BlackRock (BLK) 13 Oct 232023 Q3 Earnings call transcript

Good morning. My name is Cynthia, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the BlackRock, Inc.

Third Quarter 2023 Earnings Teleconference.

Our host for today's call will be Chairman and Chief Executive Officer, Laurence D. Martin Officer, Financial Chief S. Fink; S. Small; President, Robert Kapito; and Counsel, Christopher General J. Meade. you. Mr. Thank Instructions] [Operator you conference. begin Meade, your may

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

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

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

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

third quarter XXXX. good and of everyone. Chris, pleasure morning, the to my Thanks, for It's present results

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

release be I'll Our financial GAAP results. focusing primarily both earnings as-adjusted our as-adjusted and results. discloses on

XX while time weighting including real years, that returns benefited uncertainty over mean weighed for bankers. policy central certainty have industry waiting This XXXX and periods XXXX, the for like to consistent hikes for from many and positive in cool flows, portfolios. with cash. first return can last clients BlackRock, term, here more In to the Investors policy the at this Rate on prior generate has inflation of XXXX. able short XX has months earn nearly been in a

about re-risking and offer news. rates but We income to and into stay bankers longer. meeting, forward and Federal higher points to September's investors begins global pause, good path more frames the interest It this rate central Reserve entry investment to portfolios. will is think communicated a fixed At keeping policy guidance time equities that decided clarity steady, for

used greater on to We're help rates We've assets markets, of and and following the stay to to close insights, the never portfolio period certainty yield providing deploy to clients our BlackRock, we prepare clients. shape investor of redesign pause. advice this At solutions terminal curve.

$XXX X net billion with asset XXXX, Clients first growth. of entrusted representing in the inflows of total BlackRock X% annualized organic months

to clients third While engaging as are accelerated actively result the cash our more to portfolios flows, believe managers our quarter clients reflected fewer period. BlackRock. do take safe be trend clients' haven a are will in they long-term business We consolidating advantage of decisions of of this as with redesign with

quarter index $XX average market-related been flows Third months, fund redemption the client and net levels have gross last outflows. $XX billion of would single billion and a XX% excluding positive, sales XX ETF of were over meaningfully precision

So strong. client remains momentum

share These are Today, per these their over ecosystem this in assets of our investment, XX% $X.X earnings clients. use our increasing within meet clients is business than staying a to of $X.X trillion ago. technology time up year Powering income of combining portfolio period. X% we trillion servicing units BlackRock and and and Revenues as numbers X% are for higher needs. specific platform operating higher, manage trust a increased capabilities,

and access our service. but platform driving client remains on focus organic the lift expertise our is fluctuations our appetite growth approach BlackRock's lower risk clients This revenues, industry-leading world-class unique temporarily and over term. or platform to delivering AUM Market and opportunities, through client long may to

billion over asset of build of working. trillion $X just the relationships bigger term XXXX grown with Our BlackRock. over in XX strategy inflows since that is to $XXX base our with the long Clients and We've the are last of choosing net start over months.

rise the growth be what above to our X% challenge takes long BlackRock. in of term, growth it the have ourselves base organic to envision We know over target over that shareholders believe we clients consistent the any and we don't group long We to above to our fee quarter, well target. but high given organic and peer in We've said fastest term. continue durable, our before expectations grower strive we drive that

$X redemptions net $XX a of and strategies equity relationships fee lower were with often represents billion overall quarter These client-specific clients' fee Third included BlackRock's X% index institutional allocation portion by of index driven BlackRock. billion less base our Institutional than of total total lower inflows are changes. index fees. only equity

client, is mandates strategies. single example, active to the working billion us For from in results client and with redemption extend included $XX but its a the

redemptions from Total offerings. quarterly equity and and precision outflows higher retail organic annualized reflected ETFs net liquid X% base active fee of alternatives in fee decay

over Third year-over-year, average quarter higher services on growth, market by foreign organic impact revenue of the X% AUM, movements and last exchange technology months higher revenue. $X.X driven and billion XX the of was

a of lower reflecting a income $X.X tax year-over-year. year income X% up $XX.XX was also Operating effective share partially per of to increased billion Earnings offset by ago. nonoperating XX%, lower compared rate,

XX%, quarter tax approximately $XXX tax certain benefits the resolution with reflecting matters. discrete as-adjusted rate was of for Our tax associated third of the million outstanding

tax a differ the estimate nonrecurring or tax of in continue rate or reasonable XX% because legislation. We that remainder run effective of potential may for to changes tax XXXX. rate projected is The discrete actual items

noncash private of gains, Nonoperating net included the equity results value our co-investment the of for gains portfolio. in driven by quarter mark-to-market investment million $XXX primarily

reflecting lending and organic higher positive securities and $X.X increased revenue. revenue fee base positive the movements base average market exchange billion and foreign year-over-year, AUM, securities lending X% fee growth of quarter impact on Third beta of

basis the lower to base changing client was was of On X%. our quarter. of Sequentially, equity non-U.S. compared second and securities markets favoring due basis, fee exposures. preferences of and day X fee equivalent X.X to risk rate up This revenue lending effective lower count underperformance lending revenue, was risk lower fee an point securities approximately annualized

estimated toward an base of with dollar fees from equity a reflecting the result third of alternatives. appreciation, of the global fourth decreased million liquid of end primarily As than impact bond rate ago, revenue Performance approximately from year and X% for base run fees third lower fee including depreciation our $XX continued total the entered quarter. quarter, a lower market the quarter FX-related we the

licenses, was revenue up renewals services offerings. of also accounting their client a revenue eFront the from for eFront services a services to our by half for treatment driven renewals. of year ago, benefited technology technology revenue of year-over-year contract recognizes sustained demand the from Current several of technology on-premises Approximately which compared time large quarter these renewal. majority technology at Quarterly increase impact resulted of the revenue XX%

capabilities XX% value for proposition ACV driven broadening term, clients. value, contract the it increased mid-teens year-over-year. Annual We over ACV, by and the growing committed presents growth long for low- Aladdin's technology to or to remain demand

guidance and was At direct a in XXXX year-over-year. distribution present, year were partially end line this G&A In percentage spend. expect full fund high-single-digit expense fall offset we also Higher higher communicated with seasonal technology Total planned of X% of lower servicing to on marketing low compensation costs execution G&A outlook, would by of and spend to core core previously and expect increase. mid- fourth quarter the G&A. and increases investment reflect our we to expenses

over favorable last operating year up impact ago, Our margin a revenue the quarter XX the in year. on from points quarterly as-adjusted from part of benefiting was basis market movements XX.X% of third

revenue propel in cost Our growth operating be prioritizing look expenses, operating potential. growth. and investments opportunities align driving has spend with through technology drive investment organic to differentiated more scale growth to automation, delivered leverage. and We're our and generate and platform leverage time, profitable through find to we strategy fixed organic disciplined variabilize We'll aim and to scale

drive Our capital consistent. invest remains to return efficiency our initiatives cash of then shareholders share repurchases. management and or through dividends either first strategic strategy excess operational growth We a to combination and scale

we acquisition a of adding private announced investment Kreos part to During the franchises. our strategic partnership minority venture debt Upvest. and earlier markets Capital, capabilities this with as third the of week, credit our quarter, And we closed

Our extending in into capabilities scale. and our of revenue private pools M&A focus industries on markets, building tapping in adjacent is technology

quarter. shares repurchasing conditions, worth our subject We guidance plans anticipate in on we of least present, for common our the the capital market consistent in based in January. to of million at shares million quarter, with the and still third fourth At $XXX $XXX year repurchased previous spending

total BlackRock environment. but we activity, third impacted institutional of which billion low-fee equity outperformed quarter, by billion challenging of were had again was net the not industry redemptions. immune has of what investor inflows slowing a in BlackRock once to index $XX $X in overall an been

equity Momentum income fixed and inflows Overall third billion, in net in certain ETF market-driven products. core inflows ETF precision concentrated redemptions by billion fixed and were our income of $XX ETF led $XX business continued of and impacted billion quarter, by $XX in respectively. flows net with the

seen, on industry net typically XX% In closer a the seasonality of with historically results, of in we flows rebalancing has these as end we'd quarter expect get large ETF related for ETF acceleration our to to XXXX. flows BlackRock we've been quarter see annual line the of iShares inflows. The strongest fourth when an to planning. tax year-end ETF of and historical been BlackRock has beneficiary ETF average,

retail of billion strength net alternatives, equities by low-fee index industry cash and redemptions. active pressure $XX mentioned partially With the haven safe liquid in offset index billion net equity providing outflows in positive Institutional through continued Aperio. outflows SMAs returns, previously $X reflected reflected primarily of

redemptions, demand $X was fixed markets outflows, inflows a Our credit. billion billion impacted infrastructure and outsourcing partially capabilities. third of institutional of to quarter, We've private by primarily see and handful driven strong partial target alternatives the generated and illiquid our of built These by illiquid income, active net our including reinsurance demand date, for We activity. which our across franchise continued experienced years, $X were outflows strategies. we offset alternative multiple active net client-specific nearly by capabilities in private continue for from

bigger our our and deliver deal relationships teams drive flow. grow differentiated BlackRock world great and markets with tech investment private vintage flow, great vintage. differentiated and data, seeing mean only can better across we for opportunities clients. and over alongside great for the Deal performance We're BlackRock's

our by co-investments private launches. can unlock our We're These funds, revenue financial markets earnings shareholders. fund to using activity investments seeding bridge and potential and our platform strength investing future as new we for successor facilitate growing scale

offerings are to management net decades. X inflows yields returns. cash seen leveraging who the scale also cash using to engage Finally, to in integrated but and with funds not earning billion clients nearly returned manage quarter. attractive not in Money earn only We're cash liquidity, were our to $XX market

environment the clients XX asset asset BlackRock management Nevertheless, slowing in pause, The actively last overall growth We're what to is organic base the for positioning We staying growth we significant consolidate believe with resume and allocating opportunity be to clients clients unlocks. connected our share and as can our relationships positive massive months. deepen assets. industry. fee they see has delivered current over activity some macro causing and with

strategy clients Looking ahead, platform and for resulting multiple deliver differentiated expansion operating in shareholders, and in time. sustained we believe both our growth, our continue will over earnings leverage organic to market-leading

With turn Larry. over to that, it I'll

The and to you all that support the or our of continue at Thank shocking has like has ones loved you, all thank lives friends, the our will violence everyone Martin. by heartbreaking. everything in innocent for morning, the saying Israel. to acts colleagues been truly and Good clients We with thoughts can impacted family are begin BlackRock call. and to do our region. who loss joining I'd in and terrorist we

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growth increase $X.X inflows in XX over the investment something with in improvement AUM, this our management margin to net in market share BlackRock per in a over serve manager BlackRock's the entrusted integrated with Clients end led is to asset has months. and Sustained alongside expertise, $XXX same can no billion over environment have advisory, with provide. clients last technology XX% growth positioned uniquely appreciation other us and an trillion organic period. earnings time

and large organic alongside Aladdin growth renewals clients. We've XX% execution, disciplined and markets, both Through success and our delivering major Technology differentiated for reflecting invested for and client power in grow We clients financial profitable revenue unleashing eFront increased remain for BlackRock aim shareholders. growth, opportunities to assets service our for from private technology sustained earnings portfolio margin. revenues to committed and ahead of whole year-over-year, several demand solutions. drive we

changes models, most traditional fiscal extremely Structural all, and in of the last secular have monetary policy and business and, asset management. X made challenging technology years for

consistently grow differentiated fee BlackRock's us the outflows, seeing positive model to With of has base since enabled our clients players organic with majority maintain business industry growth XXXX. and

investors they uncertainty. September. banks July start are retreated The treasuries its August saw to to climbed XX-year trends a against rates and longer. as low-carbon highs being macro continued clients and keep system through intelligence, anticipated a inflationary in S&P for in globalization, advancements were rewiring XX of remaining technology the in forced artificial best XX-year but transition evaluating. and Rapid fast-evolving populations as X- policies to financial economy, are lean face years, higher all Investors Central aging tight pressures. and the

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expect higher is rates, As we benefit trillion income positioned this BlackRock comprehensive capitalizing peak with yields. we $X.X on with well fixed to income approach for clients interest flows fixed resurgence the in platform. reallocation our

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now us it questions. up for open Let

[Operator Instructions] Craig Your from first Bank America. Siegenthaler of question comes with

several run So in longer-term bond is in year a depressed versus X were growth market, the outlook. also And a arguably of given the redemptions organic on bear my quarter. flows that we're are rate. your low fee question There

pickup organic income the about forward the you see very think motion? trajectory you could potential be do here? flows and And the how which done is growth fixed once expect a specifically, in So Fed raising, to money soon do in

It's Craig. Martin. Thanks,

few say things just growth the a organic me about outlook. Let and

the in our So XX over positive we've organic X just revenue the mentioned, X XX. years it and in months, last year-to-date. exceeded over X% and average the reached or last asset $XXX flows on $XXX last as long out year, of the I base term. billion We've We, over fee growth, met in last have delivered billion conviction target it

our we good than time together. it's Our target momentum. that orientation, breadth, our based X% our underwrite capabilities. team X% when -- feel good the We it's the all sales see organic management is industry we at technology still And estimates. our we solutions reasonable, we number feel growth engagement attainable better client on looks and product And measures, really do

gross were average the last QX mentioned at at in comments, XX months. sales I XX% our levels fund my As over

of good and So we as those clients. our see engagement measures with activity

one inflows. and On ETFs; is, $XX it, client our we target multi-asset or with at we see in platform and activity had higher billion date $XX across it's billion the this billion sort moves. just right as them net of offsetting marked hand, That That's I the combined from I of a at is $XX on the institutional, it's The $XX numbers. a way in think, specific OCIO; consensus look over flows, Craig, there, by very cash. billion lot and right of some

index of offset equity was with hand, billion $XX $XX from institutional redemptions client. billion by this the other the one non-U.S. On

as think revenue. time, happen doing, would and have little these for they point Larry business. So in have very to we're sub-X% It's the have, impact how to obviously single-digit basis base been time a It's our the fees. just re-balancings, the from we assessing conversations with low flows our momentum positive. But of mentioned, we they very clients,

say institutional us typically is A I'd value close trillion index AUM These index franchise have of has advisory. it's a beyond index And part for large be large to mentioned, business. relationship a alternatives, you've of Larry be to we index fee what only think to of our this meaningful ETFs they rates. $X We which But assets, managed got with mandate relationships, active, equity. or a scaled large good client, it's market. in player overall

long impact that the it that's this flow we look we're and over it is And from to in. at time, We So something number, don't manage business the quarter-to-quarter. the can time term.

base terms and come and redemptions I had mentioned had of And BlackRock base billion move for simplify fees and think $XX really mix. we to precision how clients $X.X retail are Larry this, DM EM treasuries, fee think from ETFs, organic from to which from also of Craig. impacted liquid to it's also to growth, platform in part those alternatives. yield of On We iShares from billion I were outflows unique to X and good clients QX by stay with of strategy our important high areas. vehicles

Craig, of Investor were you'll of showed And products you across fee if our Day remember, to million. would our just that purposes, segments services. our fee 'XX the order loved take different I fee rates And for base from you website the rates and page, because and know we average the those for average be of $XX-plus the illustration public decay magnitude available on fee rates Act alternatives,

of the fee It's in any value, earnings. grown to and rate hope what I we sense time fee things fee have weigh the know over base in a you on and that base quarter. they that growth. have quarter-to-quarter, this on long-term But may franchise So gives weighed added on those growth largely

portfolios, continuing hopefully with base see strategy. generational the about and still and to of global indexing Rob a bit, models. path growth I'm where the Over through scaling in growth growing platform a direct talk in markets, fixed cycle, with We bond investment done, we tax-managed re-risking really we Aperio. ETF will income a little model when will come percent our to growth ETFs, opportunity fee Craig, X-plus see high-teens we're and keep private half active portfolios think iShares, clear organic our

we big targets So to and opportunities those see hit continue to beyond. still

a couple about income? things want say do Rob, to of you fixed

when. the the to concern why, think So I are of the questions and the going most where

yield most it's inverted the is the XXXXs. curve since been so that And the

at Larry value wait, market So and there trillion $X in we to under since have And really are little investors a money assets can time. nearly paid add maybe getting funds that and management. were I

$X that's trillion. So

of interest I'm to the we the is, And large call some their going allocations reason to approach And have there bond as be XX% needs today, are better of that very fixed owning and income. investors risk. invest rates, Over access will And that in years. great is the bonds from reallocation. in less yielding a opportunities there enabling are large the in we very, it with returns XX%, liability to over derive to expect someone the part peak market been sure bonds

well just $X.X benefit our income return, actually fixed comprehensive are spans reallocation Martin and so municipals trillion So said, yield as with platform, curve. which we this positioned the to from total entire unconstrained

alongside with strategies, course, in of and in clients in money now, will will the motion, of income curve it more right their short and, in credit. focusing in and ETFs of build the higher active, with as market be private performing clients So end allocations are opportunity particular, motion, fixed private BlackRock benefit

been So demanding we and year's rate and when? historically of in are There concern issuance, income have expectations. yield policy repricing premium. over a investors market levels from a large treasury a debt spikes rebound And and higher this is following U.S. rate have Well, seen lot stability. mostly fixed

pause both industry the income back in Fed early Larry the So go were saw if rebound we fixed the beneficiaries. the XXXX, periods XXXX mentioned in income active very taper to ETFs in funds tantrum the that flows, and quick fixed following immediately a or

and recap then of expect once in certainty And rate of we fixed immediate into yield we're in and looking anticipation more terminal the term shape indicators for when? income. curve, interest are So the there's issuance deployment of income. I'll it. the balanced accelerating Well, and a on structure more more rates fixed slowdown for A short-term longer-duration demand

comes Michael Morgan question next Your with Stanley. from Cyprys

And your a large years the might large [ about off of to was transformational there. ago. couple talk Maybe open maybe transferal why you're I hoping recall you is versus as ago, couple you that suggested of versus I focus could M&A. that clarify, just what's some articulate be you've changed can Larry, the list help you M&A. and case. if objectives don't you ] could aspirations M&A the what area completely? What's on Question years of mentioning

obviously, execution and MLIM So but our and quite Aperio revenues will we've not transaction, been increase working deal, whether was great active -- it's in That's I the an But deal of foundation BGI the in which partnerships, both eFront we're that the firm the businesses. with and be deals and in examples transformational. our XX% BlackRock Jio of XX%, on, are partnership deal. precision think respectively, those M&A

spent what M&A are quite look I of look back back ecosystem I'm a now there big a now, market all there including going when say billion would are X myself, we and on And changes if lot unsettlement, about challenging the over and transactions, of years. around the bit big shifts. I that $X about today. you the did think And is last we us, was on

at to private different so looking are opportunities And we related technology, markets.

are I'm but the myself think to engaged to we have. more broadly conversations, opportunities in openly more and We the and really challenging team about always

with be engaged, a the They going be across in us different going we're with is not the way displacing That see like and to inform us. those see of help opportunities. They connected. opportunities. Financial. Reliance We the Jio large be the engaged partnerships world, we're opportunities partnership to the Industries Monzo, partnership across more And additive. We

ourselves. challenging we're so And

plays how right probably out. We been are than we more in many lot of years. this we'll all now, And a engaged in many, see conversations have

with Alex comes Goldman Your next question from Sachs. Blostein

earlier. Maybe the appreciate another around I just M&A. Larry, one comments

for you're through like? of have could you like around deal us targets any or could sounds it potential you wide which put So for pretty partnerships. BlackRock lens about framework considering a targets what Can you different an a And kind look yield potential other remind financial accretion? a EPS from

off going I'm hand Martin. to to it

Martin. it's Alex,

always M&A So look the growth. we're we say organic about Larry look has clients. have about of strategy of delivering here at that been capabilities and centerpiece when transactions And that and/or look derisking capabilities the been when at has you strategy. you at accelerating It's accelerating don't I'd for the when hallmark It's developing building. been about really that's center about, of growth Aperio, eFront, talked and organic the many the you

as X said, we've the about We're spent years, Larry last capital constrained. And in $X M&A. billion not on

capacity. debt ample have We

drive And so our to M&A. acceleration also through deliver more and to is clients goal able for our earnings be

to one related thing want add just would double to just I Martin, I down. that. more

capacity. lot a debt have We of

we're lot when not on be opportunities. to And a going have really refocusing one we The where could a I integrations can We we of be thing boutique. we you, do that additive. tell of are firms,

We to it building are then be organizing out. going it and

to opportunity boutique part organized organized whole is having a -- it's love Aperio, a big the We But a not around eFront. love of it We It's firm. fragments. the not different Aladdin we're building of but ecosystem.

a to We in in organization, be additive revenues, and in technology are connectivity in unified as Martin building and reach product. reach, in said, additive reach client additive

Jefferies. Your with next question Fannon comes from Daniel

I hitting businesses and higher flows, of alternatives, on your fee maybe those Can segments and about equities think target. in contributors talk both to question outside you active you base trends fee the Another long-term key about XX for XQ? for just growth you alternatives, both, of we the funds and XX, stuff also as obviously, then kind really, active the the the think next But segment? months, seasonal equity think but outlook

question. the for much very Thanks

to active BlackRock, the $XX inflows, We've billion XX%. generated equities business the a our over we see active business So active about when equity continued equity in net AUM X over at I average has last while grown very think by strong years. had

of to we the quarter-to-quarter it's others, this rotations fundamentally see, we see part so big this the really ] in some the and and theme, business. out equities again, environment, cash, And main call [ many portfolios. still has client strong been growth And of of we'd and while, a in fully particularly year-on-year, expect into which I think think,

product you've business which we've been over be and think do active ETFs, we'll active seen our active I time, transparent example, adding, businesses. strategy, other in growing through our our equity for

we time of integral so multiple growth strategy. being over base our about think an as part these delivered and wrappers And through fee

careful about be And let to that through bit definition index we we prefer have models. are call of as people both knew their add little all a originally their I of would with active me our and say to ETF active what to because alongside it's the ETFs And because just we active products.

an been believe to where there now more And add are going have because I greater active flows? alpha to environment flows you will is has add to continue When more when can active into And going there than opportunities outflow. before. we're be

XXXX of some we is from year-to-date, which seen different in $XX we've of require And that industry have billion that to pockets outflows. passive the So inflows that net management. coming compares more active active created part than of

These continue strategies. total we demand return the in and bond are strong private income-oriented the So LifePath. see equities, in to strength core markets in in

we've inflows been out that's lot forward. So quarters. active flows that of just with and of going upon since performance. active to an clients depends to give the our And been will XXXX, have XX positive what in And also able drive promise you a keep XX idea, our to

I in last more would enlarging thing we have just platform say, committed One on iShares globally. Dan, this, our

look in you the what the going doing if actually U.S., that's last flows part be at think integral are in the flows of in Europe, than were I of ETFs In India. trends year. we're lower a year-to-date, ETF But to are ETF up little they an the XX%.

winning instrument our passives, to and rise active ETFs of and its continue a we instrument platform an very an is we're of in that big of as But share build And beneficiary. and markets in of globally, instrument capital become business. Europe, of large utilization as what exposures we happening out market an the the

with comes Brian from question next Bedell Bank. Your Deutsche

seasonal being much sort we how of, they or for to more first bond could reallocation as just that? the is back do to magnitude pension might of yields clients? angle that guess, switch of portfolios this timing And they talk of year-end? potential longer-term income, something immunizing prospect their given of sense have I to you of that actually plans it go if the do Or Rob, improved. waiting is sort fixed the immunizing then Maybe, the or do also yields different by peak a with to institutional that, your of you all, What are plans

world. I entire immunization already. large-scale mean see U.K. major the pension the plans component A fund benefit U.K. been question. defined of consistently have immunized Great we in market

$X years, more have billion immunized. last about and moved another the been to more and $X out Over X billion

inverted, X%, I don't if X.X% flat when steep instead becomes see if the you're that or see or But happening X.X%, we peak a yet. X% at yet to yield that's environment curve rates of long at more it. going

seeing of shape the immunization. people about you're thinking I start curve to of the more where yield and more think more going it's

And long-dated Unquestionably, money see put will, margin, permanently flow, depending pension of on it to equities immunize. bonds. the go it type on some out going into moves market you're equity as of pressure going funds that to the some and is on

We are that. lot having on organizations with of conversations a

rate. reset see now because course, higher to at I getting more are our so state are plans, And a there -- their tell plans. not few significant And that, rate of can you're are quite liability corporate you going lot to pension funds matching. is has de-risking. there closer of been They -- a a This a to

XX% way. I Instead return. X%, very of extension companies in to in flattening I looking we now. of earn bring more that's think And alternatives on to really returns now. actually think funds in and a to interest that's bring higher market. more to their level income-oriented in X%, is They're we of to a exposure components significant would lot down focus out right of right that get the exposure their, pension alternatives equities, seeing some curve say, treasury are But yield And take type an I down and seeing are But returns coupon duration seen their evident credit we shift -- with and that, lock infrastructure right higher major now. the haven't of trying why at

you on do Rob, to want up that? follow

couple heard to rate-driven. the add I'll very think pension several visited plans we've we for a That's a Yes, about haven't and a things. immunization because time, long talk I Larry, it's speak great for been question I word just of very, really Obviously, by that.

to if get. want to I have of XXXX, think be a bonds all can going in X number you history, is return. do a plus and And portfolio that going the you X.X% a to they're little to get have

that with together before, add environment when be that coming. I described the So might you

Now technology. do of there's find sure a don't be. this complicated, they were been step it's have to and a not have to before we the the they of barbelled. beneficiary these plans. They're lot hard very the could the And that too that. they It's locations Finding the what people reallocation that in are,

been we the significant what we've appropriate beneficiary of call to the So through amount help we had a business have wins them that And business. with large the in OCIO reallocation.

I into We're away. lot will next to really that happen we think it's a in in But my of as the immunizing the very But big the things lot in said, the answers, institutions going portfolio. could of adds participant which, be be previous be that. bond in done before far fire really where a market, course, then. stage fuel more may Larry And to of rate-driven. not that be have future might the of a that,

question Hawken comes Brennan with next from Your UBS.

time about pencils have is all on when here you curious it's all the G&A, certainly on challenging. now, the Martin, as thinking environment well on environment, are budgets into incredibly -- beginning hit several core here year. you to coming the The times you expenses next BlackRock is today, sharpen of but the right Just positioned, of kind is into your a range about here. spoke end which the But low to probably encouraging.

you how should our today? we XXXX? And how models be so about we And refine thinking thinking that are as about

Thanks, Brennan.

this percentage quarters. full mid- the low of end reiterate, I our we as keep said increase, X Just previously fall in will year, flat to on committed our we've for G&A expect last high-single-digit to guidance year accept of broadly headcount the to still

that leverage to our organic we're I in investing profitable just When policy, and looking more to flexibility in the a growth. heard differentiated that last margin think can drive for more deliver And our to higher and margin, suppose growth, premium concentrated for add values to we're driving longer few calls consistent capital operating for organic base. on growth, make efficiency, higher about rate operating outlook deliver we're again, management expense investments looking operating in environment, on I for places strategy on focused also but cost you've

productive. things natural many can BlackRock There teams over BlackRock for learning, But launched we're even XXXX. using client more looking to footprinting. software through going back our exciting these that most We cost And artificial in and we been pricing, happening that most front. engineers back systematic trading, at and intelligence, on Lab We've automation drive design automation, our are things scale language Brennan, service fixed years. our technology, operations, importantly, organizational have how processing to business AI XX comes all make in machine scale we so

investments a annual dollars investments if focus forward expense by and largest So that's and ask are billion importance, I going BlackRock you our our our me where employees. particular operating going we with at to of about $XX really fixed sharp total eye, look talented

and tools looking clients profitable self-service, of our some enhance BlackRock models those we'd our that more to to opportunities CRM, help our I where like think, be So be them tools to are customize towards large better expenses. growth productivity, to going and language Advisor deliver, giving long-term best Center, from

with are that neobrokers, great to commercial investments But in venues. alluded wealth other TAMPs, got Larry digital we've Those think I distribution platforms, also, are that partnerships.

be some invest fixed that. we'd M&P. will of So It

all for be Some growth That's about. outsized I've that And to to organic our distribution talked some for to premium margin going efficient expanding and variablizing accelerate look budget the will the optimize time. But in iShares expenses of BlackRock potential some over and of of growth more have other servicing, our us which it gives investments. and variable resilience. is most possible they the way XXXX

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

for the continued you, joining Thank interest us you, Thank in today operator. everyone, and your organization.

And great the want to path more ] BlackRock. a good opportunities clients of I look see business and path, [ rate on Have more are are people delivering work underlying for do seeking believe opportunities quarter. incredibly and you the money strong. ahead there our movements, BlackRock's clarity you, gain shareholders, investors. with geopolitical investors opportunity to as our your to related we being remains issues thank put forward momentum our continued interest. more to for I for And

teleconference. This concludes today's

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