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BLK Blackrock

Participants
Christopher Meade General Counsel
Gary Shedlin Chief Financial Officer
Laurence Fink Chairman and Chief Executive Officer
Rob Kapito President
Kenneth Worthington JP Morgan
Craig Siegenthaler Credit Suisse
Alexander Blostein Goldman Sachs
Patrick Davitt Autonomous Research
Dan Fannon Jefferies
William Katz Citigroup
Michael Cyprys Morgan Stanley
Call transcript
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Operator

Good morning. My name is Jerome, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the BlackRock Incorporated Second Quarter 2021 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. Thank Instructions] you. [Operator Mr. Meade, begin conference. you your may

Christopher Meade

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

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

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

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

Gary Shedlin

of and It’s morning everyone. Chris present my you results good second XXXX. to Thank quarter pleasure for the

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

GAAP our the execute to results. as as have to and on adjusted discloses financial month our enabled for value. support Day our Last highlighted release at Investor While I'll on consistently shareholder adjusted us made focusing we XXXX have we earnings primarily both growth be framework results, investments our how

markets industry-leading construct meet growth technology enjoinment over have integrated to drive whole and We create technology high as clients in appetite. And they platform and risk private resilient or growth and invest their results differentiated that future. to $XX gross our global a X% franchises once that billion continue of our to evolved second platform The representing very and to growth. portfolios solutions active objectives in investment and comprehensive total asset inflows regardless enables integrated again for and BlackRock organic annualized and delivering are we quarter, market globally distribution accelerating invested time and of with net ETFs, to traditional continue remain investments local ESG we the the organic of the in well-positioned capabilities quarter, in generated capabilities. delivered strong our investment combination such

previously fee quarter's impact and included net second client. organic contributed large the XX% billion $XX franchise our low index robust disclosed, fee ETFs institutional from inflows base pension active growth. quarter this entire a full again As once from net public to inflows annualized redemption Strong of a U.S.

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

share equity billion up reflecting benefited of included higher of year the in income increased by a seed year-over-year Earnings investment XX%. $X.X primarily per $XX.XX in year-over-year million quarter part to versus driven results coinvestment rose unhedged of Second billion conditions of income, XX%, XX% capital comparisons was compared tax $XXX improvements rate $X.X market and and Non-operating revenue operating quarter our from for gains Strong also effective ago. mark-to-market a and income ago. in non-operating portfolios. year a equity significant net private lower

a potential is in a during as certain or the consequence differ of rate tax now primarily XX% tax for actual though remainder XXXX, tax run the second for legislation tax items discrete year. rate effective state the -- the rates or non-recurring in may changes tax increase of XX%. quarter an approximately estimate projected reasonable adjusted We as was that tax Our rate reflected

X%. lending base was fee higher base fee and base was up revenue by discretionary fee quarter securities offset driven year-over-year, $X.X waivers, strong beta year. organic AUM on up of primarily of partially positive impact and lending billion revenue lending lower by over revenue average money the and last and XX% Second fee the market market securities strategic investments securities growth, pricing Sequentially

driven basis fee offset by by points, fee impact than current However, was active more and effective of were market quarter. the one higher fee businesses X.X beta money equity in of the day growth down the our quarter additional strong higher in base discretionary our rate fee divergent as impact the and organic waivers

incurred part $XXX second the money support yield market we gross million strong of government quarter, continued into driven waivers by funds. U.S. discretionary approximately During our flows in

technical While current the discretionary Fed's levels persist have term. the the modestly RRP waivers recent or still adjustments IOER to we for around to fee new expect and helped, at

in spend. while across XXXX, ACV including pandemic. AUM growth contracting strategies. to of growth expense from year-over-year, Quarterly ago, long-term. up reflecting our was higher Employee operating gross million driven performance year ago expense. portfolio the yields expense reflecting waivers higher higher associated was up Direct entire Sequentially, revenue arrangements with G&A $XXX million acquisition. and down funds by value $XXX compensation, a million over Aperio discretionary additional launch by increased amortization may annual strong technology by XX%, million, a technology reflecting the with primarily fee related the by of up and index was illiquid existing year in and teens G&A including several Intangible a XX% XX% result benefit $XX to the competitive as services compensation million technology the performance the alternatives compensation compensation, future incurred low year reflecting and strong from was be quarter to committed increased platform, and increased deferred year factors, services grants partially primarily income remain year-over-year, first year-over-year, of the certain which costs acquisition. Total previous direct We continued and prior $XXX average expense and compensation investment driven driven higher a marketing contract increased incentive primarily primarily positioning. levels reflecting by second of of and the significantly higher fund by offset also of expense quarter, XX% impacted year-over-year reflect mid fees XX% higher fees expense or of impact from fund However, ACV spend. liquid of product additional versus the slower AUM. increased ago, sales extended to in and higher and waivers, impact were compensation approximately early quarter, level impacted or and expense G&A $XX long-only days marketing of and and Performance our XX%

remain the XXX part never quarter benefiting of efficient BlackRock the positioned advantage improvements second as before the in Our year. been equity a never growth to been year adjusted we to last market organic optimizing us. from -- operating XX.X% most of take up opportunities was ago, margin points has possible. basis over positioned has in better from committed way significant And

strategy to prudent investing Our capital shareholders. our remains excess balance management Aladdin our evolve and and incredible leg in all then for business, growth. first see We portfolios of including opportunity of to of make are cash its sheet, return next to Aladdin to to language through invest the use

As the capabilities standard discuss will of Larry new scenario announced second climate acquisition their in and we partnership more for analytics. enhance change Baringa, the during including quarter, set model, industry-leading a with Climate's Aladdin a climate will detail, which

tech managed product personalized our market minority In recent addition, of enabled announced incremental SMA franchise. and a providing acquisition Aperio adds to This option investment strategies. yesterday professionally leading manager, SpiderRock asset on a capabilities Advisors, in extends focused investment we overlay our

of as and by additional in We shares the the second guidance for previous an relates repurchases the to $XXX worth quarter stand remainder also year. million it of repurchased share

Quarterly unique platforms. our As our clients scale, inflows our momentum deliver net to active we as discussed Day, their been leverage billion needs. for across has Investor at ETF never $XX business, we orientation especially our resilient meet solutions reflected entire platform insights investment and strong to better in investment of positioned long-term and continued and

billion annualized inflows organic $XX ETFs quarter, and of in net asset fee XX% second growth. generated the Our base representing

generate first fee equity $X assets We globally particularly precision continued in the equities. Core higher inflows, for also crossed to ETFs in international time. trillion strong and

of and most by any ETFs. across organic mandate were unconstrained pension strategies broad flows major classes. our by is and led well-positioned capture equipped remain billion fee our led both Inflows rate representing largely Retail annualized base $XX as we and sustainable from strength strength positive demand an of this to based our the reflect However, of the renewed to in inflows, continued X% outsource client. net active U.K. positive by client a billion multi-asset XX% to international entirety both demand category asset strength annualized in as inflows broad income all inflows came where growth in and steady significant the growth were environment. equities fixed into active quarter in net factor well net range, institutional ETFs continued income, meet across and and for asset thematic of appetite our from U.S. $XX and diversified internationally CIO a billion $XX driven growth organic and platform, yield market high yield active for of investor fixed including strategic BlackRock's

also will and discuss, management hold uniquely capitalizing in focus to deliver positioned technology solutions global our sustainability. BlackRock and scale, expertise is on portfolio Larry customized by risk As investment on

fixed sought were asset immunize hedge base rebalanced strong, positive minimis deploy hedge outflows. of than for Fundraising as through fees. partially inflows fee and we billion fixed data redemption quarter, credit, to strategies, as flows. across impact index second and approximately for overall offset continued, of the Despite single liquid the during index net and the billion mentioned private organic equity outflows annualized impacted income, $XX inflows alternative in LDI were continued LifePath liquid funds platform, active after billion growth variety also of client flows a quarter, our active fee during and market with into During strategies institutional performance a higher funds, clients net offset for the of the portfolios index also and nearly BlackRock's and ninth low have remain Institutional gains inflows consecutive Outflows was active we offerings. target quarter. future solutions. X% by assets, equity net fee base quarter were net equity the more outflows income capital of billion by saw BlackRock portfolios strategy $XX driven previously into approximately from and de real source the strategies. private to alternative solutions, of equities and the committed of active fund for significant across momentum by alternative strategies into representing $XX alternatives net base of single institutional franchise clients alternatives demand significant $X equity quarter, quarterly Demand illiquid generated notching Overall, fee

second money government given in market management U.S. Finally, strong, generating significant the funds. in continued financial BlackRock's clients remained U.S. and of cash, the facing $XX both their quarter, manage prime liquidity relationships. strategic strategies zero inflows the Europe, driven platform demand are net the and Despite by both client returns grow, deeper to billion cash helping building for cash we net system and in and broader by

Our culture the one been performance day. a strong talented a result continued well who group growth employees of live is has strategy purpose-driven a executed by that direct thoughtful of BlackRock each

We success tremendous these are XX thankful their contributions and to over our effort months. for last

we We invest change needs and the to responsibly that, of the can meet all continue Larry. of embrace will it over that stakeholders. With I'll turn to for future, our so

Laurence Fink

Thank Gary. joining thank call. and you Good you, the morning for everyone

optimistic and York again GXX reporting normalcy. last of weeks year office on people earnings in-person again. happy the in clients to Sunday our it virtual meeting of little change, I a in more in remain great be to and about few weeks and spoke colleagues Venice New meetings, City, the headquarters I the once the the to spent more in in road. from climate I'm more also office at see back and back with cautiously are gradual on return a a recent than having and our We for and was After sustainability today I

what to through and hear face-to-face in lie listening is relationship business a ahead whole $XX to approach able and their billion deeper directly their for is results the Total scaled conversations active well were growth second meeting turned revenues, staying clients them. our This our we always them for quarter, and organic to and clients and benefit with of illiquid build as and as in base demand the management cash are opportunities, continued their longstanding alternatives our with net BlackRock areas. evolving is their ETF all of centric sustainable their technology year-over-year Our substitute client understanding these built saw fee driven needs. investment powering from is is staying the challenges, developed increasingly strong portfolio on strategies, needs. growth ensure by XX% a our people XX% that of no front strategic inflows solutions. consistently as stakeholders. growth in It to for momentum client we're we Aladdin. across current and to We in and about people there serve And services representing And

reopening. We and target net that from growth quarters, were gradually base as near-term, have XX rolled clients global to With to potential the larger mandates of last is fee amounts room economic over now we for $XXX inflows. grow, are This delivered the with including and restart the excess restrictions on in billion XX% in various the X% history. of very strong due sidelines, second partnering continues performance, countries financial in still months vaccinations organic quarter cash consecutive I'm significant significant five more some the of to continued are comprehensive for markets than despite our our are driving anticipating regions, confident and variant. growth we as out in more have certain certain before broaden ever over countries The in

more alongside seen central investors top our and inflation impact will them picture the portfolios. quarter and concerns remained of what year took and in BlackRock up structural investing a $X decisions for for remains who iShares in and and look their this $X time to get BlackRock their over scaled need trillion future they're are most assets. the on mind Day indexes only helping just to In It understanding can year-to-date two to whether benefit it our to inflows many environment, partners assess It governments. five beyond. to over platform for of future took get build BlackRock at this out to billion. recently laid We globally, and XX% opportunistically policy for client be Investor first year for In biggest on across by of of need of deliberate turning the They're policy so help to construct the half $X for hitting is get expansive as the their needs. fiscal to growth remainder transitory trillion are highs. ETF their balance a potential in by invest years goals. management to and for delivering investment are them. our for to help looking uncertainty. areas or and turning Inflation second iShares trillion. the to equity a many iShares monetary to portfolios focused the And and most Building them scaled Debate showing record and tailored assets. we with franchise. markets will years investments our last of up their that only who resilient platform $X technology the future. their years clients to client's assets on through deeper trillion banks XX They're June global we and accelerated needs we navigate the plan turning net ahead $XX month, ETFs, asset We consistently have took the driven past rally to and years the them have of ahead improving momentum over needs And the of our And

beyond market than access organic, efficiently. as using ways. they're iShares milestone whole more the you are Importantly, traditional majority are indexes, to weighted at of invest to the built There each growth ETFs before more using and cap are They iShares using ever has using markets portfolios. more more this investors the been in bond

of future ETF, billion second size in ETFs, half With the $XX readiness the next billion category. opportunities alpha investors in active the has index ETFs for in sustainable innovating compared of XXXX quarter. incredibly for And of sustainable all quarter. Sustainable for launches a XXXX ETFs. of strategies, growing Within in than Including more ETFs. $XXX fixed inflation precision and across than Chinese fixed of fixed category to exposure, into turn and fixed trillion will net range Momentum inflows strong, more Our sustainable first our Demand low from ETFs more income billion ahead second transition to We with saw manage we XXXX. their ETF our sustainable that And ETFs net of nearly municipal in ETFs, another our from and sustainable efficient of each inflows in significant our clients. bonds, of $X generate for market. fixed offer of billion grew billion four this led on fast the multi-sector more income broad We are ETF focused now $XX is income leaked seen as ETFs of continue to a income into investments categories, and trillion grow to needs for income our billion including we billion client's strategic in have accelerating $X sustainable inflows are bonds, we believe strategic inflows $XXX net this we by of access $XX player. $XXX carbon modernize the sustainable the sought the ways to saw investors than more net both by with this core, to in BlackRock needs. our inflows half in product and active. bond times our as well-positioned coming whether remained us $XX categories, strategy worldwide net

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the British fund, manage entrusted its We bustle in pension assets to U.K. Airways for the investment billion believe $XXX believe represents OCIO This quarter, industry. $XX kind creation assets pension and the change catalyst that we manage only will honored over second towards through continue in transformational model. We it be partnership are trend of outsourcing of more be and the to the a a today, for accelerate. over of bespoke will and the largest service to billion in in

and of behind are financial with broad democratization tax financial And strategies actively is Aperio, to seeing is managed and investing. is SMA to management another wealth iShares Alongside continuing leading portfolios model step on index among to to and personalized personalization wealth client efficient, portfolios, SMAs. our well the as the and This range management BlackRock remain personalizing solutions. ETFs demand our We minority including our see risk funds, largest acquisition Building and will BlackRock's also BlackRock over capabilities recently investing clients. we which enhance taking in assets, factor platform portfolios advance major further tax management high utilize account personalization market the and portfolios. as are across franchise most to advisors tax focused growing our as partnering a of which SMA providing rates for Advisors, market. alpha, separately with growth personalization continue provide financial announced to provider of in and second is today we're our Aperio. sustainability. and SpiderRock recently for And solutions wealth of investing commitment a in and intermediaries evident on meet efficient, personalized scale. and comprehensive is and advisors needs managers billion invest the more who in and we ability we our client's managed $XXX in of investment advisors to customization evolve wealth ETFs,

financial understand will through -- client physical ability capabilities, Climate clients of Baringa. each our Aladdin exposures. bringing climate the of to address tools. committed milestone the Baringa's sustainable and and analytics June, Climate economy, benefits better infrastructure. we at provide factors them event changes, partnership portfolio transition who risks, As risk the of in into risk. we for models risks We're The also energy our analytics and energy and help the climate industry. developing extreme industry with risk every June of supply. Aladdin our deepening further both new client's around the goals. products, and in manager local will further can investing a like of in we in partnership is management Aladdin's intersects to wealth to their and portfolios across asset climate risk investors data, by and changing second the the physical We're models has significant set This combination understand Climate includes will global people a climate This and their risk -- we speak new to the with regulations, Aladdin Climate investing build-out bar technology company local to is platform Aladdin $X clients customize world driving the need technologies largest insight our management language investing in the significant and our how as received impact we impact a on asset Last have obtained for advanced in world year, we better are understand the with and such climate includes Rapid to transition markets and risk venture restructuring so weather to the the this fund solutions. development capture asset transition new leading and we act leading last license. trillion and -- adapt risks in year, the economy in license. on that investing domestic propelled In policy accumulation global And China. excuse the economic joint me levels, the their demand across began Earlier to their wealth fundamental fill -- in help -- Chinese month measures sustainable growth of investors management this help and management world's be we

global firm to We are asset the type obtain manager of first this license.

investment at momentum base generation salary positioning a for remain positioned with platform transition have their in better need only our for nearly our recent diverse other our the up is have I retirement prouder participants preparation XX,XXX thrive income more across investments industry. help China the for of want generate this for the the of it incredible result our hard share this LifePath a in incredible to of investment an base. to raise dedicated demand XX% developing demand the outpacing can After employees target ways and we than accelerating. retirement. environment where a With BlackRock retirement, and institutional are retirement. no and our Client people of to an to period career that of and segments been XX% breadth and all participants the and cultivated we a BlackRock's retirement compensation our income build inflows clients seeing commitment never across of XX% X% net are conducted employee our income our I differentiated for My recognition and and a have seeing in with half investing BlackRock's and our in all and firm's life. been retirement their focused support around others including and of their September helping levels growth have and crisis employees Middle in every the And clients manage BlackRock strive for We building billion organic savings their a $XX -- and And is they the linked insights to inclusive feels several future. our feel validated We China, grow more incredibly innovating solution meet to to helping strong assets our XXXX. found and entire retirement need. extend approach of plan in entire in Paycheck with work supported pandemic. on history, well-positioned including study where relationships them director A funds also and solutions growing environment address the to in seen world. date broader direct of clients representing commitments recent like X, address nearly in deeper, sponsors further BlackRock is each are throughout across The and never employees. Europe employees our to year-to-date to responsibility have in clients. with commercial has an now growth this already as global client their to BlackRock's The East are from and through success, trips consultant. and clients initial LifePath we to we're BlackRock and strong,

led hearing client's what innovating and front always to through need, of that listening have embracing they needs, has us anticipation staying We what in that want, and our forward. clients through they and change and -- our by what driven going and

staying let's the anticipating questions. for of growth to to And Our that, our stakeholders we deliver in asset made of long-term. deliberate open more front build deliberateness platform continue needs. industry all we technology our With the in resilient for and a fiduciary resilient client's benefit manager a guided to it more has have will leading focus our and by terms investments -- up

Operator

[Operator And Instructions] JP Ken first comes Worthington question from with Morgan. your

Your open. line is

Laurence Fink

Ken. morning, Good

Kenneth Worthington

morning. Thank my dig Good further I'd you for and into in SMAs. indexing direct to love taking customized Hi. question.

first, maybe how the and indexing additional importance of compliments SpiderRock at direct times you capabilities then solutions. give you remarks your customize in Aperio? your And retirement us number So, some highlighted SMAs in prepared color of can

So, we time? management Aperio if capabilities over should LifePath see part retirement of And what its this permeating your the for SpiderRock mean and and does business? so, evolution

Laurence Fink

-- Rob and We'd off then Rob start have

Rob Kapito

in which Larry manage to segments. tax to -- enhances capabilities So, SMAs clients what as our additional ability continue know gives while Aperio, we a are more that's that direct actually mentioned, for And us in combination acceleration space, for had we're two-plus-year different build deliver seeing looking personalized and our and you client with are organically personalization we indexing.

Aperio fixed experience brings and solutions. SMA managed in building custom core investment index-based actively highly multi-asset. in income, capabilities BlackRock's historically were So, equities,

equity are our proposition businesses they solutions. portfolio whole and factors index and enhance a value fixed for complimentary our alpha So, and income in SMAs across these

capital income market Aperio over including And the of we've the SMAs, billion gains now whole with a prospect taxes, of mandates and $XXX sponsor. So, new pipeline transaction closed. a higher over Aperio in portfolio just $X built in is billion potential leading with BlackRock since

So, the of an this example ETF into it. personalization course, are is are the and in how direct we index of direct indexing. and more tech And we building investing that and getting compliment

Laurence Fink

great of LifePath and Paycheck, in LifePath LifePath date energy target on Paycheck. Ken, a put we deal on

and a XXXk are plans with different we plans, see the We this position now, corporate in plans. many DB revolutionizing working

doing lot a in I business. the is actually corporations. positioning of consulting we're separate from we many, are is going with and have future to there. growth -- Aperio. quite what with side And But the discussion in customized of of this the have firms. retirement are our worked a to change related we believe We lot many future terms And think in all This we announcements we

We have many from buy recommendations across on the this consulting of firms.

said. our are plans this to some hope next we we success to BlackRock related and LifePath the needs are future dialogue as clients. I announcements responding is many the the with few We very which quarters have in seeing Paycheck, be the will of to And in significant of many, changing, in

I we really conversations, expand something private the is the United many, that more during retirement is hopefully did So, we our during we think this I -- going now before to the why more even reshaped more across why why it this could this be part beyond clients, And States, franchise, urgency LifePath deep the be -- be could accumulation the related the whole when some going proud to United retirement certainty years but that. able clients billion of to such announce resonating to work than we of time, these ever is need that is And this to for there States. And with how say over last would are are in really of about many R&D up Paycheck. period just a that is talking alone identify we're -- the the around important, foundation. now. going $XXX LifePath is with a the the significant so we now -- target thing and our to of date And very without

to is continue going market taking to this we're accelerate where share. so, And

Operator

with Your comes Siegenthaler Credit from next Suisse. question Craig

line Your is open.

Laurence Fink

Hi, Craig.

Craig Siegenthaler

follow-up the verticals Hey, most good lot or rise or of among this I six think Day, have I one demand provide had had retail. but insurance some ETF like morning, significant declined Larry. the segments adoption. seen on last any in months? decline the a and U.S. I a Which Investor RAA, the any bigger client And covered over in upside? thinking here. know you I'm three to ones you question of And you do a iShares

Rob Kapito

question, Craig. good So

penetration the over we of significant over and bond the that continued we room see markets that equity know have ETFs. You growth said And in very for low. still and is

of where especially of new shifts total capital XX%, X% fee-based and markets a growth, generational ETFs to lot seeing investment replacements new market. and whole ESG are the of portfolios expect in that we're unlock ETFs overall like the We market about around capabilities bond where X% are

be going we number that to the market and markets to client in we than to I that vehicles evolves. is still trillion. recognize lead show that small to flows we a out throw there organic a of total that are offer in the $XX going ETFs are you give as we compete, we in And fully part why And driven growth. we and by would but decades in have level, to double revenue And of to in this ETFs, growth intend that. believe more are clients, even assets at to which which XXXX leader be we truly the expect choice think We

there fixed is One client institutional are income then area about quickly. through Europe, -- are primarily huge again, is of is another And key is is a And some which showing leader heard showing you of are in a certainly showing very, we we the clients, also very sustainable, in which growth. growth. which segment growth. The which portfolios So, wealth adopting model leader segments.

client ETF platform broad diversity makes our any its what to competitor is relative So, base. unique and

up investors, is So, our self-directed and wealth managers. of made global for example, managers, pensions, client base active insurers,

U.S. in with Europe. trillion $X.X $X.X billion most We income. trillion And $XXX fixed in have $XXX the equity and in the billion platform in and diversified

about. matches segments this secondary against be see most up provide how So most overlooked, the you the which And I client can may we importantly, talked market liquidity.

XXXX. So, in $X EMEA in $X.X traded U.S. XXXX iShares and versus iShares XXXX versus trillion traded trillion $X almost in trillion in XXXX trillion $X

precision actually prior are in So, been years, has our a which drag quarter. us growth exposures, strong often revenue to this that are while unique along this with a driver our of

leader So, in segments we're specifically in that growth are the excited the today. we about a

Operator

And our of the line Goldman Alex with question next from comes Sachs. Blostein

Your open. line is

Laurence Fink

Alex. Good morning,

Alexander Blostein

Larry. I look basis up, year. guys bit was the out morning, well for could a out morning, Obviously, very well. the expense rate a in as actually environment, a on But little revenue in hoping everybody. revenues year-over-year half. dynamics XX% Good first the up further the as Hey, quarter, is you in half first strong good flush as comp the

that performance skew to Now, fees I know sometimes. upward tend

just rest think framework expense big the your year. So And the picture, and management margins. through of then us around maybe help Thanks.

Gary Shedlin

Thanks, Alex. Good morning. It's Gary.

let's So, individually. down break it maybe

of and incentive very you reflected talked higher comp in So, about is that compensation about terms correctly the to up we comp And profitability pointed out much incentive compensation. being tied that side, both and XX% performance. primarily

success That But performance call or say related -- of increase. and historical basis that was especially points a deferrals, retention. current was a more as there which And compensatory so And ongoing arrangements I component we of there. year. But ultimately higher income performance or about level a year-over-year. significant last associated was of last probably One and percent would million saw grants we That last two comp saw one also deferred additional year-over-year. a compensation. on ratio compensation impact for about things up that ticked probably XX% away. was tied the the to that I'd operating saw acceleration is, fees say as really what that rather year's and higher should I'd year defer also certain is compensation That fees crystallization it performance of ongoing, the so up. about fees acquisitions. migrate $XX a level the with that's definitely XX of And one-time, of there's about by of our of $XXX million we Obviously, large is to

out. Now has that been that settled

given on So the the about increases, months. he salary it Larry mentioned And or the XX that's comp rest more it. impact all on about thereabouts impact let's to have basis of of tremendous as which the call our significant a employees expect roughly but our financials talked purely this a would both is effective base very could over it Xst, that date of year. and don't of its think function accomplishments it recognizing a be, I I points margin year, comp forward. basis on XX Obviously, on September the for going isolated last

spending our plans for of -- I think year of gave spend we G&A, the beginning made reductions the investment in of we the we originally and budgeted the on that at terms year. no that you terms to and In have We've referenced G&A we some call. guidance hiring discretionary

spend haven't is people as half, hiring are, make somewhat for employee like on to a mentioned, little much overall especially can probably next us our as so exists think, think but areas, we're then had G&A for I year, speaking, our part the And we for to we obviously lot the anticipated. traveling, if to the back -- think we anticipate again, as it the year. would, support get potential that that's others and issue be think working than a on I as broadly get are And in first had we Larry I I of the of of in second level we're our support at G&A T&E the that we think that plans higher slower growth same year. such customary the the comp. exactly plans. marketing, of one-time I beginning on to There them And technology. was the to you side, of But out sure laid kind around generally the

Operator

Autonomous from And question line Patrick your Davitt with the Research. next comes of

is open. line Your

Laurence Fink

Patrick. Hi,

Patrick Davitt

about guys chances at hard but gain harvesting, either tax the come or handicap or options? Hey, it just morning. behavior everyone. Should change talk via around this specific the in any seeing in point, in concern change through? gains are institutional of rate obviously to you to a retail It's that change hi capital Good wanting conversations

Laurence Fink

strategies. not So the reasons at, of of that really. is talked that Rob I personalization one and tax Kapito look about maybe customization efficient the mean,

there don't portfolios. think excuse think to I is personalized think I what's it's think the changes I awareness think add? as motivated behaviors these are don't and tax reflective are have the RRA taxes. people But awareness, real in that's after ability board, changes or now do create related -- just to But across the more channels. -- tax customized, of it's seeing be becoming any the the you yet, I anything to returns me I potentiality in dominant a going efficient And of much to in greater Rob, think driven. I don't

Rob Kapito

in. they much a are more say typical mutual than tax it's are why fund people ETFs, are is which efficient towards reason that I'd another tool No. moving the

So, another growth actually it's area for ETFs.

Operator

question your from Jefferies. And next comes Fannon with Dan

open. is line Your

Laurence Fink

Hey, Dan.

Dan Fannon

Larry, of number history. big more clients in curious, just you of calls some on you or to and with I was obviously or you're used kind near that you today, much largest the morning. those mandates. having And are a conversations bigger these those previous you diverse give mandates backlog flow were mentioned in you and dialogues hoping of size size kind Good but more help potential picture term us can the

think can the potential we about So there.

Laurence Fink

be CI platform are fiduciary large and the that is referenced mandate, is last -- a at that. few done I the and to about of provide believe [ph] do had call. -- with -- just the do then this really on is All are this efficiencies? few the and focus have that have more And outcome some don't -- I on under you're Well, importantly, we think Yeah. participants? we other not for create We I wins clients I most thinking behalf better it's to the pension in their outcome participants? funds BlackRock better British we of for we you right. we believe this how like going be when we it to -- we value do the we're and can of their about a think of of a when But these virtues Should can going Airways beginning proposition the this organized. and very And rethink But quarters. participants -- do a

framed -- want being provide with certainty more, having and are can underscore is these reimagine These contribution LifePath transformation to large be to, many that the better period to can during are and broad needs are solutions of the across we large how These different how been based we've broad we the of be could are the rethought. how to dialogue in And the lead build based participants, solutions and how on. How better we of outcomes, the retired Paycheck could between closeness focus and on we employees, that on employer and the time. No in focusing can deaccumulation business provide they to opportunities reimagined it. the deeper board. defined too. that going a can employees but than and focusing better the be when portfolios very I We climate what bonds some

concluded believe I the talked These think line see where we outcome the speech, other a is so, whatever that truly that And relationships when because of this, generally to to above about. We're This more become is of at we've it's a dialogue focusing of And flows the active focusing them believe you tax we're my future. our better focused these measure flows. you is deaccumulation the British efficient we I then sustainability certainty Air the making And something across the we active -- how is assets, on on the related as -- think role of I overlay, resonating the believe above in because it in time. and just focusing growth that. outcomes with needs me investments about and staying follow. and and past during what our so I what on clients, are about providing or making going and And assets, organic we you is they're this that our deepening I driving on portfolio are doing. investments And and do would elevated and now are client Gary we firm no And periods strong platform I strategies, the this say like sure differentiated. time. index differentiating as help type at that BlackRock, spending to related are have what's ETFs had seeing investing X% -- And performance And have agnostic opportunity. when have more leave about that are continue whether in can relentlessly and can I in or are of let growth you're type board. it's believe front of to in more. of the of to trend And unique what are do more could we what talked

Operator

from the with Citigroup. And next then Katz of your comes Bill line question

Your line is open.

Laurence Fink

Good morning, Bill.

William Katz

okay? everybody. Can Good morning me hear you

Laurence Fink

Yeah. Perfectly.

William Katz

Okay. Wonderful. you. Thank

questions, for opportunity. seems It of rate? sort Maybe organic long Thank opportunity, question growth where a about last from? on. I'm on the talking things Great you're -- going then somewhat but you your think coming is sort just So, the point everything part update. like up here Larry, of just unrelatedly, start what thank morning. sorry. Paycheck And this two following you to X% interesting at very conversation That's and One, has taking about share you. upgrading but powerful two do your that tail on

Laurence Fink

platform. balance as him. because he Gary, tethering the Gary also of I'm our the that our really provides And going me he is a and -- let answer CFO one is is to -- between who the

Gary? him, love I so, And

Gary Shedlin

appreciate Greatly thought. Larry. that Thanks,

surprise you Bill, answers a I've on traditionally hear look won't you that that it to So, the I given that. of think same lot

feel we think good going very our forward. organic potential I growth about

platform I think built. the it reflects we've

capabilities, great it clearly is of you the type that reach, investment seeing I range reflects of somewhat we're markets also tied risk, integrated growth as that global result full performance. of in. And some think today, know, we're in growth the particular. think of environment I But a as to

fast not look five actually done X% too think at we've get try to base we've focused of but particular averaged on I you we if a the grow across know over is And what in fee we how a more -- environment, actually doesn't years, that Larry the while last look amount I I term. necessarily cycles. we've growth of so, more And And not last environment, this really the think the like on risk organic over important piece although five really years.

we is see the think we that back, markets reality fall I positive. the stay when

negative, was to in is right still where more the think And X% industry in basically XXXX the would look, tough remind is going in positive industry thinks I so even I you industry of also broadly where terms XXXX the we territory. markets, everyone were and And like grow. around roundly that,

that, So because where we of premium comfortable at X% we're at platform. is. solutions will, our our and already growing, if you technology feel orientation think of breadth, a XX%-plus we because our the very to And industry with

feel we well and continue a we're play role still is major market low illiquid, When investment where the digit our share. positions in active. think growing I ton generally in maintaining places broadly, run good secular like places both of think very we We like a and in to share room we ETF. like feel performance more about growth have to to as single

we feel until the we and for moment, out the other side, that. target relative this through the where going cycle about good performance So, and get see X% very to is come our we forward

Laurence Fink

so United redefining the specifically contribution as try I business -- U.S. frame, based is Paycheck, it defined in LifePath but we're States. to

moved it away defined we a world. contribution is. to think of I was trillion a DB, big has creating find retirement but gap. in We that's as ways what is it to -- from need certainty better $XX globally need we But -- retirement more rethink a

closer the find I the years have way of And think uncertainty in there's being that we think I years in this focusing great it the Bill. think robust years big of our opportunities. problems a of defined And I just this And to to and conversations for having or we've been problems retirement. reimagine one and have to is we're benefit, to having defined something but the society to it's a contribution this, today, contribution or is try going one redefine still business. on way. a And defined reshape on

Operator

with Cyprys Stanley. And from Morgan your question Michael comes next

open. Your line is

Laurence Fink

Hi, Michael.

Michael Cyprys

Thanks question. morning for good taking guys. Hey, the

on but a in you I could the I just that. up had we was the then was you Just Aladdin. slowdown question I technology update the curious accelerate? implementations, spoken a us past here also on up quarter, think that And can hoping pipeline. recovery but the if was revenue, just had services think than the bit ACV reopening, the a about recall in the here, higher given you about that on in see XX%

definition hoping just between some services. was I there pieces So, the the you unlock help and of ACV could your technology moving

able the think I fees consulting the be Thank excludes much just relative you fees, overall of to how is ACV implementation your line. technology you. and hoping that to quantify services might some

Gary Shedlin

Thanks Mike.

So, but pipelines, Aladdin again, to very we give tonality not specific some we're will get you growth on on rate. going

to is to number going low products, that new most been. importantly, And costs. that, by as of we've So, reaffirm that revenue. continue minimize going financial they're geographies, continue that, notably, that it's and talked under reinforce is and I expanding we'll clearly is relationships all to be We but mid sources client to to technology about, pipeline of relationships and whole forward Investor number it's vendor services we other think through as functionality teens to a expanding function their try gaining that expanding our of systemization, feel greater under and for trying what and the basically to Europe data fewer be obviously at funds down growth penetrated on. clients, of rate With ever clients, strong And of Day, growth more our and said take as demand going a comprehensive things, given number platform involve primarily enhanced into insurers, with relying the solutions asset we've Asia. managers, -- existing for companies service as COVID portfolio a there's accelerated increased

as of relates And we up correctly business eFront -- was does, model, that its it you note, to do in you ramifications. to model, terms hosted say, the of accounting over to its opposed as migrating As we're have a XX%. ACV, bunch traditional Aladdin different as ACV have

metric, the better models timing away reflects overall we so, to put because of and migrating and And as over. out ACV momentum business, decided from the some the it of key accounting performance we think takes changes a

early think faster I So, would term as And given be you XX%. target. a longer year of ACV at from I And of up in correctly note, the that's we our sales highlighted than days the of probably that's business more expect a a was ago rate, also longer some that coming pandemic, a the as rapid was periods. a cycles through and we function little delayed the today contracting to think

growth little So, of definitely seeing low reaffirming mid bit teens again, but an outlook. we're there, to a acceleration our

Laurence Fink

going would One just major is believe this risk is be Europe data in to to Aladdin, looking analytics why data since to we is for what been thing in analytic further going -- across are going and opportunity -- Aladdin. this way week, believe acquisition the analytics add terms going is alternatives and demand things. clients to our grow analytics space and on be we've I major data and do -- the all this in there's related we've witnessed environment on be portfolio. component one comprehensive for Aladdin data having so really, going add sleeve Climate to building really differentiating the a important. is why our across of of last Aladdin and across need analytics a the data is eFront The of to my and alternatives integrated a the to and exponentially. And for to aggressive major out And a or lot the sustainability before be board. I two meetings is of and

Aladdin to and for movement the the overlay and some And helping component of major climate, major overlay it. and related that's method role, if tutorial Climate. be you [ph] demand if markets to a having us going capital So, client be that's clients going into you and a drive and now that change is to sustainability alternatives, that demand that's why

it our So, as with I'd you from client relationships. that. moves away leave

Operator

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

Laurence Fink

joining operator. in everybody for and to interest call this you, BlackRock. want I the continued thank Thank morning your

thinking the Our to investing their worldwide. BlackRock's remains a full and needs on second are on our and of quarter the results, first commitment fiduciary result focusing importantly, clients focus again, see and opportunity a anticipating of I tremendous steadfast and clients commitment in ahead long-term our future. the all

you you then. We everybody will continue to Bye-bye. that deliver ahead. and value and years asset Thank a remainder management great invest talk third part have lead in stakeholders our the business so and we many for many, the to summer. long-term of industry could quarter, have our unless to a hope great And the again

Operator

concludes This teleconference. today's

now may disconnect. You