- Earnings call transcript Q3 2022

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Operator

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

Third Quarter 2022 Earnings Teleconference.

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

Christopher Meade

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

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

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

I So Gary. it will to over turn with that,

Gary Shedlin

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

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

both earnings will on focusing primarily release our results, financial While results. I discloses and be as-adjusted GAAP our as-adjusted

clients, against As of of a income. comparisons remains reminder, beginning for challenged down currencies, first under liquidity, for XXXX. call to but equity our volatility updated with third are since comprehensive the XX. rates, of debt stakeholders. portfolios. December needs referenced recast markets the major these and market and for BlackRock’s more concerns address of market quarter and total, unique In of significant They to BlackRock products, financials. on of portfolios operating their investment will ending Year-over-year these allows trillion operating as-adjusted to them conditions quarter, our Market net financial results increasingly this resilient styles quarter build to appreciation them return assets help and uncertainty Inflation, margin we X geopolitical with policies, unparalleled customize XXXX, breadth very current targets value management XX% remained dollar value exposures respectively which income, investment relate to in in solutions XX% by of and more global the the $X over turning reduced months and rising the along significant first definitions declines,

in ability scale of evident. during platform is and uncertainty at backdrop of of of net is market months the billion XXXX, X that advantage our and BlackRock generated most it demonstrating times stability platform. Our power challenging Despite strength the market decades, globally becomes this deliver a industry-leading our the the to inflows long-term customization first unique of multi-asset $XXX solutions-oriented integrated most during

as of areas before leading to ever the better culture. This to into to capabilities may as together time purposely can’t BlackRock bring importantly, our years we or objectives, outcomes and ETFs, while have such to fully outsourced and market that connectivity for BlackRock’s model than business And is private been One our solutions for high-growth preferences meet more worked in the the for We firm regardless we important invested differentiated control their these built volatility clients markets, client entire risk franchises collaboration integrate clients shareholders. And specific has help over develop growth deliver platform result, have environment. our tirelessly and near-term and technology. we

$XXX growth of Over platform fee billion BlackRock’s last generated inflows, base X%. organic broad-based has representing the months, approximately total XX positive of net

representing growth. advisory third offset asset from by AUM. annualized quarter long-term tumultuous approximately $XX organic Quarterly inflows were a and During market generated billion, net cash long-term partially net inflows X% net outflows of environment, BlackRock

and fixed in institutional mutual active base equity income organic of annualized funds. X% elevated funds quarterly outflows fee higher from reflected total continued fee impact of decay outflows precision money the and in However, ETFs, market redemptions

average costs significant $X.X and of in also by versus lower of to down and AUM fund reflecting driven non-operating approximately offset performance effective quarter of the tax primarily lower was XX% reflected lower XX% a year $X.X income billion appreciation impact closed-end lower XX% the of on of year-over-year a revenue lower XXXX. Operating ago, impact $X.XX fees. dollar billion was quarter markets Third of million the rate, $XX Earnings third launch partially of year per income by a share compared ago. declined and

of rate benefits. tax was reflecting third tax quarter as-adjusted XX%, Our the discrete for approximately $XX million

a effective to investment legislation. run-rate tax potential We net the million continue for a strategic projected tax but in related the reasonable and XX% non-cash or XXXX, differ discrete is that investment $XXX of reflected $XXX of gain of non-recurring iCapital. items minority because for million or income rate our changes tax Non-operating results included the quarter to in estimate may remainder actual

the and base rate waivers count the base offset by ago. fund approximately securities fee $X.X quarter flat. was trillion lending of the down down months period fee $X.X average year-over-year. lending and X% of positive money second have line versus last and billion support Third equivalent decline revenue foreign fee exchange Sequentially, AUM in fee elimination of revenue lending was On on discretionary we partially negative a was been the on fee in basis, quarter XX% year XX effective of our same The down estimate day approximately constant with a securities X% while an over year-over-year broadly base beta organic market revenue securities growth and yield currency over our revenue basis, fee would AUM. was impact base movements and market

a liquid period single quarter. lower an in ago, third fees annual $XX the estimated than lower decreased performance As and hedge reflecting FX-related revenue year we declines market a of with quarter, including fee a with ends base quarter. our X% the result end entered impact the appreciation, an Performance of bond run-rate equity global measurement the quarter of fees total the million from fund, for base products, approximately of from toward the fourth fees from continued that primarily lower alternative third dollar including

months declined headwinds the demand, increased never Aladdin but sales has for Employee Our XX% revenue our incentive first performance X by and increased also the offset benefit a income year-over-year, Aladdin’s year fees non-dollar lower Total reflecting income reflecting demand G&A and a and compensation we ago, and on market value, Aladdin’s fund XXXX lower compensation ago year basis, of ACV, impact ACV operating year of $XX was in of and reflected associated launch declines solutions reflecting expense from the reporting direct technology costs are technology have stronger. G&A down as-adjusted FX operating Quarterly margin. increased year-over-year. quarter expense closed-end Quarterly expense. significant XX%, on which ago. partially constant with X% business or versus platform excluded currency would a increased contract lower this primarily compensation. from delivered our reflecting On services estimate expense the record to decreased been revenue when Annual due assets. of X% fixed XXXX, in impact higher million a XX% and fee fund base X% third compensation,

was cloud these and Sequentially, up year-over-year G&A investments driven including the XX% XX% including to higher and X%, strategic costs. by expense increased promotional lower index expense Excluding technology, in higher higher primarily expense due was impact average expense T&E down marketing marketing costs, ongoing of reflecting Direct computing and fund G&A expense. promotional expense, AUM.

and ago, of impact people. our quarter XXX we exchange markets was market reflecting the playbook. basis term that the industry on down of environment investments leading strategic technology result year stability purposeful XX% forced from have of Our a But immediate BlackRock’s require pull made direct negative our a the to third we a when The organic and of margin revenue to recognize have is critical cycles. investment movements growth points foreign may been us making ongoing have operating as-adjusted we in this longer investments has pursue back. through others quarterly platform allowed market also different diversification and been consistently and

While conviction have the in certain the of our more and deep aggressively strategy discretionary growth the spend. global manage we begun pace long-term of we markets, to to have capital continue

plans near-term of pursue the our hiring that the remainder We are our continuing are balance to support of but critical growth, hires XXXX. for pausing

in guidance to than In XX% addition, year our now to XXXX XX% increase communicated to expect XX% range that January. we previous XX% lower core be the G&A in we our of full in of

will history, we our will our impact pragmatic steps XXXX materially these going Throughout expenses. our are demonstrated managing and we not us position into persist. they that better results, While have market headwinds should in agile XXXX,

the in continuing As always, efficient current our we possible overall spend will in to remain organic to prudent the way be assess level growth optimizing and of environment. committed in most

year in shares capital in to nearly this our first repurchases. of spending quarter. strategy the in platform stability still demonstrate long-term subject fourth our billion the diversified alignment third conditions, clients. price, consistent to least management remains to year, to $X.X the our dividends – shareholders of capital then return net repurchasing and our inflows of third for cash previous present, guidance. market $XXX share we Our and stock shares consistently million again our anticipate repurchased business months X in We with on the valuation invest will million based worth At relative and including BlackRock’s through plans $XXX quarter of we billion a of combination of the excess once and the including at $XX with of first quarter the strategic

tailored provide them their with partners insights for goals. to whole looking increasingly solutions future are can global We portfolio who and

quarter emerging from precision were and Third ETFs. bond commodities, ETF by inflows partially $XX small-cap sentiment-driven billion our ETFs offset led by markets, exposures outflows for demand of net surging equity broad

iShares our net ETFs Bond to $XX in repeatedly billion in to and generated seen the history. best have second inflows, allocation we of As exposure asset market investors of express precision quarter ETFs volatility, turn risk periods preferences. tactical

$X leading $XX new of growth. new multi-strategy income in assignment. itself. only of of reach strategies, the billion – Demand share, industry the and reflected and business active outsourced will of significant on BlackRock index $X we alternatives trillion partially $X income environment. that including XX% of is Institutional took all offset in for allocation It trillion several fixed the market in industry Institutional inflows current We world raised end income net and outflows and the $XX ETF alternatives in AIG Retail fixed the XXXX. with our outflows to led sought we fixed active inflows bond net the derisk Corebridge significant illiquid to included are the net ETF for trillion. inflows inflows previously during index leading our at and working reflected the years continued, industry of decade, are and $X and approximately income with the multi-asset the of net strength SMAs quarter. funds. And $X closing in net before net net billion stakeholders industry primarily in were CIO pressures industry ongoing believe be billion by $X that not to equity grow AUM mandates, platform but rebalance XX now of $XX billion bond systematic It clients by the funding announced billion of outflows also equity commitments billion as net of of with across and liquid or impact terms

were $XX commitments capital approximately have credit by strategies, representing clients of variety fees. illiquid driven New private and for base committed billion and source significant now We a to of in institutional future a deploy of alternative performance infrastructure.

rate outflows contributed of higher platform environment, institutional to funds primarily corporate capital from in management money by levels, with Our a industry-wide reduction reduced driven ongoing issuance debt billion, net general market redemptions outflows. experienced coupled management as cash in government a U.S. cash and $XX

BlackRock clients. and scale, technology, liquidity breadth, management by positioned our on risk of rates to market leveraging share well As is product stabilize, grow behalf

to history, has BlackRock our This deeper. to listening of the connectivity quarter our successful Throughout assignment linked by billion outflows have clients relationships our with with advisory New remaining Federal in York foundational the assets over the been Bank. with $X our clients. of years were third transition Finally, is managed growth net to connection the Reserve and last last XX primarily been led never

to innovate, always market disruption stronger deliver our to platform. We emerge to to have collaboratively of by the and work full power capitalized on continuing

environment market that, With this no is challenging, over to Larry. While I will turn exception. it

Laurence Fink

they the call. Thank morning joining clients on with in providing throughout how and goals. history, pursue long-term we you, choice their and and for Gary to investment good everyone our have Today our you thank focused

we have platform. last and most industry’s investments integrated years, in the XX comprehensive built technology Over the

to on choice job Our is diverse priorities. solutions them unique to provide more with It deliver clients the address our own financial best preferences. returns their clients’ our based

a and outsourced types of Our looking solutions. around us comprehensive broad-based or you serve platform fully for allows were all index exposure, clients sizes the markets to whether world private

portfolios precise access Others whether sectors, For their in needs. to many or Latin Southeast that’s regions healthcare to may or want or Asia exposures America or certain clients, market-weighted will agriculture. suit

their reflect ever. clients environmental So to their the than of decide transition. investments others in and our values are their BlackRock want more to Because energy choice pursue or this, investment will provides clients how clients BlackRock money. to or opportunities invest they contribute to turning priorities our

broad and portfolio insights have having conversations with resonating than technology time approach our clients Our cannot platform, comprehensive today. whole strongly when more of investment capability, are product our leading more think I are worldwide our are we a with clients. – we global we

markets. in record reached on remain quarter, the XXXX a and impacted have strengthening against following the the At by time, the fiscal a dollar, of the a pound of down is which as they months prioritize economic to disconnect banks portfolios stimulus bringing X the Central brought continued gilt increased First holistic policy. monetary companies complex same creating between continue policy U.S. consumers, should. and high environment, U.S. plunge inflation a government in

rates bond the The speed are central lower in the down raising down injecting the and under market early index with third stimulus extraordinary into which in central XX% jobs uncertainty, and tasked rein harder. an again XX%. months is inflation, volatility the markets increased banks equity alongside liquidity. growth markets is While central economy, economic at in with creating levels bank’s summer for banks the are aggregate equities, X After inflation down even making over bringing of slowing quarter, ending governments are first to rally pressure came

currency focused on we we While not and of to moves, course immune BlackRock impact markets is what remain control. the can of

else other our the $X in We business these $X.X entrusted experienced billion by the the we in where has operate. in net management And billion the including to to historical quarter. conditions, insights inflows. And uniquely awarded has first third not presented quarter, trillion added during by the are is outflows, is much technology because clear, bringing integrated beginning let with opportunities period, of in an can expertise, during and resonate is that be our alone, to us billion of clients growth third something of X $XX positioned the asset $XX Even navigate of this this industry region manager AUM XXXX. BlackRock And also organic help challenges environment. our them in long-term done No we from new integrated over more under advisory environment industry Even months since voice net provide. market the and one when BlackRock’s our investment capabilities clients continues the clients up of trillion us $XXX with accident. in In no management, still this than XXXX, every and U.S. this. alone. in me assets difficult

our and even maybe time For and connect What are we relevant to. clients’ our to one and to in spending management platform, for, our why is industry are to anticipated approach both challenges delivering in was and prepared investment what about we come have preferences. long culture, inorganically organization One is They talking our solutions to asset platform. more our platform That onto onto today, evolving is is and culture just others while we long our commitment that as years, clients our have worldwide. the onto so clients. our technology so, change capabilities one this BlackRock we organically successful and one needs strategically about, anticipation invested That of one integrate made steadfast in

insurance to We their more companies, our industry-leading core operational distribution is portfolio technology Our more expertise especially anticipates for than own outsourced even The meet looking innovate to in as against for to capabilities whole outsourcing investment momentum anticipated. business partners solutions, faster been the look are they mandates. stakeholders. reimagining invested resonating allocations. that ahead translating expertise, these a needs. seeing clients accelerated the outlook movement investment a of is portfolio BlackRock business. are in clients partners better major needs It outsourcing we global rethink their comprehensive with wealth all working towards BlackRock’s on as pension and their them our help from to And growth sizes today. to need objectives them with address growing to of of the to long-standing central we clients their generating align BlackRock and has comprehensive commitment than to forefront, serve help into increasingly these organic and our market backdrop, this we’re focus ever is approach and clients’

last existing capabilities. significant over in years, X are new in Just $XXX to the lead but been new several client that entering has entrusted outsourced BlackRock mandates billion we totaling and relationships honored spanning AUM, also

Third forward. many flows component have, results is of included the of system relationships not Aladdin see we and quarter largest operating strong user We’ve relationships. that power seen that demand a our going our forward. strong and is unites momentum by record of been It going we these momentum outsourced some BlackRock. the see Aladdin innovation the has all provider of new of clients’ key and Driven only that stronger. XXXX in continued mandates model, for never our

one to value multiple half Aladdin resonating offerings We Aladdin offerings year’s about our which across success have to clients Aladdin Cloud. clients and invested portfolios integrated and public leveraging and alongside of clients, The of view, Aladdin grew or Aladdin includes portfolio platform. across manage addressing proposition clients’ of the to expanded using our clients the with whole integrated life Data our Aladdin’s This a eFront, innovation demonstrates classes investment spending are clients’ this seamlessly private Aladdin how on products. includes value our Enterprise Accounting needs capabilities. of our expand own It – Aladdin’s cycle. with acquisition single to mandate out asset

diversity Just leading generated ETFs in rise industry income as platform. in growth months Flows growth as ETF grade XXXX, inflation strong resulted declines asset $XXX ETF bond of Aladdin price transforming fixed unique municipals Bond Treasury AUM were and inflows of a in innovation. system markets. and are is bond at the the across billion first revolutionizing investment also monetary in highlighted X ETFs, U.S. led bonds. BlackRock’s in the net billion policy saw but iShares management investors international BlackRock’s serving in industry, iShares the of XXXX the even millions in $XX of Today, XXX globally. generational investing ETFs, by government sharp tighter in platform with ETFs and industry Flows operating in bond stands

We management bond ETF opening certain the as the that changes such U.S. saw announcement collateral it and ETF to bond announced the adoption accept more also ecosystem, earlier bond of continued year. for capital this ETF giving insurers, from would CME’s treatment

reinforce three options Beyond across particular, inflows The across precision in yield ETS of to rapidly their or our to to by leading and using fixed needs as to turn been and specific Investors to generational will and Aladdin position integrated them either and XX of high handle also third strong categories. across liquidity value choice of and by allow for income with rising or ETFs, the short across In we enables complexity and allocations the particularly and impacted clients offers income to are and XXXX alone, in top-performing high the against reposition iShares enables and updates, we precision credit ETFs or exposures continue ETFs The combined. opportunities. and product BlackRock also core is launches unique BlackRock’s And of with the lending largest nature ETF express allocation our a diversification to BlackRock’s year-to-date. active the model $XXX clients the this in fixed go rates to in year. equity, BlackRock were to third compelling inflation. the for market goals, client for liquidity iShares clients testament a the our ETF breadth iShares next us to unique [indiscernible] and the exposure providers benefits help evolve. fixed ecosystem billion proposition have nimbly investors changes the turning nearly secondary utilization income. to asset yields first are duration, sustainable in of the the platform risk-free of to widest scale. conditions long-term Globally, billion performance in market innovation generated ETF portfolios us ETFs to Across tactical iShares make across clients and in opportunities and asset throughout our new and of help partnering market quarter more saw quarter go to manage vehicle major of clients portfolios and have to own iShares active investors nearly we for in management. is diversified platform number Xx to ETFs, across or our over us tools X,XXX capitalizing to we place BlackRock, demand passes. and ETFs next with double flows player. ETF lock deliver line navigate each generate industry. clients high industry and on And increasingly to are by – institutional capture ETFs $XX largest in positioned and platform, products our launched utilization whether their hedge market as uniquely their it tactical help innovation long-term views. income, long another our growth their investments, for platform.

and momentum as high-performing significant LifePath recalibrate we ETF in build systematic demonstrated platform markets. private strategies. motion believe funds clients with We money addition target In active and outsourcing portfolios from alternative BlackRock’s and active date benefit in funding continued and will alongside to equities relationships, from

performance with XX% XX% some approximately performance and fixed While strong, income market are and equity long-term X-year above in of for the active shorter-term of fundamental our medium peers funds, our impacted remains our period. volatility

in to see private and for especially continue demand alternatives, credit We infrastructure.

seek inflows additional X billion first $X of in importantly, third are returns at market global this from quarter in across the integrated has $XX One more portfolios yield BlackRock we and differentiating high-quality the comprehensive of provide footprint, million or through in platform. as months XXXX. and to our private flow, us part investors and and data benefiting is market access that whole technology. leading of offers alternative distribution a public commitments exposure industry raised analytics network As unique the alpha, amid BlackRock sources asset This clients illiquid uncorrelated and challenging firm’s the alternatives and built understanding clients’ net and a classes tremendous BlackRock relationships, of deal capabilities leverage, our the

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in. BlackRock companies stewardship clients, invest as them they an link the and important investment between other serves For team

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committed defined As we we culture and believe clients. BlackRock differentiating that, of our all, that us, platform to are mindset, up benefit of fiduciary instinct markets open our us differentiating to us. is it has delivering stay the the change Question-and-Answer true and growth with questions. our innovation to And our more benefit benefit power all our our of best most With One enabled our and unified let’s Session as employees; our shareholders. BlackRock for of and and I clients to need clients; relationships our of for ahead to will

Operator

America. take And Instructions] Craig from will [Operator first question with of our we Siegenthaler Bank

Craig Siegenthaler

hope well. you and Hey, the doing good I morning, Larry. team are

Laurence Fink

Hi, Craig.

Craig Siegenthaler

I to the but got us. also Gary, new earnings on wanted And role, with just call you one think you congratulate more

Gary Shedlin

Thanks, forward Look to it. Greg.

Craig Siegenthaler

fixed just breadth platform. also the some of BlackRock question sector is of boomers? higher But baby for the arguably, than demographics, income, just income like the the my eventually for retirement you stabilize. given perspective what into and guys of the this including client rebalancing has your themes rates is of benefits the yields the on topic outlook nobody And given So potential fixed and markets on better as

Laurence Fink

Craig, let turn it Rob. me over to

Robert Kapito

first are duration years, profiles the earn the in impacted. much for portfolio Traditional liquidity The XXXX past. traditional certainly allocations risk. time taking XX-XX allocations without disrupted or balance, at a And the certainly have question. you very and markets in from actually can thank investors attractive have now also yields Craig, been for portfolio their credit

and Just a is are U.S. year And they X%, are Treasury X%. yielding XX above basis X-year points. yield corporate over earning today, high the ago, X% bonds were Notes

in you we let X.X% to in were a for, go me back be If XXXX, many context. a institutions bonds. a portfolio could give get little looking helpful So, yield, what XXX% which is

markets. forward bonds, XX XX% be the years. and another If you in equities only and years, bonds, equities it alternatives. several move XX% XXXX, alternatives. needed This to XX XX% describes XX% XXXX, And in Then had XX% fast you growth XX% of

and Now to clients, equities last several be years, of portfolio in and get add and over both fixed XX% opportunities a then X.X% for alternatives. to portfolios. is to and U.S. long-term could our in create that And returns today, significant been sustainability yield, infrastructure retail, institutional underweighted XX% same bonds income. as know, the going have and infrastructure stimulus Today, the most you to investors in

great have our So, income bonds great and fixed BlackRock the has combination areas. over several years, present last of outcomes that performance particular infrastructure going some in these the investors. some for And to teams is great built

clients to clients fixed call in So, long-term. active second good ETFs, market, billion into of have individual. where And into of generational best the inflows a help what of opportunities the have of to in And then helping from $X.X bond those income quarter $XX and additional billion both fixed Larry. inflows coming and history, pursue which net for are income we is recalibrations couple we performance navigate reiterate I credit we private significant to the are would saw BlackRock had bond We an to them institutional just portfolios. their comments and

yields, protection to credit to and or look those target in to infrastructure inflation interest fixed opportunities time total as alternative next diversification on back So, positions private I yield BlackRock’s duration, rise. and year and flows large unconstrained, and certainly yield, of they us are return, you. allocations capabilities fixed rates income fixed going client over think and capture Back additional income high over to across we execute the lock into inflows in rebalance to The performance as income breadth, see for dramatic infrastructure.

Operator

Our next with from Goldman question will Blostein Alex come Sachs.

Laurence Fink

Alex. morning Good

Alex Blostein

Larry. Good morning Thanks Martin to the for question everybody congrats well. and taking and Gary Yes. both as

fee just income space clearly, to the organic build But challenges see around a thinking on macro about do help of firm but this you that fee have you the immune Craig’s maybe digit of of other to attractiveness initiatives bit to comments So, today. the mid-single given building BlackRock to in the little that base sort blocks at firm, and we out fixed BlackRock’s question, is you holistically, the not base the near and what medium-term? that back get zooming Rob’s And expect into there? will other over the some are organic markets of sort growth get growth

Laurence Fink

Gary?

Gary Shedlin

the for question. Alex thanks So,

our And our what XX – can growth build Obviously, growth. reflection conditions. and to looking from fee And across organic importantly, of cycles paradigm. we intended set back, our really when just platform see fee it do proven X% relevance have that its frankly coming a and But and clients sustainability in is our new a a places coming of is target, success, or base to variety be like growth quarter-to-quarter you things. franchises, parts to I of that. broad-based where about but we think growth think I really last our One base growth organic we to differentiate was long-term. newer today, are measure it’s really invested if from be we months, to two think market I X% never market we we have in that’s more over the where more of particular, have alternatives think areas delivered consistent the our

of where If years. strategies have we do index, to generate I maintain positive base management, last because look today think to perspective strong over organic did some to about terms things: confident years to the a one, we full talked we about that the model Obviously, our have us. But a absolutely range in But But the different we bring all we an a growth that, We so in in problems X% feel together number little unique difference these risk reach it the performance, time, shown on very think, integrated long-term whole active bring of which a why is by cyclicality still it’s you able organic ‘XX. longer solutions, their over is a X ‘XX. growth marked believe objectives for to global of table bit ability the obviously, pro integrated across is alternatives client period time, business of through that, be a, really cash, very, this fee and of of of obviously, for of is years I to and think that there in And stronger volatility. markets. to will we continue And environment. think This ability address in which a I investment to did and long-term we us. things goals I growth. market in strong over X portfolio

income all leading some whether Rob mean number to But to mentioned technology markets, increased be institutional ETFs, really, it’s private to a using it comfortable I in whether generate revenue and But or items. really whether or world, there to whether I whether obviously, stable generate together, that. position fixed able room to using it’s grow. we or markets feel Kapito broadly, do wealth to an it’s still need of itself to bring ability cash So, in think is flows, that we technology sustainability, technology

over like and cautioned in average was stabilize, these very, very saw comfortable and to we long-term focus a in think help and bit get And basically clients above basically those punching them address solutions, needs are to on XX% markets very ‘XX we looking ‘XX and that probably them their our with going little bold right But basically an I there feel back think think markets right cycles, to rate. X% once everybody I we on I X%. we it’s be with problems. will

Operator

Ken come will Worthington from question next JPMorgan. with Your

Ken Worthington

Hi good morning.

Laurence Fink

Ken. Hi

Ken Worthington

The think are has of much Good who in press middle those and those BlackRock by too caught are little. you doing the ESG that financial the Thanks is you for debate think morning. the reported doing who too question. taking

the ESG, are in and recently forward, have from cost the repositioning costs here better can reputation either on of lost terms or characterize then maximize growing And BlackRock press or you these costs? position the minimize adjusting financial you suggests? message have you about the would on as to how issues? maybe looking that so So, benefits And maybe thinking been more taken the you leadership business ESG the

Robert Kapito

think really $XX again, Ken. question, our United flows are the I Once the around in is quarter, in States year $XXX months. quarter XX happening. that the over you. we providing speak resonating year, billion here for third for and for views, what’s U.S. about Thank last I flows Great billion, any billion the clients, And from importantly, our think $XXX Well, what volumes the flows it’s choice. the

And views product may we foundation a choice So, them been them the believe that I there the circumstance. be, with ideas. views, and providing are one I clients provide believe really who conversation clients have We to choice, BlackRock, and who allow portfolios. has their sustainability. of have And to And product we those do resonating have do of used that’s side help every almost related choice. whatever them design in

access. We and strategy. still investing that views. is invest, right different choice to And there that are is choice may and And the clients believe giving sustainable giving the long-term other that in many are have strategy who clients clients them

so has been choice. message And our about

clients of now client choice a is our whatever no about the about we providing looking to even do have now. And always the forward. world by choice as chosen my investors. ability I in said firm if in that. moving enlarged component we to management are we Our And been and choice, voting remarks, have message have And have the has like to as asset other large said I institutional I of going universe are we vote. prepared to from across provide is to this bring small believe the back going, investors where all expand investors entire hope we that And

very think today. resonates part a we the clients, playing voting are the good announced choice. it’s staying quarter. now needs think dialogue it’s of that in over – of I in year And a this very – of this front a our Actually, flows major because into it I well the designed resonating we It ago. we is and is

we articles, addressing of aware am I So, – that. – and obviously, of pretty the are

We are to story. trying our tell

with and is story Saks, that tell telling are to today choice our here am resonating. our shareholders We I

Operator

from We take which question, Stanley. Morgan Cyprys will now Michael come will with our next

Michael Cyprys

taking Hi. the Good for morning. Thanks question.

Laurence Fink

Mike. Hi

Michael Cyprys

Yes.

spend. I more a know I to was investment that on cycle. your here, tightly G&A have the So, spend. around pacing clearly, elaborate you invest hoping to that you the And of morning your mentioned updated past, guide look the manage you through could the in call, core would bit this you

versus compared Thank to invest think point into So, to XX% I does hoping how talk overall the this G&A all this about pull where what to as on really versus year? could guide at back. slow you cycle XX% about prioritize to you. And core down was the where expense to you this XXXX in you for mean growth where

Laurence Fink

Good you to… Mike. do question, want Gary,

Gary Shedlin

Mike. Thanks Sure.

So, to look, very be trying mindful we on obviously our are margin.

these, optimize and shareholder On because invest competitive others to can’t. know our is markets And hand, driven that invest we much expanded historically, value the one can by organic we clearly that continuing moat we have to growth. in also very we know like

faced result are a And the but little history. We recovery two decision, of best these we have only rate similar discussions Mike, – rates, that post correct again, control – revenue, XX%-plus. are markets similarly top that other longer team while we not of level grow we run solder the solder on. kind XXXX continue in years as of our about our of when down market the On be conundrum. decision a organic thankfully, may driven – made But the of And our had the ultimately overall discretionary And that than organically, to hand, grow by factors a beta. are ago. outside like we we our spend onset it pandemic we and continue down, higher same a is the but in posted that growth time of primarily on is duration. FX as to of to were also year markets early mindful different, was also the We equity management mindful a

capital a manage conviction morning, this going the of number not investments. about in pace on talked of that, we have while of certain we think the it’s only at are will of remainder have as tightened up our questions balance and hiring long-term do strategy, of the aggressively growth that more this those And key discretionary our we so but discretionary And the pause also observations using as to deep G&A. year. do markets, the we really be we the appropriate for that time for I our remarks, in next in And mentioned those the the to discussions and We of the year. as spend begin placeholders spending my of plans our we some plans

I to not that and about discretionary good confident tough to some shareholders. growth making we asked tell going time. benefits – our way And our be focus to and talked have that we that’s together you highest our guys to news And on clients, growth sure our will margins that that private only over number also margin outpace the on to many are and business would way-up, be whether solutions of But about, true margin I about meaningfully is talked supporting you is be of again, but areas times have it this balancing year, hopefully a way-down. very The minimum that are a employees ETFs, business. our markets can operating aggressive individual into spend think both portfolio also accretive I in we am but reallocation the we our to growth in of our that that organic technology the as going whole make revenue terms calls in on how see our expect recover, markets, our at a beta.

Operator

last Jefferies. come Fannon our Dan And from with will question

Laurence Fink

Dan. morning Good

Dan Fannon

headlines Thanks. or market. what’s And on? strategy. Wanted that size and going that you repercussions might you think could clients with either and if there LDI around in even follow-up revenue Good to how on be on AUM regulators given morning. going think And the or what’s about from potential your what please been could you associated

Laurence Fink

market. LDI our transparent. first. strategies. approve a individual were $X.X funds. It estimate proved have who ones in LDI of on Consultants strategies about the behalf is It’s of context market Regulators the been is XX-year the the the with UK has been the start me trillion. LDI Let really

of that, $XXX We XX% billion. have about

happened. create were idea with strategies. So, will let’s the – built describe what to These products that these create

were points. over basis XXX risk fiscal points fell the the corridor points basis worked one years penetrated. corridors XX day. a had to announcement And That Markets for policy of of over government. because XXX XXX many by corridors basis of You UK in

did post it not And what Now in market during steps the their setback. the funds, swaps. and ability in period, total does day. in to many clients clients posted Bank England of and stabilizes rapidly margin that margin for for mean, stabilized The means the margins. needed post the have stabilization And of who to the in comes it. a that to return have have single those created the Many they be

it that Bank have products create we should They And there could corridors, For do done. it, the Governor by of the a much the XXX to many every corridors, intelligence of me in not corridor. these reconstruction the of indicated not points, the basis be other point different of of corridors had of announcement the had firms basis the funds broadening and England to that but been player that is other a of by XXX the this. creator, yesterday, types have

the margin meet as may assets – sell of funds I some not so, calls. some other in did said, to to so they have have the collateral. And And doing pension

market market been clients GILT stable. – Some we was this of restructuring. GILT I morning, were this as since market to actions market have By don’t GILT some the – margin clients have have know call. this and call morning, the But the the needed form to provide easy some of the on –

of that. am so know like has And of to the the What don’t regulators, done we you or separate be whole there part going to as the intelligence be tell pension in a some little to was may of is a the redesigning not and may to solution do major should appears be volatility market. if say that to should be forward the starting be it has this try normalized. is reform, it accounts. work always more going I of believe and to of to a everybody much a want do of volatility be And of think in are just maybe of large, are. this is Monday to But there we here fund it, commingled was to the be specific leader a is to on this a these terms whether it products, will with have continue of we this, – market market. I BlackRock more the I products UK reconstruction in know been But in market part component we I UK done money move whether I pension that event this the

widening time to been that corridors, the as the And the impacted most that all. market. a in am so changing issues deliberate has of moves there in here UK I that cases, GILT market. it’s now, and then importantly over up it at not the suggest necessary were that, not cost had a in margins of severe obviously, very necessary adequate putting But market

Operator

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

Laurence Fink

Thank everyone for us BlackRock. you continued your this do. I in for joining interest and morning

towards will be I in outcomes to quarter. and believe the quarter of they the third to come. choice our our backdrop downturns result providing clients severe believe and to with equities. the And the resonated in results of are ability of choice the we flows, have quarters a provide had, I But the third the serving commitment resonating market our to organic position and in both direct very clients a clients Our our bonds

I ever. about us, excited thank and than position stronger So, I I everybody a quarter. BlackRock’s want been real opportunities the am and that have ahead has of see never opportunities good to

Operator

today’s concludes This teleconference.

You may disconnect. now

BlackRock (BLK) 13 Oct 222022 Q3 Earnings call transcript