BLK - Earnings call transcript Q1 2020

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Operator

Good morning. My name is Amy, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the BlackRock Incorporated First Quarter 2020 Earnings Teleconference. Participants in today's call will include Chairman and Chief Executive Officer, Laurence D. Fink; President, Robert S. Gary Officer, Financial Chief S. Kapito; Officer Shedlin; Robert of Solutions, Head Chief Operating L. BlackRock and Head Index Goldstein; and iShares of Global and Christopher General Investments, J. Counsel, Ramji; Salim Meade. noise. mute All prevent placed have on lines any been background to After the speakers’ there will question-and-answer be a remarks, period. Instructions]. [Operator

you Meade, your begin Mr. conference. you, may Thank

Chris Meade

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

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

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

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

Larry Fink

everyone, for time a Chris. thank people. you, the Thank many is for and morning, this I difficult call. Good know you joining

families, staying So friends, first and your and are healthy neighbors your foremost, I safe. hope you, your all

so risk to and working putting everyone and I take of you. want the to thank women the this country’s. health health at and to all for today, nurses And own to of the their the for our front moment our to and on hard men crisis, a and I at BlackRock, gratitude line everyone doctors safety the of express Before support begin, communities of women, you

of to my transformed the Shareholders, has environment. working Letter COVID-XX living months, all in just us. world an wrote short In Chairman's for the I few As unprecedented we’re in a and outbreak

has challenges tremendous around for reverberate be entire lasting that medical, years and the small economic and world, for industries, individuals, human come. large, every to businesses, for long will will and government presented it As

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recent the inflows the the experienced benefiting quarter of in most volatile we've inflows generated iShares history, of a year. billion billion in first from of $XX weeks $XX net seven in

in the factor history. lineup equity investments, sustainable inflows diverse its quarter $XX core to net strategies growth, continue best with in Our ETFs product of and drive across sustainable bringing billion alone,

expected them to precision use Despite ETFs exactly driven actively outflows from income as reduce portfolios, clients reposition stress. fixed during market and market performed risk as segments, these

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lows, our at are as BlackRock our historic a to make capability alternative to the diversified duration With benefiting interest globally rates sourcing build continues illiquid clients investment they strategy platform, -- long global back across investments to their meet and to took differentiated liabilities.

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has XX% today client or investing. I'm demand capture fundamental the equity and one in well months. portfolios as performance peer the been for move enduring strong above sustainable assets We positioned are the confident active of clients one reposition more seeing volatility, market Throughout to coming with is our recent business median year to the their benchmark trend

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our employees call, stay the world, on around and and To healthy. everyone the to please our BlackRock’s all to shareholders, colleagues safe

that, about to it turn results. With our talk Gary I’d like to financial over to

Gary Shedlin

everyone morning, their good our are everyone. for families call and safe and and earnings hope and Larry, healthy. you remaining Thanks, joining Thank I

performance and I’ll XXXX. and review of for briefly I Salim, first financial our Before results turn it quarter to over the Rob business

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that crisis during deliver absolutely to was employees ability and clients, Our for shareholders this global by sustained commitment.

momentum. mentioned, entered year the Larry BlackRock incredibly strong As with

first XX% billion iShares the base of X% EMEA the seven total year, During of strength and by net and paced inflows weeks growth organic approximately representing $XX organic and Americas in were asset retail. fee

clients as in approximately February, the its and quarter BlackRock seek COVID-XX health saw equity declined by and liquidity. we end economic index reacted and to projected crisis late market institutional However, and the impact retail derisk the XX%

In the X% inflows still active generated net management quarter approximately Consistent with of during franchise. experienced outflows asset and growth. broader $XX cash strong aggregate, quarter the industry inflows trends for of into billion the iShares the organic index, total in we fixed representing annualized partially balance offset by institutional income our primarily BlackRock

fee However, annualized precision approximately exposures, iShares decay fee mix income from lower broad-based change ETFs higher X% redemptions reflected in fixed and favoring organic base active outflows income of strategies. fixed fee

As we BlackRock the growth for like as to unique have discipline this has environments as create opportunities realize them. demonstrated, long

markets. continue are this resources growth we of differentiated reallocate result to impact be determined We COVID-XX, to crisis. offense, as playing environment. freeze decisively We the not to focus we reduce organic as in in committed to where aggressively to to the hiring deliver emerge current one able and our intend from we will workforce year BlackRock once our a will we act this While have remain challenging existing greatest so

of ago billion more ago. up million launch compared year diluted a revenue was with quarter a as $XX closed-end flat associated of income increased tax successful Earnings reflected were X% the share essentially operating past lower while costs non-operating lower lower First of January. by operating the a and fund than in a offset XX% year $X.X year-over-year, current share income $X.X count and versus this of per income, rate of to were $X.XX billion effective impact higher quarter the

first awards Our to compensation as benefits of quarter benefits, included including and XX% discrete related was each in quarter adjusted $XX tax first tax rate million that for approximately the year. the of stock-based vest

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

seed minority as related a reflected during losses than million the for iCapital, million more to unhedged unrealized capital Envestnet offset the income in of mark-to-market net recapitalization investment our were in results $XXX which successful investments quarter quarter. Non-operating our on $XX first completed and by stake investment gain

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services eFront, grew impact the year-over-year. XX% Excluding revenue of technology

continue As detail, we Rob full complete technology Goldstein demand discuss clients more implementations strong range new our remained to in will overall solution. of for Aladdin and for

Advisory mid increased historical of and earnings long-term, revenue to by continue over PennyMac. no cycles as million assignments growth services charitable revenue related transition income remaining up low of may impacted this investment reflecting be $XX management a near-term and method longer stake clients target work PennyMac extended note equity contribution as earlier that sales growth to going in revenue implementation equity-method we primarily to the was year-over-year higher longer remotely. XX% the periods to other and While technology in $XX forward. million our investment quarter, recognize related non-cash result will Please our of we equity this teens

when our offset certain technology services these remote as also launch partially operating lower product to fund expense Total $XXX G&A driven reporting Trust by one-time adjusted expense with of successful year-over-year compensation expense. million related impact COVID-XX higher billion $X.X launch direct year-over-year was including XX% costs increased We with expense, expense. $XX the BlackRock professional II. year-over-year the and million of increase of Health higher marketing closed-end the close, and expense, expense operations G&A, reflecting margin. exclude and by fund associated promotional higher associated Sciences up costs G&A reflected facilitating January The costs in

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non-core adjusted XX fair as ago, primarily legal levels contingent quarter G&A first value XX.X% adjustments. and operating consideration including year down expense basis reflecting of costs, was a points margin Our from higher of

excellence environment. priority Larry this is clients and As ensure safety to serve our current operational our stated the and of to earlier, employees health to best maintain in

We’re over of base more longer-term discretionary continually our in of overall we our will impact prudent the confidently able the are spend to expense be once this months. reevaluating managing focusing and on coming level entire we crisis assess revenue

and focused margin illiquid most always, aware, we growth portfolio laser and iShares, organic a technology centered whole around long-term remain optimizing way the alternatives, As committed strategy creating to solutions. on in efficient possible

even are during positioned We well crisis, much as this for began the growth differentiated we when year. we were

and Our invest and strategy dividends cash share combination our in consistently generation through first BlackRock’s cash then position remains to strong. liquidity of shareholders capital repurchases. return business, remains and management excess a to

Our than products. times in our with cash continue debt next debt-to-equity maturities in to less is ratio months, and the EBITDA co-invest flow seed use new XX and to no we X

of cash by year. and per share dividend dividend in reduce late we remainder to our to quarterly As our during increased have $X.XX previously the XX% January, we’ve announced plans the no

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held BlackRock of providing with reassurance, advice that strategic midst the conversations of crisis. guidance has clients, in referenced and thousands Larry recently this

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continue our performance quarter. strong the Finally, Active respectively number billion $X net of each strategies equity and a and active generate strategies during inflows of to positive flows. generated multi-asset

first In again platform. summary, of the our resilience our results demonstrate once quarter

we’re headwinds not relative the positioned financial results, we we growth. on others can for and better those that emerge as market our impact will and remain have While navigate headwinds to immune have confident crisis near-term this we

growth and focused operating will long-term. highest prudent stability clients of market organic we exercising in and remain needs shareholders. us of diversity critical our our priorities us of investing environments our differentiated meet ensure to while discipline to intend to employees, the variety The enable platform over on generate expense to outperform in our a growth and position the model We of

operational remained capabilities Chief led our and rebuild Operating beyond best-in-class. turn resilient I’ll ensure it to our its over the to BlackRock Rob Goldstein, efforts who walls four With Officer, and that,

Rob Goldstein

through hope are most and unusual just everyone living of And of Gary, and history, that challenging and safe times is staying and undoubtedly echoing healthy. the Gary. Thanks, one Larry I modern we

XX and I been and to and and role Aladdin adapting played key So spend collective next BlackRock our business well minutes how management clients. the BlackRock rapidly how as preparing crisis fluid for to Aladdin discussing both continuity in has have this as a we wanted the evolving of the of situation,

past XX against process offices, BlackRock our volatility to foundation while of in highly asset BlackRock which you since XX,XXX-plus and clients efficient, function. built culture operating social by world exemplified continuing a remote entirely stress. a importantly been almost deliver really technology, founding highly countries thesis and requires market allowed us a This the that around information As BlackRock Aladdin processing is has for to each from coupled has few all business ago, XX and effectively of company transitioning an years a its operating management workforce, mindset, backdrop with and automated know, that the XX is to on spend the One of offices other weeks home obviously to in for effectively incredible our an many

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firm of away this this always in that service continuity Our manual Aladdin great much Personally, nature on automation and be been clients their on of extends have The our to our the and stability important, client as focus absolutely how by platform but one in response To transition to for swept CEO focus been obviously on of it quote Aladdin own has a coronavirus would to this community and more So is planning. article resiliency a consistency essential business to important situation. environment. run and imagine model obviously responsiveness the “Previously must of Without home their resiliency, communication it together infrastructure from have been proactive recent Aladdin.” cobbled our more through said can’t processes a teams of of data Aladdin’s has becomes challenging with work processes, technical even our a the the service, I well. the appreciation difficult. has expressed

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the understand of model, to working impact governmental policies constantly are the new programs. teams and analytics and modeling Our

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as to to relationships. leadership power Aladdin are Aladdin thought led I together. the renewal new very rates community. client relationships, have partnerships of navigate have of interest These led for clients in coupled and get together stronger this continued Capabilities focus relationships believe environment like with this with high contract incredibly more we the doing building lasting our and strong our only will

a also community everyone in in while seven home. were these both working received from quite business we time, go-live remotely. Spain, Aladdin implementations and total mode, like new for weeks and remarkable. never anticipated. a countries hit With had continuity are feedback also the both would is including Aladdin Italy was clients. this full number new the while We fully During by humbled even have truly we’ve in milestone, from built one four kicked client past been I go-lives off It’s first we’ve organizations client and we proud our of Aladdin and times,

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BlackRock one and ever remarkable the Coronavirus technology resiliency in the has BlackRock I’ve projects the of and of witnessed. walls to the outside most platform been and of response Building our efforts

and planning, BlackRock, our years. We many lots lots have This proven Aladdin, of global and BlackRock our One a culture, of is can lots really outside our of over build walls. combined work manifestation hard we lots platform,

market. discuss I’ll how ETFs to have been clients and to pass over invest this it in So now Salim iShares unprecedented to using

Salim Ramji

healthy just sentiments what of spend stays of everyone quarter I’m there wanted minutes are XX through iShares others. I safe echo that about lens points this I next seen to is we’ve talking and Thanks, going that the and make. I to and the Rob. the hope just three way. really

you bit on quarter. little context the of give a I’ll First,

growth to how and to medium-term you unlocking Second, insight performance the I excelled wanted iShares’ talk iShares. optimistic of this sources ETFs is I finally, we’ve the our demand show new into you we extreme prospects major why you is trends, and some client wanted give for And accelerating recent indexation which through to history about most tests and in I’ll remain seen of how some period. during that

of this very quarter first, segments billion. model in that two XX we’ve in product segments across Flows our exposures. seen So gathered iShares reminded environments across multiple which distinct core, I us precision the a and over has strategic course that is product iShares

quarter of first saw segments. nearly $XX across product inflows billion half all The the

each we end our of outflows turbulence product core fixed often the and few flagship in steady towards billion about precision a of February, a worth saw concentrated of solid As our throughout the $XX quarter growth. and strategic But $XX exposures. and throughout flows which are assets, hit market the third quarter lines, market net iShares liquid billion of highly provided mostly income driven very a our

Core largely its equities model with from hold delivered the portfolios $XX and growth and buy growth billion coming globally. segments of

sustainable quarter, $XX market raised with line market share. XX% leader global as Our which billion the us in puts the

in of factor flat index, during in outflows alone. fixed the industry active market outflows $XXX billion roughly during the fixed Our income the factor income of experienced a as ETFs high ending volatility even our high quarter and just saw record saw in across which volatility flows strategies raised and nearly -- $X US the billion, ETFs

clients. our across last in United by we’re have benefit the that build and from investments the and year the were quarter to From second led part across of lens, iShares, States to making their has segment in continued funds RIA And to more are our in, again finally, our back in quarter we direct and attributed ETFs especially across increased to the at buyers with half competitors which aren’t; with last that our behavior quarter to brand monthly the individuals. pull in advisors spread competitors and segment last of in risk fixed client range largely don’t; our flows occurred was our of a wealth commission in share institutions. ETFs. market-driven and flow half in that free finally, market platforms, is outflows competitor and institutional a movement the first we March a and switching The amongst a The and Outflows assets, from amongst we decline institutional index global saw to the largely precision and global competitors most ETFs, income that things. three the have of

have teams extreme the they markets most BlackRocks extraordinary four this would that a poor most said extreme and the for in turbulence. the of But came iShares the of happened liquidity, And breakers, this tests, And thing partners about home. rebalances market-wide one do. resilience billions The for as with and performance. need inflows, ETFs in indexation of better do from just and and access story give I’m most of not just dollars this quarter investors me provided but these quarter tests not our of for iShares, for a what in that for as and price markets talking They we through facts. proved discovery, you is history. our the let way in well real but functioning they under that the important also category, index of markets efficiently circuit face to volatility, market face as of working of was functioned tens

use and the XX% tape is surge, versus to quarter, XXXX. ETFs increasingly simply In the half capital usage. first of latter transfer the investors averaged The risk. ETFs XX% in volatility When allocate of

The that markets. second these fact swings, a through for investors way is access ETFs provided market to better

was ETF was Specifically in many the instances, underlying basket trade it to than of to trade the cheaper it securities.

than million are have traded with spreads the While in with those iShares ETF the of our greater most ADV frequently $XXX than line spreads the tighter widened market, competitors. of

finally, March, iShares market and high last resumed price structure provided showcase markets trading discovery equity as facing prior halts. the implementation in iShares in And successful in circuit of the market. volatility to market five the after improvements on the wide days bond extreme resume market normally. distinct years velocity ETFs to from Third, four trading Despite episodes, breakers

traded five market ETFs grade while times, holdings an have by real-time take conditions. XX,XXX been its day, bond of volatile one times. pricing traded information the especially ETF the average about top on modernizing XXth, example, and To market an iShares March bond XX LQD almost investment contributing just

of fixed multiple iShares markets. asset sub were mortgages, investment actionable classes, income yield, prices even indicators ETF high Across grade, treasuries, leading

Now our ensure our to market that performing as clients expect the are constantly teams monitoring are them to. iShares

metrics of in globally. few those ETFs quality surveilling constantly across several are thousand We a

But especially of trading and volatility. quality there the iShares are periods four you of can to in metrics health assess that use

The a first or of as equity usage, percentage is volumes. ETF bond trading

advantage. As investors markets this and ETFs, iShares, significant more volatile, get turn a to strategic especially is more

spreads metric total proven compared allocators. relative bid is be trading than is how expense more than underlying total why which ratio, The for to just the the to second the and bond cost and have underlying especially tactical more matters to competitors, offer portfolios. ETF efficient costs do market, assets, or iShares equity

premium metric third is The price NAV decisive. discovery. Discounts to indicator, they and one aren’t are but

ETFs underlying discovery one to markets of the markets Sometimes is to this way this, the securities volume underlying is consistently an the and themselves. ETF competitors. than but of providing discovery versus determine Not providing if trading volume to all in the is price the look does iShares ETF trading better ETF in do

indexing is of focused ETFs, there tracking. in across BlackRock. on, not the we something just business but laser finally, entire are This And is

fixed performance points just tracked quarter in the at the flagship, income, in double while competitors iShares digits. example, tracked X For basis

the efficiency our of highlighting with quarter, volatility tracking our The this was lower than over manage also which our of turbulent peers products. the we course historically

new under opportunity set. of unlocking client expanding sources our Now, and iShares’ is extreme performance conditions demand

fuel give three medium optimism me accelerants that just we’re you from and term. seeing that the color Let our for longer

came we even Since funds from been started usage bond to under conversations to to the hundreds growth when income and have to In of insurance wealth showed took clients stems throughout companies modernization We’ve income, ETFs. our of pension The February, ETF reach them what we’ve they had itself. skeptics. facts and of away convert from fixed and first we this referencing iShares every The case, through of market managers large about call: asset them how thousands reassured. the the long-term extreme nearly cases, managers performed fixed

of Larry towards buyers a our we insurance part significant and globally, fixed Rob a asset pension the market market. the another the among income And are deploying when the iShares quarter, extreme first-time more. income that of is even that how and becoming is to is end one of start few movement, fixed which companies investors Towards funds an This about bond billion bigger managers, test saw latest have in is to And technology turn about point slot. proof spoken modernization it’s essential iShares iShares stress, under market. this the

four Our stronger years conviction ETFs $X a is will next significant trillion market even be fixed with for today over income BlackRock. the that growth a opportunity

that The model globally. volatility, growth more plays second management portfolios and themselves, The that parties, significantly in central diversified clients medium simpler, iShares we where through discretionary to accelerant more see often are increasingly the factors more cheaper, ESG. perform portfolios. and core In models of benefits at through of wealth and term. in straightforward. the stems our the manage tend BlackRock ways, the manages model a models and investors, two They’re the times move reasons iShares from especially even better to role in third over

a QX of was the of Models about record should are growth models seeing and United Last accounted half of managed medium account year for and critical term. flows for for iShares’ States, our accelerate. in growth the XX% quarter iShares. over a we we’re of it in think that growth iShares’ area models growth

us think index us ETFs, indexation. right mutual these sustainable now has is But that accelerant just only days. but record the The quarter demand final a funds. manage we third was Client one and ETFs ETFs $XX is billion at early are billion. growth for in across and for major upside. area, QX surprised not sustainable a is to $XX which is We

and seeing We and bought allocation asset are investors. institutional is as by part campaigns, loss of harvesting core parts as iShares portfolios of being exposures tax model tactical

numbers of and and also out IShares across index XXX set products ETFs to is market leading education, that in building a global product now commitment an and on intention but of diverse funds. part and focus the because

diversity easier and driving make predict. one or in to better driven, doesn’t quarter past over market clients, institutional years. of you sustainable I next our especially Xx, to the and weeks. that this grow and expect hope after Xx our segments that to the That of ETFs precision, understand the the going the four are that any quarter, are with We upswing forces the next three seen the we’ve platform. couple Even flows

result extreme our the stronger the history; most But that what opportunities face these The have is are both tests as predictable QX and accelerants and and two performance in tests are resiliency driving. and that iShares of a faced growth in of we of the the things:

remains prospects medium As confidence in strong double-digit asset long-term, growth, looked market for and our we iShares that leadership at and our revenue to strong. growth

I’d turn to with to Larry. that, back it So like

Larry Fink

Hopefully, I hearing want from beyond and of I you Salim. team you from all the for from at you hope Rob hearing this you, Salim a morning. Thank sense depth of Rob, and -- joining heard get of to leadership thank BlackRock the us Kapito, myself.

found in environment unprecedented how in clients also better is resiliency diverse you understanding business hope model greater provides and and helpful how helping our I today’s employees this our a our insights this. us like times BlackRock navigate

doing in ever than strategic we’re help behalf come of for all XX,XXX we’ve recent before. we this another this more cannot to environment And to everything over The employees clients I in worldwide. and areas have to together growth key on believe how differentiated time deliver. made we BlackRock continues be ensure can of is during our years one prouder investments BlackRock’s

open that, it up With let’s questions. for

Operator

Instructions]. [Operator

the of from line open. comes line Cyprys is Michael Morgan question first your Michael, with Stanley. Your

Michael Cyprys

the have changes in firms. technology. biggest of managers asset any of as it managers as Maybe your asset is mentioned And had the you good for one will be Larry, tech use at Letter, you Shareholders that just around to mentioned

are So today? bridging of gap front firm at good I where today guess is BlackRock the and on as state any on from technology curious you what the see the are improving to industry aspirational that as you areas how you tech focused

Larry Fink

am to to answer much Head pleased of Rob a Michael Rob? can’t. Technology I I you have our that precise Goldstein, give more

Rob Goldstein

Michel. it's The thanks, Thanks, interesting an Larry, and question. --

language be that a since a is in focused beginning but Aladdin that can technologies on that of the portfolios management make platform. information people processing and about in few of amazing enabling private asset way what's a whole where trying lives that together terms one And enormous of regard having strategy our in you that need a that of and the XXXX becomes as which aspiration to is, and to be trustworthy to management the data to That even combined to that in not ecosystem that's the be decisions then and system, a just the innovation compile our broad XXXX ecosystem bringing where the this thought with amounts all pillars is industry combined have a not public markets always has platform doing platform within broader call that's that -- the is effectively basic becomes been during across to business to accomplish effectively business does actionable, year earlier to one process have it. and comments that. technology asset mentioned we into concept other Aladdin. we’re that within. building both I of a it it in with you be we've extending We it and we've connects about As world participants. manage, common We're truth we language has with language live in and an ecosystem which and market is portfolio actually Tech been that this this it, Aladdin be happened industry, what with the a And and in important and and used broader my of have language

we artificial say, would to science, data focused BlackRock, new like more advanced information find processing, just techniques, to signals we're data, on particularly how I leverage within do within more how we data. data, lastly, very then alpha use And but also techniques intelligence,

year some In still half AI terms were of some actually within quite of capabilities developed the and market we've achieved capabilities recent we that is through in this scale those a of our lab, the that which fact, old, important interesting a something volatility. is what's

Operator

of Siegenthaler Credit your from line comes the Craig, question line Craig next with Your is Suisse. open.

Craig Siegenthaler

should back opportunity the walk we to advisory about financial us you through potential programs government assigned how of wanted each they've firm? also markets been the come to AUM for fee think I business. and Could to? already then the the And

Larry Fink

Craig. Thanks

Let I'll me question. the part answer to first the up finish maybe and allow Gary

was revenue it's we're related been these we've institutions. oriented platform And number part of we call, strategy working the As their didn't and financial our since assignment on the beginnings built an XXXX. institutions been of when truly now I completed it it. it mandates I first and our but actually of our we’ve mentioned Actually regulatory was firm. that, call for crisis really we really firm that, said hold ESG working took risk and And on on in the call a it then from the advisory time, FMA as over FMA, risk very think where started to is we analytics have successfully with assignments

terms crisis, our world to But XXXX. idea more years clients, I working don't needed crisis the there's truly And because related designing I did in clients during assistance it our times better very to for We and don't in a been with be the in procedures truly built we these something -- few crises during don't is normal that over to we policies. on we these monetary has help of prepared assignments the resiliency. be did going terms discussed, XXXX proud critical firm the it of. haven't that’s it think be the to how during to financial policy, we're it not programs this whether it think build during in this as is becomes like effectuated component in BlackRock. it really So of notable any Then of I'm of much last is assisting

on European different the already of And right New that Bank large Canada York, of a rather been with Federal noted the we dialogues has the Reserve now It now. across Bank won and Commission ESG. governments assignment having with we're

the capturing and component our culture. it to It informational by retain information the our fiduciary us. continue of and very a BlackRock so with -- is. to proud separated, clients strong these this I've are clients all flow And is continue -- confidentiality for very how importantly, helping differentiation. going I'm And this effective all programs us is from the be I differentiated, our will how design of believe division do it's of strong give we opportunities yet resilient been helping segregated, to But

do financial On the respond to aspects, want that Gary, you to please?

Gary Shedlin

Sure, Larry.

morning. Craig, So good

determine of them. following. on the It's they comment relationships As terms Fed policy of come York want be I economy. you Larry our whether it's to with and as on to programs Bank our proud the New very Canada with major said, our advising surprise we're can clients. obviously to the you. to support both information the obviously it'll to up don't individual That a to the on to our think publicly work not offer disclose clients that But I

assignments any our revenue advisory to item standpoint. these a to perspective, line flow a other geography is through income From from pure related statement actually and going revenue

on available, of terms Fed advisory fact of billion some will with In during you release. quarter, to their And available of some be become we the Fed of note assets New note that New is mandate on management will those flows public were linked in the the quarter Page information websites. the regarding AUM York earnings by schedules in flows will and driven York assignment. our our did first advisory X.X on our X All

that'll X.XX points give points on And the investment the on agreement first fee know a management on to specific incremental the the first you the does website. relates billion. an fee -- basis that no billion, $XX CMBS billion $XX it actually of facility next basis itself, and X rate have a schedule revenue $XX As after and

primary by of their facilities, are at relates corporate ultimately have in such two agreements the they the posted the on their not other of on published will time facilities, broadly by the website. that talk each agreements those signed, sheets on it about yet those But the and fed as of And outlines the been and spirit transparency the be the are there credit As term to secondary actual fed. investment market, management fees website.

as In website alleviating on of terms credit their of additional has selected point has also economy commercial other strains a Bank CT of and design by support asset I would FMA would Canada information manager in one -- you that markets. custodian. one just all And purchase again, retained an is as paper say I of well the Bank detail. more their the program advisor for of towards two Canada a relationship Larry as an help flow to been mentioned, the to the

Operator

question comes Bill Bill, next Your your from is with line the Citigroup. open. now Katz line

Bill Katz

maybe of how or I any Thank be may shift lot retail on product if moving of had sort the whether sort it the I’m one in of the a curious, a you sense of getting prism you. allocation And if clients changes wondering side themes your in allocation? contact But institutional was of the could lot the been -- mentioned throughout you sort been of parts. allocation quarter, call asset just you’ve end question of you've of through versus is of quarter, maybe the wondering here, the with contact side? this a answer you're Larry, toward on particularly I'm

Larry Fink

quarter. and conversations the to related to using frontline the because clients the are inching Kapito too to risking. indexed going Rob out our the going And start what in of go back de-risking, this So marketplaces. of had he's of vast very we was Obviously much have about talk our marketplace. end let de-risking from terms start I'm to XXst this. with of me broad the done it been products into that in on But of have And the to February

expressed space. this buy expressed institutional actively the had table. beginning and the to board only X% while our in illiquid by month a are recent group seeing of start in they dips, -- plans off we more and to risks So call we're alternative in the across And of April with taking XX% that on XXX clients risk take that

We having to are longer, -- than ever looking deeper, Clients dialogues continue for broader are looking before. that. actually

sustainability showed as the economies to in despite all today are we clients issues, related COVID-XX. global just interested underpinnings As the of

views. wanted foundation would And de-risking. have say, They so to done I in clients broad their get

of Some had be will them market. the already entered --

are need where a decline reasons need waiting not to de-risking spend it on sell really and and And who expect many governments We we Some of needed the you of going in all the another depends to on energy because were to are some because that. them have who just cash client's prices. be there position. had but clients actually they flow have dip

energy as in an also prices a done driven prices they've other economy. things vast investing were own and has, support economy, oil their environment where that were thing created they’re rising that to prices, energy that's they using stable support their it benefiting now being of and of so, savings have dollars those from my in into there And obviously countries mind that -- their down, drove terms some been

at clients see to We also to continue expect equity look different strategies.

dividend of one fact, us from and bonds bonds great BlackRock's a -- beta. stocks, of with upside U.S. portfolio a heard their opportunities government going and a client of about component of conservative class of to so selling portfolio yielding a up In bought in terms they higher large potential and asset government sold

extreme equities than provide growth So government in foundation from income not of what they that went bonds obviously but could to higher one equities, hyper you bonds. a earn

the So, across board.

Let me have little more a and continue to you Rob color. give texture

Rob Kapito

Yes.

a of of because unique platform. the diversity position the in we're So

billion did So then $X we $X see inflows and they into at did liquid into preferences But evolve. outflows cash. people we as We get into fixed equity was billion active saw We alternatives. billion billion into active where of go? $X And what saw some illiquid and $XX look multi-asset to income. in clients’ and

they and into entered. these they more down by was at wished a that had cash, looked liquidity lot and in it so buildup to institutions, of levels others and at in the moving were a and rates shows they opportunities looked to were realize which of in re-risk chose actually where able interest Certainly some valuation levels amongst clients invest to broken de-risk equities institutional declines, So were lot when retail. and

had calling oriented credit concerned products retail a and expect products represent On this -- use right that about oriented more asset in have the in Larry or way. didn't oriented ESG ESG to this reflected were But better we the about allocation, this models. reallocation concerned or structure one in side, give bit the inflows. which I their represent people and for into our ESG one in was, being the they new credit extraordinary saw go business in thing they And the and which people normal in a flows that were credits portfolio companies that that

in So, that aspects of of allocation. the was one asset this interesting change

Operator

of Your Autonomous next from line comes Davitt question Patrick, the line your Research. with Patrick open. is

Patrick Davitt

even you Fed? finally, of more to that that the the think reaction then bailout A is way the your it lot helped particular shift Do needed fed grade purchasing What And that? or since the and industry hence is of you been do BlackRock have broadly. some more of the for by to ETFs ETFs, in meaningfully non-investment were think ETFs ETF investors quick in a sort it flows of iShares underlying? set growling backstop

Larry Fink

your where know bailout. as to don't framed way I from you object -- the with a I it that coming question. you're

all the supporting of what issues me answer give There insulting. with is using doing after it's -- never But think let I questions governments or I Salim. of the the one the your framing beginning the tools. to There great was on based question, details responded market we're any to is practices. about answer around to

Salim Ramji

terms it's I continued or those those in yield to high are whether as our look, grade high that part recover. ETFs, think have have of markets and of ETFs yield grade And investment those to Yes, recover ETFs, continued markets. flows, investment

investment to including and or and market done that bond as so into yield, And risk ETFs the underlying risk, they've back represent. the high chosen and others at grade bond have into those we come clients accessing

Operator

is line the of Your open. Fannon your Dan next comes with question Jefferies. line from Dan,

Dan Fannon

you as the just to here? think you hoping provide offensive. comments color could I additional from recover we potentially curious staying to things this Obviously, the on and Gary, do about if heard you're as waiting doing could what aware, margin but some of still around what around now was the duration as being backdrop, well market don't

Larry Fink

Gary?

Gary Shedlin

sure, morning. Yes, Good Dan.

quarter. back So just for the margin the looking at

it higher year I as basis due we mentioned, XX was points down primarily a to think from ago G&A.

year-over-year was So of that revenue. we what would increase perspective, for in G&A the about call in significantly non-core an let's $XXX million versus put XX% first. XX% up included That items quarter.

had had think launch bunch costs. of be costs. called We million of legal out value with our, fair we've adjustment but in clear, kind $XX costs business last $XX a importantly, of had FX first just we we had what I and hope fund We related some $XX some of continuity remeasurement, had million quarter million of them, We to the to higher incrementally is contingent we that was associated big reserve. planning. technology certain the

about those for basis margin was impacted XX% due the about to our alone. items that actually quarter increase points and year-over-year non-core that by So of XXX

fees, was lower non-core again and about driven spend. those which T&E was expense professional and items, exclude was and you G&A $XX up about higher by million marketing If that technology X%, our by offset

just to it's think I that some perspective. important So of keep kind in

let's distribution. is base about people and got expense, expense related be in manageable expense our the of significant is, drivers, AUM in kind would I think as we that think following. expense incentive in XX% a fund Obviously, like context our of of our and of base about to fact, XX% call I type direct terms expense variable. of We've the the say, rest compensation. That's comp. year of would it the of it amount

health marketing about environment. T&E operational are I clearly be is our excellence now, the remaining, which is our and Larry our our then I in this G&A, maintain serve really think, expense of we in that of safety think say as half of and probably mean to current there manageable. But the And our to environment. the lower I would best pieces spend, biggest as priority current ensure about mentioned, The employees, right clients both will spend to

at that a repeatedly have will of revenue implications that prudent been in prepared discipline and reevaluating long-term are manage once for expense this five clearly have the we shown better think pretty crisis actually now this expense we I We've And are. strong what entire we the be very to base. weeks. have assessment of we

COVID-XX. think we And not as we're to going year I a slow are or whether it basically will is a and to that the to meantime, act weeks our months too yet quarters. quickly going want think we crisis we resources the of going know to do don't decisively, we're workforce sure be obviously we react But focus thing in to we make last reducing for this committed I to down are hiring. result or

seen continue time in incredibly organically cut normal, things front offense. in and not We've then opportunities think margin. and difficult and to grow have too take think the get able all when who simply we volatile basically to We of important through model firms I ready them. would previous back quickly back time again I to and you've of ascend markets, think it's playing us our seen being advantage they're

part say to details we'll definitely postpone community speed I more a Investor the to and that calls, hosted we and these Day leaders but going regular current through due did maintain shareholders earnings basically virtual monitor. clear. a events, continue this number And to to of plan that of dialog to keep we become to going they year decide up you we're through over might So expanded and watch the are events of with as to business months in as our terms by our investment coming the

Operator

Morgan. final your Ken Ken, is Your from question comes JP line Worthington open. with today

Ken Worthington

the market impose a this market saw markets Or paper huge fund financial prime next rules structure do regulators market support further the money maybe round funds market restrictions If We in of markets? but really structure for the money and cash had possibly just money in T-Bill regulators sell-off, move or kill and market fund in funds, money on off money to this funds? to step funds. need commercial could again market the

Larry Fink

Ken. That's question, a great

Kapito. me Let give Rob to it

Rob Kapito

an that be cash for as identified, prime is So which business from to it's source within for down money an debt of money in and But And you payroll. flow, covers into, this broken companies, and investors important that I borrow cash. it through to sometimes of sometimes can a of going course into raise more And a a market clearly important serve as business. they funds the think them you prime-based. area the is short-term an market a imagine important we're that do really operations treasury-based environment very able

while I So understand what's prime that to think people into the right sold these is obviously rate funds important have changed the floating NAVs, in the and right they're people them. funds

one crisis market in occurred, to from pretty when that able quick of For were due funds we funds would us, keep funds. $XXX crisis, consider to current feel market the were the in really strong is what our business just our into prime keeping liquidity, Xa-X one, good also learning in our We've in our mind, position. I $XXX billion the about raise appropriate liquidities these and represent this very access cash from we risk the funds we're managing our liquidity above early secondary significant to in flows built that and good position but And we have to billion past. liquidity levels prime and

liquidity regulatory So to wanted in excess stay we thresholds month our the well March. of of entire through

making work that to time of lot people work and a think I also into of you don't are the is into sure effort goes go understand also has amount to credit There and these that and our are several in And here. these that funds. and buying competitors step did our of not know have support in I to to product need We support that there the step right funds.

the also papers. on lowering rate, as accept market commercial variable demand collateral, and liquidity paper for has the money announced eligible prices Fed and well notes CDs securities allowing expansions funding to accept facility bank facility high-quality and to commercial as commercial allowing mutual the the as made the So facilities previously municipal paper tax-exempt fund

could. and which funding So funds other bring this look, pressure? think the it source. crisis more But prime I important still Will the it's we knock particular impact first, It funds, would think an regulatory very but issuers for some the I important of still rate also cash be and positions, for the to think maintain with that not comfortable credit for clients get sort only quality. the are

Operator

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

Larry Fink

First for of us for all, continued thank this your BlackRock. you morning and in joining interest

We of Let me governments that responsibility. deep just and the state with have clients, a it BlackRock. sense first, our approach the I'm placed very trust communities by honored for

how do. say, committed We are And can doing being we a fiduciary we are We're We're is a information. we terms of in in a for in our action me executed. fiduciary every fiduciary clients. of making terms to just policy let that everything we're sure

will with foundations making to and believe working fiduciary of a governments. we who is build advice the we We results to testimonial do of are that what our are. many, fiduciary is many And the in to a one as And our committed governments sure presence. I continue

taken organization great just I'm the and and to want to purpose emphasize long-standing guided of more our all come we principles the during where our other communities need. true supporting together also has support by and our clients is ever XX this operate continue to continue always incredibly invest, years each proud the in our What being supporting I than the focus way time years last long-term will come. been has never to term. to a before, has our over more to critical in for BlackRock the innovate investors. here And on to we we long ability our will focus

that's to We ever, stability want in more will where to our that want needs operate we best purpose And safety to our not clients' And hope, and for continue continue leadership we the BlackRock need make more before, our future, and future we children's hope in they their tightly work with is communities, communities our with that to growth, for the their to of services. helping hope contraction. the clients, in We trust of crisis. we ever to work a do will of hope their to than meet so more experiencing to fulfill our of community the to best people hope clients. our than and continuously that, financial sure worldwide try at team that build to the source times financial be in build purpose of and feel and children dearly hold to could well-being, with future community, their employees and for they and safety, children, safe

second Please wonderful everyone, stay the a bye. best safe and Bye, quarter. have can as we quarter in Thank you.

Operator

today’s concludes teleconference. This

may You disconnect. now

BlackRock (BLK) 16 Apr 202020 Q1 Earnings call transcript