and portfolio, a platform, whole product these increase fixed portfolio diversified and funds that alternative real equity in their tax view our and in purposely a optimization we of This capabilities our business is asset class. We're And clients portfolio their their entire for The sophisticated opportunities income portfolio our benefits significant

and management risk analytics, Aladdin pandemic need trends the released over Aladdin's accelerated like sustainability clients. from technology recently and of opportunities also early system importance in with that of technology is world, resilient in can unified clients as to well third-party their in X,XXX investments. industry biggest XXX climate platforms And serve a that to spoken to so the Aladdin the highlighting very One within market conversation these and BlackRock of our needs Climate. and tools the and technology. need portfolios. is and being clients risk to capabilities. has it's better we a in more excited a of our risk ESG XX operating we're and Aladdin And need clients The effectively portfolios. than enterprise with classes countries support developing respond asset fragmented the for and importance before having understanding BlackRock global about across transparency I the unique can employees markets risk BlackRock's in of new construction countries. delivering is immersed for growing we products shift demand a have for increased the manage of the expanding metrics more in data objectives structural all and growing to of company, over robust ESG better around about We're home Aladdin local

favorable more the access exchange, at we to has Brazilians China more second with are interested emerging for Brazilians Clients as is of local to with for key their is world's long-term a capture our the X%, global issues and and Brazil, of world. behalf for presence to well better third on increasingly current improve opportunities invest ETFs on which investment representing of economy cross-list investor that net BlackRock Europe are long-term and barriers the important We and diversify it regulators will long-term their understand us market and serve seeing more around as an a of the In use benefits achieving entrusting which low organic total retirement clients in approach, both expect our historical help in will portfolio expertise clients markets. clients reduce this in Many diversification. than have of component rates people local access in because is and nearly to financial us inflows and growth exchanges to their been the positioned to return Asia backdrop area during China billion holdings, $XX with local investments, globally. including in us our half never such that goals. for in quarter, and all-time period, markets worked an to this continue we With a Having opportunity. largest

needs. that also open reform to country financial as China seeks markets in and its our apply own believe We global could retirement and address expertise we the its

our leadership we added towards fund history. regulatory to be quarter, XX,XXX needs to new our management every to incredibly take wealth in to depth we executive breadth is our client day. XX venture. a bench recently navigate us management a uphold our committee. company senior-most diversity approval business, each working needs, changing and clients steps of lot with evolve the BlackRock To strength our people these culture, our continue a We they our have to received at the helped and time BlackRock and what the I continuously wholly who our that of and year During platform serve. forming our talent they of the own about company meet I'm our ensure our this members more live next anticipate Together, organization, of represent crisis. our we leaders and joint allows employees people of three partner proud global excited purpose than of clients, any our the

We are their future on helping economies track. helping people invest get back governments for their we're and

because earning hold standards are of employees the we clients' to. high Our our ourselves trust

I I it for embracing evolving ambitious ahead. time. plans look can best long-term, up that, remains year ahead. see living so over our clients true have aggressively change, resonating extending clients With before. to with more are our who purpose, tremendous opportunity we with are, the questions. let's And on BlackRock that's a the and are focused to on we serve forward we in We than we open ever a voice on

Operator

Instructions]. [Operator

first of of America. Bank Your Michael from Carrier comes question

Michael Carrier

see seeing to and better The I'm based flows client, than demand in seeing on are you conversations, expected are for you BlackRock, driver it's either was just more as product active this Thanks. specific better specific. forward? what And the follow than you through whether going curious, industrywide? strength then, what

Laurence Fink

color I me And question. Rob may answer Let have that do after that. a backdrop

Rob Kapito

Mike, you that in critical of think are alpha I agree that that, would our this the every single experiencing bit year, is generation environment clients. we to

teams well. reach, We're I platform. the and platform across to think result Investment that data this BlackRock a said build have of very all investments asset And strong interconnectivity the a active we creation I insights unparalleled of of has Institute. now regions, performance Larry think the and the our this And proud global to access through the classes. it across is

integrated We processes. have very management our we and risk have now and fully technology scalable

clients platform generate our outcomes it to the say in because long teams, strong add, much for And we to Larry? consistent our them. really I Anything then assets have performance, teams, come is would they term clients need this when most. and will enabling over that the if and our we need more the So, deliver alpha

Laurence Fink

and matters. the a just of thing. performance important our function characteristic our I approach. fixed both income another is me in active portfolio add Let inflows, Obviously, whole equities, of most And believe

under to RIAs more a And advisor now, and As moves a approach. like fee financial orientation, the Wealth, and it more important. with remotely, for is based, for clients retail much to portfolio done whole it's COVID more technology, their about is connection more is the investment the even much of solution Aladdin with now the more need

their have, and enterprise advisor it models, better more of active and across deeper combination building inflows to it's in leading play a analytics, BlackRock between this culture among building and role that our the having connectedness alpha over teams, performance, relationships And all consistent towards too. but strategies. so, with and interconnectedness of a of driving the XX-year a that our also of better front I believe that it's horizon and better driving of type index portfolio clients, enterprise connectivity then using to products risk do those providing in us allows And and a

Operator

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

Craig Siegenthaler

to think of income, segments are just where on think And income. part we and aversion But given migration also loans other want client areas know like higher more do I across maybe you and back of heavy structured driven rebalancing. alternatives circle this risk this is eventually income strong today, flows fixed is some and segments within in strong fixed by diverted equities? yielding overall rates I all And high then, the credit, yield? into like into fixed

Rob Kapito

high to taking think, which is took corporates But clearly, and have long-term see they're is of I portfolio. make And is larger face need which liabilities. have much and And sustained low from alternatives sure government in that in alternative that not for yielding what yield. their what percentage the yield. securities might you meet goals, and like of this, will for are a I too we their to which think rates, people low to try a match private risk find for yield, in even portfolios stretching place, client's clients income going taking to overextending you to to migration credit fixed a period place become less stronger to their a and Craig,

capture to Larry across we products is important And cash to why, that has the income, can that from as people it's breadth illiquid higher fixed duration have short so that to alternative it migrate mentioned, income, have to fixed So, of yield. extends really it the yield, why also right move is business, that's much creating full multi risk. spectrum. are into so which flows. to taking And is And that helping multi-asset critical those in clients too additional It will capture products, asset now, allocations. without that our

Laurence Fink

are Craig, not just and would portfolios. a play other own government no retirement role bank would certainly But play add. purposes, and most for still less role to in you bonds for you liquidity of They regulated income bonds less There's unquestionably, institutions. big bonds for portfolios would purposes. use going question, government I a government

to a going different asset asset migration classes different are you so, And and to have categories. across

income And fixed income, I beginning fixed purposeful believe the said, I we've Rob strong as has fixed a differentiation in income, as so, And of a us within comprehensive platform having entire firm bigger larger use I say, our in ETFs income on their educating they to portfolio a how with are fixed needs going play above-industry positioning over market. to trends clients component is fixed to and fixed our going with for ETFs in can And income. would historical platform advocating our the in flows. suggested, our, drive which income continue strong, organization have income worldwide XXXX, believe certainly our constant to and fixed since ETF income I composition been since a allowed fixed

Operator

question the Bank. of from Brian Bedell of comes Our next Deutsche line

Brian Bedell

believe, little And iShares on AUM. to investing lot your comments the $XXX Larry, leadership billion showed a just more on I in deeply. you cited the maybe trillion passive you with, sustainable just play of weaving the a bit on and comment the quarter? here Obviously, focus in on on in role into $XX lineup were product in iShares ESG billion the franchise, Could Aladdin what as Aladdin if to ETFs? I'm in you in decade. the AUM, not on can the mistaken, billion it's you sustainable if possibly in think flows. of with $X the I Maybe flows And over outside active – product update was us on how side to in think for get goal also to side, management your that end addition of you can technology that a well. eventually Wealth just by thoughts the $X

Laurence Fink

we of believe, in cases, change we in an was XXXX I that risk investment of that existential some that the And It the risk. said letter, wrote obviously, at same much. do as is more changed seeing more I my pandemic, many we didn't created now, and that the an when I – in understand As book. climate China was not and obviously, at is believe impact, climate was risk. the really all. letter, And And CEO I time, risk. do are health the believe it mind top pandemic course virus The existential

operate has than more what here we what more we're the States. fiduciary in hearing think law a made even United are in before. So, dialogues In this climate top we worldwide the dialogues the of having And more and United to land. ever mind. clients, States, I of have witnessing as change from We're COVID

is focused Our Aladdin. we that to And this investments I the information Climate climate to to ensure that Aladdin, labor different out. are data return. creating of a need risk, show on Aladdinizing about hope we sustainable We continue drive how to department fiduciary is climate maximization and to on be is to Aladdin components with as as data we why providers as many and so working of of put for change. We're said that earlier, has technology rolling are required one investment do all change and everything you

why requirement all It not a a see you you're a of real result And so, is a investors, it now climate climate will before, if is overlay data need And those risk offices, in have they need on investment across change do, Europe. countries of flows. [indiscernible] is if you everything to risk. climate any lens seeing we Europe I to as investing would is even they in more assets ever as beginning you for And that's why the change we're board, that in across the now, fiduciary it. not family it, whether risk. of had play it's documentation Asia. China whether But to individual about a most recently, it investment do show say, in or climate as retirement to have have they role Europe, should on conversations don't that we've and conversations how much sustainable that believe than long-term

sustainable some into getting details, So, about in products. of the billion we have $XXX currently

the that. reaffirming to able reach we'll that We are believe $X We trillion. be

or did strategies related that active question, fixed client in related it we'll in objective. we'll And getting about to to XX overlay everything the yet. talked there is not sustainable different we sustainability it we fundamental we be to, index income have our But And an that in said ambition meet sustainability. let's year that we're and you a as ambition frame in the note within As our obviously, our about ETF is believe we do. equities, I we our there the letter have much clear products. fundamental be related our

clients out. who can we all our clients. information that believe to provide that do And with are it we working we are seeking So,

Let me be clear.

client believe to do we them hydrocarbons, fiduciary, them in believe to in their Some working to seeking is not them. invest still a their that clients we're continue a But We're is have climate not it to as trying happens why index to It behalf. our money. for change, still show and on if we're invest money and with going is. an

Operator

comes Michael of question Our from of Morgan line next Stanley. Cyprys the

Michael Cyprys

BlackRock think that see in competitive if does mergers how And for dynamics industry. impact participate would seems do could And up picking structure? mergers the what be scenario consolidation, chain, what could on and and I across across here? continue in? the and sense value guess, if And this larger you to the BlackRock it Just industry we make

Laurence Fink

responsible an have who CFO Gary Well, for the lot a is historical is investment industry, let's since in of M&A banker my respond.

Gary Shedlin

Transformed observations investment just today. we're few banker. seeing a on what Maybe

from I would consolidation the think standpoint acceleration I industry. that our surprise in recent very the little there's characterize by and

advice. that the increasing. about asset out investment And pressures to the importance of how you they even whole there, We've portfolio addressing critical the solutions. revenue obviously technology are trends of to that or support give We've expertise, global operational becoming before management, are whether you really portfolio that global multi and have digital talked firm whether capabilities was talked is a a think couple expense be to infrastructure, If pandemic. we're seeing and and a about or your nice-to-have. insights are a need-to-have not, not clients And distribution, or the risk construction, you able best to even to need not

strength ago about we is really to the model of trends created. think those three the And firm over today. it we've began that evolution of identified today's build activity purposely those a in the trends, last to in what a cases, really and many well BlackRock you see decade the particular, as last business If consolidation three validation

disruption on global the to in our whole Large be likely continue not have processes, to consolidating. as think distribution and by – quickly, to and we're from we risk and focus I to today's world have capabilities, a industry. scale, have that active, consolidation And really strategy, a of unique to combine going integrations across you it's accelerates, and operating driven intention need in that to that create, with that's from relationships different what ever rationalize to to maintain strongly the more to our when overlap investment industry passive to we disparate so, are share. reach, have are especially costs to creating you going diverse ever cases, of beacon teams the of not build in to you benefit solutions just And be cut we a gain really – which than portfolio effectively, cultures, see easy, feel and, going deals about technology think while to ability scale our already hopes to continue really we'll management, consolidate is the advantage means existing best-in-class the investment many stability take are

standpoint, not from our So, our M&A strategy has changed.

We our if long-term will are only accretive consider to organic opportunities growth. they inorganic

to advantage take of looking We are efficiencies not cost drive to secretion. EPS

broaden seen, success markets the much pursuit expand are global less much our franchise, private you many will certain the control utilize also investments about of focused of like but use think focused as we're iCapital technology I of deals in looking to more And that more distribution tactical not We as to line where on are Scalable minority our of capabilities, balance distribution our and opposed on are investment technology take M&A management flow scale reach technology and parts growth our itself. think necessarily much to may aggressively revenue thinking and digital Capital, more which technology focused And traditional on make really have in potentially to trying great consolidation. investment things to I drive had for we've sheet really sense.

Michael Cyprys

like I good. Very that word beacon.

Operator

Sachs. Goldman of from The next of Alex line the question comes Blostein

Alexander Blostein

of last, so. you the ask to months it, for operational lessons wanted call I COVID learned guys environment or the the some six from around

it community. you also, own once some the normalizes. world hand, are how like curious I could was that and if Aladdin footprint your one opportunities the advisor sounds G&A sort rethinking guys the Thanks. But financial faced of could by given accelerate, for the of evolve On challenges

Gary Shedlin

migrate the commitment to crucial I biggest system in Look, people XX,XXX the And obviously, a offices. to the six seamlessly technology XX,XXX absolutely And XX,XXX think operating performance, ability for that months the to to to early were bumps environment. obviously, from evidence last that. to just was quickly but into operationally, single of I home, or our able some plus way. is need necessarily whether terms that at migrate we was very certainly over Obviously, learned, frankly, offices that lesson in in think, think, financially technology, our people we we they I had XX get people transitioned trying I think

to broader the seen, that, acceleration pandemic, think almost I an it I pre-pandemic we were every that that post-pandemic. think single frankly, as have business we guiding towards in relates the trend strategic

a and we And everything it that ETFs our growth about think were it, pandemic, technology, the really through whether pandemic to sustainability we talked incredibly there, be into solutions whole obviously so, we more been before on reality. Larry important ETFs which performance the and portfolio accelerated if focused off mentioned before, assets fixed the get has how about going of portfolio accelerating private broadly, to I investing it's It's you whole were was we was the strongly. income solutions pandemic think kicked opportunities

we many a that clearly as result. really in themes has think more pointing I the So, feel will driven growth cases, pandemic business and we towards, were for the us many of accelerate that

there. the relates it back to I'll back getting As in to office, Larry jump have

we we we with question of always and basis. And through putting that There's employees about think on operating only and following are I call we're that no still official operate and to I office remains Well, continuing operationally. the look, doing our the a office. look return to we can employees X% to operations back today. wellbeing to in get guidance our our all safety we'll priority that the as split today office. the But, think X% York the are employee be of New first health from the

I of think people driven innovation working we to think, together. BlackRock type hope that quickly I going think as been having I get always of is culture we as we're by the can. back culture where time, office over still an has term, longer there And

Laurence Fink

thought add. would efficiently I from and There that the could don't the us health think I of the horrificness just concerns. are learning remotely. we we're pandemic of operate lesson many any as

health their they work degradation operational to said, we at up that, employee it, we improving many by now remotely more we be exercising, hours that, would considered workforce they we remotely was large, periods in spend remotely. efficiencies yes, the particularly of city –XX%, building the XX,XXX that will Can that they benefit average an Gary offices. As And blessing. two this have XXX% what how of XXX% the of companies, a going environment. on even imagine could BlackRock, their will our of worried by a portion cultural each average this in virus. Think be year, don't have believe clear, each during hour you still that I become spend hours have and including have without hours some can back office will a learned two to could Think the we two the accomplish reduced do family. congestion? spend that if work, large time we're of of free operational that that your about. more doing one believe They in resilient the way great for can efficiencies. we could much actually commutes when two about year. operating have is related have of working we in issues the about XX% of work hours stronger, have day. I a I'm can to solutions fears, terms believe could But let's deeper, We believe more can I I

I processes. do will to through going adapting many through think And we're And be doing this. believe so, this. these society I all there be blessings are off And better

talking And BlackRock. so, we're about what is this related to

front needs. to clients' of We stay have in our

to in We having but have going another from part COVID is of create great office. economies. – remotely I one of horrificness having a be And a core think real all the your to working and And that dynamism some to lesson. going of adapt. all adaptations will our working the I think And for enterprise still this we're learn is positive it

this our and this And as from this look clients could at great a benefit We're experience. from learning also. so, benefiting I

Operator

of comes Jefferies. Your next from question Fannon Dan

Dan Fannon

contribution The just a in that's the flows about Curious outsize the coming from from and flows, that how surge going thinking forward? redemptions, of wins. that in these of the on gross and reflective whether Europe XX% we regions should if sales, then question was or of a momentum mandate record Asia. any And business, kind about lower think

Gary Shedlin

any is always Dan, make Obviously, great trends. one hard to significant question. quarter basically

franchise, always whether unique of us their and the about are seeing investing this about brand, think see investing institutional we're think as has wealth to to and are financial seen Asia. there's in And is are countries broadly the We're clients before sectors we more that this We're a and issues about Obviously, countries each of reinforcing countries But I related Larry but our are And obviously with adapt European obviously, think complex a challenges. are increases specifically a more facing so, the more sharp time. while franchise. in globally, dealing lot are trying which local quarter, in quickly insurers US as And or and pensions of the turning fact obviously are well that tech talked all the talked of and delivering broad we advisors clients global broadly. well as one declining to across to is clients which payouts for to of closer of we've the areas, the obviously, sustainability firm. point of basically had, specific more And decision which are. becoming adapting in spending to commonality and our commitment Europe the variety we to we're the think around of number And We're have positive lot a a variety with, to a really to seeing a firm. Asian each in than energy more seeing coming and particular flows uniqueness geographic important operate, that, asset underfunded. we seeing time and more challenges we we of board think clients it's underappreciated trends and ways interacting obviously in allocating areas to in I the flows of US we've alpha from individuals is are their us. retirement much be things. savings, each I considering types Clients countries emerging and the new But outside clients, to those in those of markets. all values. regions all globally I dependent making as challenging. who point reacting own where BlackRock critically everybody of on areas, We're they're I local think like pushing those different our growth as at

world of to So, footprint that trying the make sure and our clients. we're that we fact our global to can basically indicative think deliver around I invest just it's for all the

Laurence Fink

Dan, I said. to would Gary add just what

US the be I ETF of say is thing accelerating. community across is think other utilization operate. The slowly really seeing it clients say speaks in Europe commitment was very ETFs. loudly helping of the Europe would more to years our we And I comprehensive understand are platform flows is Asia. local ahead worldwide we us and our up. all products. of Asia also consistent in would and and retail in Europe adaptation And catching EMEA I every

portfolio big some so, just macro to think a And and worldwide advisors and different it with And moving a more to and also base our ability of means comprehensiveness of it as of more ETFs our because moving are better the clients our trend the is emphasis being the trend. is firm – products financial positioned solutions. beginning of to but I a are more worldwide is trend, of products. fiduciary of this believe I towards local, think fee no is more new work adaptation whole I on our relationship,

Operator

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

Laurence Fink

our you very Thank our all this landscape could turbulent convinced we interest proud of BlackRock. I a will a challenges purpose this and at to to hear resonating. you in to growth companies continued will that clients of clients' than long-term is around in we're want thank help the more always meet over continue made our to their center clients morning of ever and that investment I for that of for clients us, long-term BlackRock's building before our ability you, platform BlackRock's your vision all navigate for are those joining to Hopefully the centered with from the drive the progress is operator. resilient future. portfolio. I've visions strategies said succeed more us of and our long run. am build

all serve you, clients, communities, BlackRock's Thank to of needs. people where evolve in continue fourth operate and and in as a employees, safe people, I communities better of all clients' And we wellbeing innovate financial focus long to to and ahead we continue for platform wish quarter. the future. on our our our term and is better purpose our and stakeholders, in more our I hope a fueling in years you. invest healthy to a the investments our still more experience all our helping we can you come assure our and obviously, the is shareholders. This our and will Our in

Operator

Thank you. teleconference. today's This concludes

now may You disconnect.