BlackRock, Inc. (BLK) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining us today. I'm Caroline Rodda, and I lead Investor Relations at BlackRock. 2023 marks the 10th anniversary of BlackRock's very first Investor Day back in 2013. I know many of you were with us for that very first one. I'm happy we have a much nicer venue. No one was forced to wear tie to get in. In any case, we thank you for your longstanding support. And we know that some of you are newer to us today. We welcome you as well. A few housekeeping items before we get started. WiFi information is on the screens behind me. We've also posted a PDF of presentations on our Investor Relations website. Predicting the future is hard, so we encourage you to take a look at our disclosures. Throughout the event, we may make a number of forward-looking statements. We call your attention to the fact that BlackRock's actual results may differ from these statements. BlackRock has filed reports with the SEC, which lists some of the factors that may cause the results of BlackRock to differ materially from what we say today. BlackRock assumes no duty and does not undertake to update any forward-looking statements. We're scheduled to take 2 15-minute breaks, around 9:25 a.m. and 10:25 a.m. Eastern time, and then we'll host a live Q&A session immediately following the presentations, around 11:15 a.m. [Operator Instructions] Thank you again for joining us today. Now it's my pleasure to introduce Rob Kapito, BlackRock's President and Co-Founder.

Good morning, everyone, and thank you for joining BlackRock's 2023 Investor Day, and thank you for your continued interest and support. I speak for the entire management team that's sitting here today when I say we are very excited to present BlackRock to you again this year. And it makes me very happy that so many of you are joining us again in person, and it's great to see so many familiar faces. So a lot has changed since we started BlackRock 35 years ago, but one fundamental thing has not, and that is everything we do is on behalf of our clients. We listen to them, we learn from them, and we put their needs first. And over the last 3.5 decades, BlackRock has empowered millions of people to make their money work for them. Everything we have accomplished represents our commitment to understanding client needs and the outcomes that they are seeking. And we've built our strategy to address them in the context of market opportunities, all while executing with discipline. Initially, when we began in 1988, we were focused on fixed income. But over time, as our clients' needs changed, we changed. And as a result, we added Aladdin, equities, target date funds, ETFs, advisory and alternatives, and we grew globally in scope and in scale. And importantly, we work tirelessly to fully integrate these capabilities and more into our One BlackRock platform and culture. So today, we are a whole portfolio adviser providing end-to-end technology and investment portfolio servicing. We are a scale enabler that supports the growth and commercial agility of our clients' businesses. Clients are using BlackRock as a platform, a turnkey one-stop solution for their whole investment management and financial technology needs. So here's the headline today. We are building the only platform strategy in the asset management industry, bringing together capabilities from investments to advisory, to technology in a single service model to deliver better outcomes for clients. And the results are clear. Thousands of clients, on behalf of millions of individuals around the globe, entrust us each and every day with $9 trillion of their own money, and we have delivered a 40% total return to our shareholders over the past 5 years. And since our IPO in 1999, we have delivered a 7,500% total return, well in excess of our peers and broader equity markets. In good times and bad, whether adding or reducing risk, clients are consolidating more and more of their portfolios with BlackRock. Since our last Investor Day in 2021, a lot has transpired. War in Europe, historic inflation and interest rate hikes, a polarizing political landscape, record markets, both very positive 1 year and very negative the next. Yet over that same time, in the last 2 years, clients have entrusted BlackRock with $785 million of net new assets, translating into over $1 billion of net new base fees. These results and our success over the last 35 years speak to the way every leader and employee at BlackRock have worked together to put clients first. As you listen to today's presentations, you will gain a deeper understanding of both the opportunities in front of BlackRock and of the people who are leading us forward. We will highlight the power of our integrated platform and how it enables us to deliver better outcomes for our clients, which in turn leads to differentiated growth for our shareholders. When I look ahead at what BlackRock can do, the things we will continue to build, the ideas we haven't even come up with yet, I am confident that the best of BlackRock is still ahead of us. With that, I'm going to happily turn this over to our CFO, Martin Small, to talk more about what we are hearing from clients and how that is informing our strategy and the evolution of our platform. Over to you, Martin. Thank you.

Thanks very much, Rob. Good morning, everyone. Thanks for being here at BlackRock Investor Day. Platform. BlackRock is a scale enablement platform for clients. If you remember one thing about today's Investor Day, I want you to think of BlackRock as a platform, a turnkey bundle of efficient and high-performing products and services for clients. We report financial results through the lenses of clients and products. From 2019 to 2022, clients trusted BlackRock with $1.6 trillion in net new assets, and we delivered 5% organic base fee growth. But we want you to leave here seeing what we see underneath those numbers. It's clients using BlackRock as a platform, combining investment, technology and portfolio servicing capabilities to meet specific business needs. That's what's driving our industry-leading growth. We're doing it globally and across wealth and institutional markets. We believe this platform moat is unique in asset management and that it's getting wider and deeper for BlackRock. So let's talk about the forces fueling our growth and our strategy. We always start with clients. Our strategy is to serve clients with excellence. We manage over $9 trillion and think of each dollar as a unit of trust, a measure of the faith that clients put in our firm. BlackRock serves nearly every corner of institutional and wealth portfolios and does so globally, which you'll hear from Rachel. We lead our industry in delivering accessibility, affordability and innovation. We're trusted to manage the retirement assets of 35 million Americans. Our iShares platform is used by nearly 40 million people. And as markets get more complex, clients need scale enablers like BlackRock's Aladdin platform. Through its dynamic ecosystem of over 130,000 users, Aladdin is a platform in a constant state of innovation and growing value proposition. Clients choose BlackRock for performance, and I mean performance in the broadest sense, world-class investment performance, scale, market access and agility outcomes beyond what clients could achieve of their own accord, and operational and cost efficiency outcomes. BlackRock is a platform for performance. Just a few proof points include durable active investment performance with 165 4- and 5-star funds, helping clients unlock breadth in private markets and risk analytics, measured in thousands of deals and thousands of risk factors and, of course, using our scale to drive cost savings for our clients. Platform. But what do we really mean by platform? The closest parallel to what we're doing is cloud computing. Cloud computing in its simplest form is renting out scale to clients. It's replacing the CapEx of having on-premise servers and optimizing via outsourcing. It's about modularity, customization. It's about improving business agility. It's extending to parts of the market quickly. It's about enjoying positive network effects and gaining improved operational resilience and risk mitigation. Everything I just said about the cloud, you can also say about the way clients are using BlackRock platforms. Clients use Aladdin to consolidate a spaghetti patchwork of legacy technologies, and they gain greater business agility and resilience. Why staff a derivatives operations team to support total return swaps on emerging market stocks? You use iShares ETFs to simplify operations and reduce cost. Instead of devoting scarce resources to market analysis and asset allocation research, clients rent BlackRock scale. They get bundled access to expertise in markets, asset allocation, trading through OCIO, model portfolios and a [indiscernible] customization capabilities. In 2022, the worst route in our industry, clients placed approximately $300 billion of net new assets with BlackRock. We estimate this was more than 1/3 of industry market share. And although BlackRock reports financial results through product flows, what we see are platform use cases. Clients are getting something different from BlackRock than from product providers. It's about how we're bundling products and services geared around client needs. They always address investments. But increasingly, they support their business transformation goals. For example, financial advisers use model portfolios not just for investment IP. They use them to increase adviser productivity and to accelerate the metamorphosis from stock picking to financial planning. Salim Ramji will tell you about how this iShares platform use case benefits clients and grows BlackRock. You'll hear about it from Rich, too. Cloud spend is expected to eclipse traditional IT spend by 2025. Asset managers and asset owners have been running their businesses for 20 years, with markets supported by declining and ultra-low interest rates. That's over. Agility, cost management, operational resilience are must have, and I just don't believe there's going to be any beta subsidies for them. The organic builds for non-hyperscale players are risky, and they're cost prohibitive. Why not go with BlackRock's platform? We believe platform use cases will shine in this new market regime. They'll drive similar changes in spend by asset managers and asset owners around the world. And as Rob Goldstein will tell you next, we're the only asset manager delivering Platform as a Service, and our clients need it now more than ever. So BlackRock's strategy is to be there to serve these clients with excellence, to support their business transformation with a platform that bundles everything you see here on this bull's eye, delivering value for clients through alpha. By alpha, I mean performance, investment performance, operational performance and client service performance, building and growing platform businesses, private markets, Aladdin, ETFs, being the global leader in sustainable investing and wrapping it all for clients by being the leading whole portfolio adviser. Our strategy is working. Since 2019, we've generated more than $400 billion in net new business from a number of whole portfolio mega mandates. You'll hear more from Steven Cohen about outsourcing and from Mark Wiedman about how clients are doing more business with fewer providers. We've raised over $80 billion in private markets. Edwin Conway will take you deeper. Sudhir Nair will tell you that we've achieved a 12% 3-year technology revenue CAGR. Dickon and Jessica will tell you about our $100 billion AUM platform for clients seeking returns by incubating and scaling low-carbon technologies. Transition capital. We logged 8% 3-year average organic asset growth in active strategies, truly differentiated growth relative to the industry's decay. You'll hear more from Rich Kushel and Rick Rieder on how and why. So what's working? It's the platform approach. We bring the BlackRock platform strategy to life by organizing around access, expertise and service. We provide access to clients to the totality of markets via our best-in-class competitively priced investment strategy, access that unlocks new markets such as the circular economy, direct indexing or active ETFs; access to the positive network effects from the community of thousands of investors via Aladdin to millions of investors via iShares; and access to our unique sourcing of differentiated investment opportunities across public and private markets. We deliver industry-best expertise at the intersection of economic policy, markets and advanced portfolio construction, and expertise in business process design to create scale via Aladdin or in wealth management practices via model portfolios and portfolio consulting. We aim for excellence in service, top-notch investment performance across investment strategies and a best-in-class client experience from onboarding forward. Our market-leading organic asset growth is compelling evidence of the strength of our strategy and platform approach. We've met or exceeded our organic revenue growth goals in 7 of the last 10 years. And BlackRock delivered positive organic revenue growth in the most challenging years like 2016, '18 and 2022. We see our 9.1 trillion units of trust as among the best opportunities to grow our existing relationships present chances to unlock value in significant future earnings. There's virtue in our size. It fuels future scale and an ecosystem of positive network effects that create value for clients and shareholders. Asset management is a fragmented industry by assets and revenue share. There's significant opportunity to grow, even beyond our existing relationships. BlackRock has just 3% revenue share, and the top 5 have only 10%. In cloud computing, the top 5 have nearly 75%, so we see ample opportunity to grow in our size and scale being a differentiated competitive advantage. We come to work every day at BlackRock for our clients to deliver them a platform for performance, to enrich them with access, expertise and service. It's the real joy of working at BlackRock that we can do well for our clients, while we do well for our employees and shareholders. We look forward to this work, and I thank you for taking the time to study and understand the forces transforming our clients and how the BlackRock platform is there to meet their needs. I'll turn it over to my partner, Rob Goldstein, to further build on how we are executing our platform strategy.

Great. And thank you, Martin. And it is an absolute dream to be here with you today in this incredible space that we've been able to call home really since the start of the year. I'm Rob Goldstein, BlackRock's Chief Operating Officer. And over the next 15 minutes, I'm going to put more context around Rob's remarks, Martin's remarks by going deeper on a few points. First, I'm going to begin by walking you through what BlackRock looks like today and how all of those teams, many of which you'll be hearing about in more detail from my colleagues, partner together to deliver as one firm, One BlackRock. Second, I'm going to introduce the concept of Platform as a Service and how that takes shape across a number of different dimensions, growing relationships with clients, developing new products and just working more efficiently. And lastly, I'm going to wrap up by discussing why this platform strategy is driving clients to do more with fewer providers and the great opportunity that, that creates for BlackRock. So I am incredibly excited about the Platform as a Service opportunity, the PaaS opportunity. It is what BlackRock has been built for over the past 35 years. It's what clients increasingly require, and it's a new approach to asset management. It's a solutions mindset, a technology mindset. But more and most importantly, an approach that's built through the lens of the client versus the provider. The asset management industry traditionally look at most things through the lens of their products. Our approach is through the lens of the client and recognizing that everything we're doing, everything we're doing is to build a whole portfolio. There are lots of pieces to the puzzle, but the puzzle is the whole portfolio. The client value proposition of staying and expanding within the One BlackRock ecosystem and the network effects that creates, including Aladdin as the language of portfolios, represent the next chapter in the firm and something that we've been deliberately building towards for many, many years. So I thought it would be helpful by starting to paint with a broad brush a picture of what our firm looks like today. BlackRock has been designed with one simple goal, to meet our clients' needs. These needs have always started with investment performance. But over time, they've increasingly also include convenience, value, choice, content, advice and, importantly, operational excellence. We view it simply as our mission to provide unparalleled access, expertise and service. Access, it starts with that whole portfolio mindset and client choice. Building portfolios is hard. We want to make it easy. Investors, asset owners throughout the world have their own opinions on how to build their own unique portfolio. And we want to enable all of them to simply combine our puzzle pieces, our investment products and solutions into strategies that solve unique client problems. A foundation of that is the ability to provide clients with investment strategies that span the global markets, spanning styles from index to alpha-seeking, from fundamental to systematic and across both the public and the private markets and making them accessible for institutional and wealth clients. That is how we deliver choice. Our expertise is built through the close to 20,000 employees that we have in 30-plus countries, in 60-plus offices who speak 100-plus languages. And attracting and retaining the best talent in our industry globally is core to our ability to deliver our Platform as a Service. This enables us to bring global insights and global investment strategies locally and bring local insights and strategies globally. To be German in Germany, Japanese in Japan, Mexican in Mexico, but also to bring opportunities we see in Germany, Japan and Mexico to our global client base. And importantly, you'll see that the largest food group of our employees, our experts, is in data and technology. Asset management is an information processing business, and that continued investment is at the heart of building the BlackRock platform and servicing clients at scale. And from a service perspective, the foundation is One BlackRock. We are not an organization that operates in silos. Our value proposition is the network effect that we create for clients through bringing together the various pieces and developing investment insights to design unique client solutions and to create scale across our platform. We may have many different styles of investing we offer to clients, but we have one culture, one global markets and trading function, one operating platform, one client function and, importantly, one underlying technology platform, Aladdin. We believe this model creates significant scale, and those scale benefits are a core part of the value proposition to our shareholders, our clients and our employees. So let me give you a few examples of what I mean by this. The concept of a Platform as a Service is something that exists in other industries. It's prominent, for instance, in technology. And what a Platform as a Service enables is for clients to stay and expand within the platform. It's better, faster, cheaper through the lens of the client. And hopefully, this example helps bring the concept to life. So this client was a new client in 2017. And like many new clients, they came to BlackRock for its ability to deliver an individual investment strategy, a puzzle piece. In this case, it was infrastructure debt, private credit. Most of their other assets at this time were managed internally, and getting them as a client naturally led to spending more and more time with them. As the client got to know us, the relationship expanded to include more components of the platform. So we actually implemented their entire portfolio on Aladdin Risk. Aladdin started to become that language of their portfolio, and it's a language that we could easily converse with them in. We started working with the client in helping them think through their strategic asset allocation. We enabled them to leverage more and more BlackRock expertise. So if you fast forward to today, we manage $30-plus billion in fixed income and private markets assets. The client is now using Aladdin Enterprise to manage the entire portfolio. And we provide strategic asset allocation advisory to wrap all of these pieces together, including what the client and other asset managers manage to put everything together. So think about this. We provide most of the puzzle pieces, we help define what the puzzle is, and we provide the technology to do it all. I don't know of any other firm that could bring this combination of services together at this scale. And we are seeing more and more both clients and forward opportunities just like this. This integrated platform relationship with firms they view as true partners, beyond purely a traditional asset management agreement, partners across asset management, technology and advisory capabilities, this is our access, expertise and service model in action. And the Platform as a Service model also enables innovation in all sorts of unique and interesting ways through combining capabilities that we have, and I want to share one example that I'm quite excited about, and that is bringing together the capabilities of our private equity partners team and BlackRock systematic investing. So think of it as bringing together a private equity team with among the most technical quantitative data-driven investment teams at BlackRock. And the thesis here is simple. There is more and more private markets data available, use it to quickly screen companies to help manage the funnel. And what we're doing through this strategy is having our systematic investing team quantitatively model the universe of private companies to then provide targeted lists to our private equity partners team of companies that we expect to outperform over time, where are the fish. It's a lot more complicated than my simple explanation, but the key thesis, what to take away, it's about connecting dots, it's about connecting capabilities to innovate, to create alpha. We're bringing together our data, our quantitative capabilities in new ways to the private markets. And from a COO lens, this is my dream. It's alpha-creating, it's tech-enabled, and it generates operating leverage. We've built a fish finder. Therefore, we don't need as many fishermen or women. And from a technology angle, being both a user and provider of Aladdin has always generated a tremendous amount of operating leverage for BlackRock. Within our walls, we often use the term Aladdinizing to describe the goal of bringing all parts of our business, new processes onto the Aladdin platform. And one area that's been a newer addition has been alternatives. Aladdin was initially designed to support investments in the public markets. As BlackRock and the Aladdin community started to extend to the private markets, we noted that the scale vector in operating those businesses is just very different. There is much less data available, much less of a tech mindset and a lot of the operating model, what would be considered best practices, are quite manual. So as you know, in 2019, we acquired eFront, the alts technology platform with the goal of integrating it with Aladdin to solve these private market challenges but, more importantly, to ensure we could solve for that whole portfolio. So the outcome, 40% of new Aladdin clients are leveraging eFront, and it's a true competitive advantage in the investment technology marketplace. We now have a data platform and business that covers 12,000 funds and more than 140,000 underlying assets, which is a significant portion of the private markets funds universe. And BlackRock is one of the largest users of eFront with 1,000-plus users, over 2 million transactions booked, and we have our entire private market steel pipeline running through it. So the ability to invest in scale and operational excellence, in running and operating BlackRock and also leveraging those investments to accelerate technology revenue growth, it's a great case study of the power of Platform as a Service. More and more asset owners are looking to simplify. They're looking to work with fewer providers, and they expect more from them. They expect a leveraged platform type of value proposition. From 2016 to 2022, our industry AUM grew by 44%, from $75 trillion to $108 trillion. Over that same time period, the market share of the top 5 providers, half of which comes from us, grew from 13% to 16%. Clients are doing more with fewer. And importantly, clients are doing even more with us. And we believe this is just getting started. There is a significant amount of growth opportunity. Whether you look at 24% of the top 5 through AUM or 10% of the top 5 through revenue, it seems like the asset management industry is still very early in this journey compared to other industries. Martin mentioned cloud computing, but pick an industry, banks, health care, credit cards. So let me stick with the credit card analogy for a second. If you think about it from the customer perspective, the reason why customers are consolidating is because of buying power. Using one credit card gets you more tangible economic benefits, points and a better overall experience. It's just easier to manage personally with fewer bills, you get upgrades, lounge access, cash back, the list goes on. In our industry, we still believe this is very early days of a long-term shift towards clients consolidating their assets and moving to platforms that provide a leveraged value proposition. Why? It's very simple. It's better, faster and cheaper from the client's perspective. Asset management's roots have been in delivering individual products, niche strategies or services built around the core skill set of the provider. No firm has been able to offer the whole portfolio, the Platform as a Service. It's been too hard to build and too challenging to manage. Our client approach, our fiduciary approach, our technology approach, it's enabled us to do it, and we don't believe the timing could be better. Everyone is focused on expenses, especially asset owners, the clients of asset managers. And as they take a hard look at their expenses, they realize having dozens of distinct relationships with individual asset managers is inefficient, it's very expensive, and it often does not lead to the outcomes they expect. They increasingly see the value in the BlackRock model, a single unified platform design by client -- designed for our clients, unmatched in breadth, powered by Aladdin and built on trust. And I don't think there's a better way of closing out this section than with a few last statistics to take away that really demonstrate our platform goal of making it better, faster and cheaper for the client to stay and expand within the BlackRock ecosystem. So first, in the last 5 years, 68% of our 25 largest clients have increased their share with us. And like the example I gave earlier, most are doing so by extending into different parts of our platform. And second, since 2019, we've won roughly 20 whole portfolio outsourcing mandates of at least $5 billion in AUM. Together, these assignments have contributed more than $400 billion in new assets to the firm. So as we look ahead to the rest of the day, you'll hear more from my colleagues about clients staying and expanding within the ecosystem, the network effect. It manifests across iShares, Aladdin, outsourcing, throughout the whole organization. As our next section is actually on outsourcing, there is no better person to share our strategy than my partner who leads our business in EMEA, where we've seen tremendous demand and traction within OCIO. So Steve Cohen, over to you.

Excellent, and good morning, everyone. So you just heard from Martin about our platform strategy and from Rob about the service and the scale that the BlackRock platform provides. And so I'm now going to talk about outsourcing. It's the outsourcing of investment services to us, combined with greater use of technology that is driving both our growth and that of our clients. As Rob mentioned, asset owners, investment and wealth managers are increasingly looking to focus on core competencies and outsource more of the investment process. And as they do this, they're looking for a partner. They want a partner that can provide seamless, integrated solutions better, faster and more efficiently. And Martin's analogy to the cloud was at in the same way that organizations have transitioned from on-prem data and hardware to cloud providers, many clients are now transitioning from in-house investment and technology models to the BlackRock platform. And over the last 3 years, BlackRock has been entrusted to lead significant outsourcing mandates totaling $400 billion in assets under management, including $200 billion in the last 12 months alone. And so today, BlackRock's outsourcing platform globally manages $719 billion in assets for clients in all segments, wealth managers, pension funds, charities, endowments, family offices and insurance companies. And we'd argue we are one of very few, if not the only manager, with the breadth, excellence, experience, local market connectivity needed to onboard, execute and grow these mandates over time. And for clients looking for an integrated investment and technology solution, Aladdin uniquely differentiates us in the market. So our notable successes across a number of outsourced solutions over the past several years are catalyzing dialogue with more and more clients, and we're very excited for the future. So what is driving this growth? This industry is going through a rapid and multidimensional transformation. All of our clients face significant regulatory change. If you take the wealth market in EMEA, regulations like MiFID II and now Consumer Duty, have put more owners on advisers to provide greater transparency of fees and [indiscernible] in what they recommend. And this raises costs and requires new investment propositions and technologies. The pension space, we're seeing once in a generation pension reforms in Latin America, parts of Europe, such as Netherlands and Spain. And then in Asia, insurers are facing the transition to risk-based capital frameworks. And alongside this regulatory change is the competitive scale, particularly for wealth managers and insurers, which is shifting dramatically. New entrants coming into the markets using new technologies to engage and service end clients. And together, these forces are triggering more consolidation and more M&A. And then there's the investment outlook, the regime shift from a period of steady growth and low inflation to one of heightened macroeconomic volatility. And so for our clients, these trends lead them to ask themselves 3 critical questions. Firstly, in this new macroeconomic environment, how do I adapt my portfolio for the future? The new environment is changing the tools and expertise needed to generate investment returns for beneficiaries and end clients. For example, pension funds are having to consider the right balance of private and public investments and how to manage liquidity, while generating sustainable long-term returns. And they may find that as their schemes evolve, so did the skills and the capabilities needed to manage them in-house. And as a result, many clients are now looking for new ways to manage risk, bridge funding gaps and invest across a broader range of liquid and illiquid assets to meet those long-term liabilities. Secondly, if I'm a wealth manager or a family officer or an insurer, how do I achieve scalable growth? And this is particularly the case in wealth management given the increased competition and regulation that I mentioned earlier on. And one answer to that is more centralization of portfolio construction within OCIO teams and an increased use of models and discretionary portfolio management. So for example, in EMEA, the assets under management in centralized propositions is expected to grow 2/3 by 2026, driving $3 trillion of money in motion. And similarly, we see the rise of model portfolios and platforms led [indiscernible] regaining traction around the world. And then there's digital. Much of the future growth in wealth depends on enabling digital investing, whether you are our new digital broker or an incumbent bank, including the need to customize portfolios at scale. And with the renewed competition from cash, wealth managers need to differentiate those offerings. They need to blend more ETFs, more active funds, and they need to incorporate private markets. And all of this requires a scaled investment and operating platform with up-to-date technology to manage that portfolio risk, meet those regulations and power your advisers. And thirdly, what is my core strength? What is my real value proposition to my clients? And that could be wealth managers doubling down on client acquisition or financial planning. It could be pension schemes and insurers reconsidering the in-house provision of all of those investment services and technology services they need. And in answering those questions, clients of all types are increasingly reevaluating their operations, and they're deciding what to continue to focus on, what they no longer wish to do themselves and ultimately then what do they wish to outsource. And recognizing the value of partnerships to supplement their internal capabilities enables them to reduce that complexity, build, implement and activate those new propositions. And as we said earlier, more and more clients are looking to BlackRock to provide that platform service. And the result of this is that outsourcing is one of the biggest trends we are seeing in asset management at the moment, growing 2x faster than the industry. It is global, and it is impacting every client segment we serve. Insurance outsourcing has grown at 10% per annum since 2016 versus 5% growth in the wider market. In the U.S., 25% of asset owners expect to use some sort of outsourced [indiscernible] in some capacity over the next 2 years, according to a recent survey by Cerulli. The U.K. defined benefit market. OCIO has grown by just over 70%, both in terms of number of schemes and assets under management over the last 5 years and is expected to continue. And then there's the U.S. wealth market, managed account platforms, which combine ETFs, mutual funds, SMAs, individual securities, growing twice as fast as brokerage. And at BlackRock, we are uniquely positioned to win in this space. We bring a scaled global footprint that combines investment management and technology, a true differentiator in this market. The breadth of our investment platform allows us to serve as an extension of our clients' investment offices, supporting their decision-making with our deep bench of investment professionals. Whether it is risk management or helping to drive scale distribution, Aladdin's market-leading position gives clients the confidence to outsource to BlackRock, driving the adoption of Aladdin and Aladdin Wealth as increasingly core components of these new partnerships. Our local presence is key to our success, which Rachel will expand on. Led by our country managers, we operate in offices in over 30 countries and have clients based in over 100. So we can combine that deep local expertise, such as the impact of regulatory performance tests in Australia or the ability to build fund wrappers that can be sold cross-border in LatAm, APAC, Europe, with our global investment capabilities. And ultimately, we know that the decision to outsource is an incredibly significant decision for our clients. Our years of experience allow us to apply lessons learned and best practices from strategic firsts to new opportunities. And for our clients, this trusted execution means that while the decision is big, the process doesn't feel difficult. For BlackRock, it means that we are not starting from scratch in every new mandate, allowing us to bring scale to these customized solutions. We're all immensely proud that clients across the globe have entrusted BlackRock with their portfolios. A U.S. pension plan covering more than 350,000 union workers and retirees. A U.K. insurer looking to enhance their investment management capabilities and strengthen future performance for their beneficiaries. An Australian superannuation fund for whom our in-source BlackRock CRO solution has delivered better returns to their pensioners. And in all these cases and many more, our ability to be a holistic partner, combined with our investment capabilities, our distribution reach, our deep understanding of their business and their growth was central to them choosing to partner with us at BlackRock. Now what does all this mean for BlackRock and our strategy that Martin referred to? It allows us to find new ways to bring them together, asset management and technology, serving as an engine to launch innovative products and services that can be replicated across businesses and across the regions around the world. It creates value for our clients and us together. Whilst every solution is unique to a client's needs, there are commonalities in the building blocks and the whole portfolio approach. Take the client service model we built for an outsourced U.K. pension scheme, which has now been replicated not just for other U.K. pension mandates, but in solutions we're building around the world for wealth managers and insurers. It takes us into new markets. Providing a broad set of investment solutions via our managed accounts platform has allowed us to capture share in the fast-growing offshore Latin American wealth market. In Africa, we're helping build South Africa's first global discretionary fund manager. And most importantly, we grow as our clients grow because outsourcing is the start of long-term enduring relationships. It's not just about existing assets. It's about creating a partnership, a partnership to help them grow their business in which we then benefit from their future asset growth. The U.K. wealth manager whose mandate with us has grown 10 times since signing the original contract in early 2020, we'll take one of our largest Dutch OCIO clients with whom we've partnered for nearly 20 years. So we're at the start, the start of an incredibly exciting long-term trend, one where we will drive investment and technology transformation for our clients and accelerated growth for BlackRock. And now to Sudhir, Global Head of Aladdin to cover technology in more detail.

Thank you, Steve. Good morning, everyone. My name is Sudhir Nair, and I'm the Global Head of Aladdin here at BlackRock. And as you'll hear throughout the day, technology is at the center of everything that we do. From our earliest days, we've had the view that managing client portfolios is all about data. And with the right technology and the right business process, an investment manager can literally transform data into alpha. And that concept, that idea has never been more true than it is today. And BlackRock sits at this intersection of finance and technology. And we've been on a 35-year mission to revolutionize the investment process using Aladdin. Today, Aladdin is interwoven into every aspect of our strategy. It supports our end-to-end investment process, from risk to trading, to operations, to how we engage with our clients. It's our operating system that brings together over 19,000 employees, enables collaboration and allows us to scale in support of trillions of dollars of client assets across active, passive, ETFs, private markets and OCIO. It's also an industry-leading SaaS technology business and one of BlackRock's key growth engines. Last year, the Aladdin business generated $1.4 billion of revenue, with a 12% organic growth rate over the last 3 years. And while there's one version of Aladdin, it's certainly not one size fits all. We take the same capabilities that we use internally here at BlackRock and we make them available to our Aladdin clients in a way that's modular, flexible and individually tailored to meet their needs. Today, our technology is used by over 1,000 organizations across institutional, alternatives, wealth management and asset services. There's nearly 130,000 users located in 70 countries around the world. And every year, we invest in building new features, new capabilities at a level that very few firms can maintain, and this commitment to continually enhancing Aladdin has kept it best-in-class and led to 98% client retention. From a macro perspective, we see a series of tailwinds that will -- in support of Aladdin's continued growth. The investment management industry is going through a period of incredible change, change that begins with the end investor, people like you and me, who are increasingly looking for customized investment portfolios delivered at scale. The portfolio of the future is more holistic. It's more horizontal. It blends fixed income and equity, active and passive, public and private. It's tax efficient and sensitive to the individualized preferences around sustainability. It's customized and personalized. It's one size fits one. Don't get me wrong. This is a great outcome for investors, but it fundamentally breaks much of the technology and data infrastructure that our industry has been built upon. The portfolio of the future needs to be produced and managed at scale using technology. So as a result, every firm is adapting and increasingly looking for partners to help them. Aladdin is bringing this portfolio of the future to life by providing the technology in a digitally enabled and customized way. Wealth managers and distributors need new tools to build portfolios for their clients. Investment managers need to think about the whole portfolio, bringing together those puzzle pieces of different strategies, mandates and asset classes. We've all seen and are aware of what's happened to investment manager margins over the last year. So at the same time, that portfolio complexity is going up, so too is the pressure they're facing to operate more efficiently. And this dynamic is creating an industry-wide sort of scale or die dynamic that's leading to a lot of change. And that's where Aladdin comes in by providing access to business agility, innovation and cost efficiency, allowing asset and wealth managers to focus on their core competencies. So within a highly competitive landscape, we see Aladdin as uniquely positioned to solve for the needs of the industry. In many ways, we've been on a multi-decade journey to prepare for this moment by fostering a culture of innovation backed by a high level of investment in our technology. BlackRock has over 4,500 engineers, financial modelers and data professionals who are constantly updating Aladdin based on the feedback from our users and what we're seeing in the marketplace. And through this robust user provider feedback loop, Aladdin has evolved significantly over the years, unlocking new opportunities and areas of business growth. First, we've expanded the suite of our capabilities, from our roots in risk management to tackling more and more of the end-to-end investment process, including trading, operations and, most recently, official accounting. Why are we building an official accounting capability? Because we see the unique value in bringing together the needs of the CIO and the CFO through one single set of data. We've expanded our asset class coverage starting with fixed income, but moving into multi-asset with equities, currencies and OTC derivatives. And we continue to pioneer new analytics, leading the way in emerging fields such as climate risk. To give you a recent example, with the tragic fires happening in Canada as we speak, Aladdin clients can now use our climate risk models to understand the potential impact on the physical assets within their portfolio as a result of those fires. As we've built out these new capabilities, it has opened and created opportunities in new segments and channels. From U.S. to global, today, over 40% of our revenue comes from outside of the United States, including recent wins in South Africa and Uruguay. From public to private, with our 2019 acquisition of eFront, which has opened up a segment of private markets-focused GPs and asset servicers, allowing us to solve for their whole portfolio. And from institutional to wealth, through our launch of Aladdin Wealth, which today sits on the desktop of 77,000 financial advisers, bringing institutional quality portfolio analysis into the hands of retail and high net worth investors. Throughout this journey, Aladdin too has evolved from a system to a platform, and we've rearchitected significant components of the underlying technology to be more open and interoperable, with a series of deep integrations to a robust network of third-party partners. These partnerships take a variety of different forms. For example, by moving Aladdin to Microsoft Azure, we're unlocking new levels of scale and support around the globe. Our work with asset servicers through Aladdin provider is creating a new operating model between asset managers and their largest partners. You heard Stephen talk about outsourcing and the rise of that. Well, we believe that as firms look to outsource more and more of their operational tasks to custodians and asset servicers, this deep integration that Aladdin provider provides will make it easier for them to do so. And finally, we've made a series of strategic inorganic investments with partners that we believe will complement Aladdin's core offering. And today, I'm pleased to formally announce a new strategic relationship with Avaloq, a leading banking technology provider based in Switzerland. Avaloq's focus on cutting-edge banking solutions make them the ideal partner to integrate with Aladdin Wealth's portfolio management and risk technology. Together, BlackRock and Avaloq will bring to the market a differentiated set of comprehensive integrated solutions for the wealth management industry. Which brings us to today, with Aladdin well positioned to support clients not by replacing their systems, but through tech-enabled business transformation powered by BlackRock's Platform as a Service. You can see from the chart how this continual evolution has fueled years of sustained growth. Aladdin's revenues have grown at a 15% CAGR over the last 5 years. Annual contract value, or ACV, makes up nearly 95% of our total revenue, highlighting the stable recurring nature of our fees. In 2022, despite a challenging market environment, Aladdin had a record net sales year, including 17 new large Aladdin clients signed, each with an annual fee over $1 million. In addition to working with new clients, our existing clients are looking to do more with us as well. In fact, last year in that record year, nearly 40% of our new ACV came from the expansion of existing relationships, indicative of the trust and confidence that our clients place in Aladdin. So as we look ahead, we believe that the demand for tech-enabled transformation will remain high and that Aladdin can continue to grow at low to mid-teen long-term growth rates well into the future. We estimate our addressable market at $12.5 billion, representing with the buy-side spends on technology in support of the investment process. At $1.4 billion, we've captured roughly 11%. So we see a lot of room to grow by winning new clients, broadening this network of partners and expanding Aladdin's capabilities that will expand our TAM into new areas, such as private markets and accounting. And beyond our immediate market, we see even further opportunity. As our ecosystem continues to converge and Aladdin does more, we see ourselves moving into other large adjacent revenue pools, such as data. So I've framed the what. Now let me talk a little bit about the how. Our growth is going to come by continuing to execute on our multiyear strategy. First, by investing in the whole portfolio, enabling this portfolio of the future. This is going to include building out more support for private credit, rolling out our official accounting capabilities and building more tools to manage customized portfolios at scale. Second, by empowering our users through data, making it easier to organize, discover and use. I think a great example of this is the work we're doing in private markets data through eFront. Rob mentioned it, but over the last 4 years, we have built a comprehensive database that today covers 75% of the private market's active universe and is resetting a new standard for transparency in the industry for this asset class. Third, by continuing to open Aladdin, connecting the ecosystem as the platform of choice. In addition to the third-party partners that I spoke about, we're very focused on our citizen developers or users who are engineers who want to build their own tools, create their own solutions by writing code, integrated with and on top of Aladdin. And finally, by supporting our clients with sustainability. You'll hear about this more in a little bit from my colleagues, but we believe that Aladdin's capabilities, including Aladdin Climate, will set a new standard in helping people with the data, analytics and risk models they need to build and prepare portfolios in a transitioning world. These 4 pillars, all of which are made possible by the culture of engineering and innovation. In order to attract the best talent, you need to be working with the latest technologies, which is one of the reasons why we're constantly writing and rewriting Aladdin to take advantage of what's new. Right now, clearly, the world is very focused on AI. But for us, AI is not new. We've been using artificial intelligence, machine learning and large language models for many years, solving real-world problems, today's problems, enhancing our investment process, improving our data and making our operations more efficient. At BlackRock, AI isn't a new fad. It's a great example of how we embrace new technology and how we're constantly evolving Aladdin for the future. So wrapping things up, we are incredibly excited to continue innovating Aladdin and BlackRock. As the industry evolves, we believe that these diversified set of capabilities, these flexible modular ways allow us to meet clients at various stages of their transformation journey. And as we execute on the strategy, over the long term, we see a path for low to mid-teen organic growth rates. Thank you very much. I'll now hand it off to Salim to talk about indexing and ETFs.

Thanks a lot, Sudhir. I'm Salim Ramji, and it's a privilege to be back to represent our ETF and indexing platform. Now you're not going to be surprised to hear that I'm optimistic about our growth prospects, but you might be about some of the reasons why, although the answer is right there in the title. It's all about the platform. And increasingly, that's how we think about ETFs and indexing as something that cuts horizontally across clients and products and investments in the market's ecosystem to provide access, access to an expanding world of investments. Now our platform has evolved over the past few years to meaningfully increase access. Access for tens of millions of new investors but also access to our most sophisticated clients who use our ETF technology to access all kinds of markets more efficiently, more transparently and more conveniently than ever before. And in the process, we're expanding the boundaries of what our platform could do with far greater customization, far more active use cases and far more scale, often blurring the lines between active and index. And in the next 15 minutes, I'm going to provide some context on what makes our -- I'll provide some context about our business performance and what makes us different and how this difference has enabled us to raise more than $1 trillion over the past 5 years and more organic revenues than our next 3 competitors combined. But my optimism is not rooted in what we've done, but where we are going, especially from 3 opportunities in digital wealth, in managed models and in fixed income, each representing another $1 trillion of new client assets. So just first as context, our ETF and indexing platform manages $5.9 trillion on behalf of clients and generates about $6.8 billion in revenues. Half of our clients' assets are in index vehicles outside of ETFs, things like index separate accounts, which range from the most standard market cap indices to highly customized direct indexing. We also run index funds and sub-advised client funds, like some of the ones that Steven mentioned in the outsourcing examples. But today, I wanted to devote most of our time to our $3.1 trillion ETF business which is half of our assets, but over 90% of our organic revenue growth. And over the past 3 years, our ETFs have grown assets by double digits and revenues at high single digits, rates that we expect to continue well into the future. So what makes our platform different and special? It's really 3 things. It's our clients, it's our products and it's our investment engine. First, we serve the largest and most diverse client base in the world. 40 million people around the world use iShares, which is more than double the levels that it was just 5 years ago. Our client base is incredibly diverse. We help first-time investors in Germany access market through digital wealth, U.S. wealth advisers build model portfolios. And some of the world's leading global asset managers, insurers and central banks access the bond market more efficiently. Second, what makes our product line different is that we are relentlessly looking for ways to unbundle sources of market return, wrap them in our transparent and ETF technology and enabling clients to rebundle them in the combinations that they want to build the portfolios that are suited for their needs. At the heart of this is choice, and we offer 1,300 ETF choices, twice our next competitor, everything from core ETF to fixed income, to indices that take active risk like factors and sustainable and transition. And most recently, we've added a couple of dozen alpha-seeking ETFs, including our launch last month of BlackRock Income, which Rick manages and we're all really excited about. We've also been innovating, expanding our product lineup by up to 50% since 2019, enabling clients to access more and more parts of the bond market. We've been disciplined about this innovation, with twice as many of our recently launched products achieving $1 billion in assets as our next competitor, and I'm not even including the 2 launches this week, which were the 2 largest ETF launches in the United States and in Japan around transition that Jessica is going to talk about. But our goal is not just to have the greatest selection, but also the highest quality. And if you think about just one marker, we have twice as many Morningstar 4- and 5-star funds and twice as many gold and silver rated Morningstar ETFs as our next competitor. And finally, central to our differentiation is our investment engine, which delivers customization, performance and scale at levels quite, unlike anything else in the industry. So it's great to feel special, but the reason our differentiation matters to us and to our shareholders is that it generates strong organic revenues over market cycles. iShares has generated over $1 billion of net new base fees over the past 3 years, which, as Martin mentioned, is 8% and in line with our long-term goals. As we discussed at last Investor Day, our ability to grow revenues consistently is driven by our strategic product segments, things like fixed income and factors and sustainable and transition and thematic ETFs. These account for 1/3 of our revenues, but nearly 2/3 of our revenue growth. In our core ETFs, which cater to more price-sensitive buy and hold investors, we deliver them incredible value. Most of our pricing investments have been in the core segments, and they've delivered both asset and revenue growth over time, with our most recent pricing investments paying back at a faster pace, something like 3 or 4 years than prior vintages. And finally, precision is a segment that's unique to iShares, and we offer some of the most liquid ETFs that track slices of the market that serve active managers and tactical asset allocators all over the world. Our growth in precision will vary the most quarter-to-quarter, and it tends to be pro-cyclical over the long term. So another way in which our differentiation matters is relative to client -- relative to competitors. And here, we generated more organic growth than the next 3 ETF competitors active or index, combined. So with that as context about where we've been, let's turn to the future and the reasons behind my optimism. We believe that the ETF industry is going to reach $15 trillion by 2025 and $25 trillion by 2030. The 2025 goal may look aggressive, but we think it's very achievable. In every period of market volatility over the past 15 years, ETFs have gained share. Last year was no different. In the face of declining equity in bond markets, investors deployed $900 million of new money into ETFs, including record inflows into our bond ETFs. And as cash gets reinvested, we are incredibly optimistic that ETFs will be an even more important way to access markets. Our 2030 goal is very achievable as client needs are shifting to ETFs as the vehicle of choice on digital wealth platforms and in model portfolios. And as the bond market modernizes to become more digital, ETFs are playing a central role through access, transparency and liquidity, so much so that we're increasing our target for bond ETFs to be a $6 trillion market by 2030. So what makes the next few years so exciting for us is that we're seizing multiple trillion-dollar growth opportunities. Now I'm not sharing with you my hopes and dreams. These are initiatives that we catalyzed, that we're executing against, that we're making significant progress on, and we're seeing accelerated opportunity ahead. The first is on digital wealth platforms across the world, where we see opportunities to increase investor access and make iShares central to their needs and triple our business to more than $1 trillion. The second is enabling wealth and asset management CIOs to build and customize managed model portfolios with our ETFs. This already accounts for half of our flow in a multitrillion dollar market. We see doubling. And the third is bond ETFs, where we're developing in a different and more exciting way than equities in that they are modernizing access to the bond market itself, and it's a business that we think that we can triple the $2.5 trillion. So let me touch on digital wealth first. It's our fastest-growing channel today, and it has opportunity for us to triple from $350 billion to $1 trillion. Now we're not a direct-to-consumer business, but what that means is that we can grow in partnerships with firms that are and build our brands with our common clients. In Europe, we forge deep partnerships with over a dozen firms in a fragmented market, and we've seen things like ETF savings plans through digital wealth platforms grow from hundreds of thousands just a few years ago to millions today. Digital wealth now generates 1/3 of our European flows. And we expect this to grow as tens of millions of Europeans invest for the first time through ETF savings plans, most of which are iShares ETF savings plans. And in a more concentrated U.S. market, we have a longstanding partnership with Fidelity. And after the expansion of commission-free trading all across the industry, we've seen individual investor flows into iShares grow significantly as well. But there's even more opportunity here to turn more traders into investors and bring an entirely new generation of people into investing for the first time. We're investing in our brand and specifically brand awareness amongst emerging market -- amongst emerging affluent investors. And we already have a strong brand amongst wealth advisers and amongst individual investors who use us, we score incredibly well on trust and loyalty and innovation. We just need more people to get to know who we are. We see opportunity to more than double our client base to 100 million people mostly through the digital wealth channel, and our goal is to have more people using iShares than any other investment product in the world. The second opportunity is around fiduciary wealth and as fiduciary wealth becomes more predominant across the world, managed model portfolios are the main way in which wealth managers are looking to scale their practices and ensure a more consistent investment approach. We also like them because clients tend to hold the assets longer and by and larger size than in individual products. We've also been making investing easier through our technologies like Aladdin Wealth that Sudhir mentioned, but also through our partnership with Envestnet where we've seen our model assets grow 5x in 5 years. BlackRock has the leading models business that Rich will cover, but even more than that, it's a $4.2 trillion marketplace, with multiple wealth management and asset management CIOs growing their models. Our platform is enabling all of these CIOs to build and customize their models with our ETFs. In our last Investor Day, I said our ambition was to grow flows for model portfolios in the U.S. from 1/3 to more than half, a goal that we have now met in the United States, and we expect to meet globally as this trend expands. Even more important is that the proportion of our flows coming from third-party wealth and asset managers is increasing, which speaks to the network effects that our ETFs are having. And we expect that total assets in managed models will more than double in the U.S. as they grow, we believe that ETFs will also grow well beyond the core. To give you just one sense of the opportunity, 6 of our 10 top inflowing U.S. iShares are coming from models year-to-date and all 6 of them are in strategic segments like fixed income and factors. And so finally, on fixed income. First of all, you all know this is a big deal to us because we talked about this opportunity in, I think, each of our last 12 earnings calls. And if you haven't heard enough, we can't let more than a month or 2 go by without publishing a new white paper or viewpoint or data set conveying our enthusiasm about the opportunity and, more importantly, about the modernizing effect that it's having on the bond market itself. I don't want to repeat all of the same themes that you've heard or read from us, but I will dwell on a couple of the platform effects that bonds are having and our bond ETFs are having. These effects, which are bringing greater transparency, liquidity and efficiency to a bond marketplace, which was long known for the opposite, illustrate some of the network effects. Let me just give you a couple of examples. We've more than doubled the choices we offer through our bond ETFs in the past 5 years to 500. This not only provides clients greater access to more parts of the market, it provides greater consistency to our flows. At our first Investor Day, when rates rose significantly, we were an outflow. But last year, when rates rose even more significantly than they had in decades, we were in record inflows, in part because of the much broader selection of choices for clients to deploy their money in fixed income. And the blurring of the lines between active and index is happening fastest in fixed income, and I'm not just talking about Rick's new active ETFs, but about how active managers and insurers use our ETFs, especially our most liquid ETFs, which are predominantly iShares to better access the bond market. Rick and his team pioneered the use of fixed income ETFs many years ago, and the practice has now gone mainstream, with 9 of the 10 largest asset managers using iShares bond ETFs to generate better portfolio outcomes. 6 of the 10 largest U.S. insurers use our fixed income ETFs in their portfolio management process. And now that several of the largest insurance states like New York and most recently, Iowa, have changed their regulatory treatment to levelize the playing field with individual bonds, we see tens of billions of dollars of opportunity. ETFs are catalyzing the bond market to move from analog to digital. We've increased our target for our bond ETFs to more than triple the $2.5 trillion, not just because of the generational opportunity for fixed income, which Rick will discuss, but because ETFs are delivering benefits to clients at an accelerating pace. Now the heart of how we make this all happen is our investment engine, which delivers customization, performance and scale in a unique combination, and it's also critical to our innovation. It's akin to what Martin had talked about before. It is our cloud, and I'll just give you a couple of examples. First, on customization. We manage more than 1,000 different benchmarks, including over $1 trillion in active risk taking benchmarks in areas like factors or transitions or thematics. We've expanded from nearly nothing a few years ago to more than $150 billion in highly customized direct indices, about 2/3 of which is built for European pensions and endowments that are looking to do things like optimize their carbon footprint. And the other 1/3 is with Aperio, which is growing rapidly since -- with their customized tax managed offering for U.S. investors. We do all this with market-leading levels of performance and incredible scale. And just to give you a few examples of things that we've done, we've moved from a single provider servicing model to multiple provider ETF servicers, and we've moved from having just a few index providers to having a dozen, including BlackRock, to increase client choice, increase competition and increase operating leverage for the firm. There's a whole host of innovations that this platform can deliver to us for more and more expansion into active and outcome ETFs, things like buy rights and buffered, more and more custom in direct indexing and tokenization, but it's also enabling us to form deeper trading partnerships and test new ideas, like crowdsourcing bonds into ETFs. And so with that, what I'd just say in conclusion is that we have a differentiated platform, and a differentiated platform enables us to deliver rates of asset and revenue growth for the long term at double digits and high single digits. Second, we are seizing $3 trillion unlocks in digital wealth and model portfolios and in fixed income. And third, our cloud or the secret of our success is really around our investment platform and the innovation that it's enabling us to bring to an expanding world of investments. Now ETFs and indexing are the usual way -- usually the first way, which clients experience BlackRock, but why don't I hand it over to Rachel, who'll talk about how clients experience the broader BlackRock platform in Germany, Japan, Australia and a number of other countries all across the world.

Thank you, Salim. Everyone, thank you for being here. This moves. I'm Rachel Lord. I'm the Chair and Head of our Asia Pacific business, but I'm actually here to talk about our international business overall today. And outside of the U.S., we've actually been growing rapidly over the last 3 years. We manage roughly $3.5 trillion for our clients outside America, and that makes us the largest asset management business internationally. These businesses have delivered around $8.3 billion of revenue in 2022. And over the last 3 years, our average organic asset growth rate is 7%, our average organic base fee growth rate is 6%, and we delivered just above $1 billion in net new base fees in that 3-year period. So where are we in the world? Well, we're kind of everywhere. We have a very deep local presence. The majority of the workforce at BlackRock is actually based outside of the United States, and it roughly splits between around 6,000 people in our global platform centers, or our iHubs, which are based in Europe and India -- excuse me, sorry. I'm recovering from COVID. And we have about 5,000 people in our commercial offices, also all across the regions. The way we manage these countries is in a regional and global matrix, similar to many big financial services firms. And we do that to ensure we can deliver at speed everything that we're talking about here today. And what we're really trying to do is create this network effect that some of my partners have been talking about this morning and leverage our platform. And our interconnectedness means that things we learn in one country can very quickly be assessed for viability and relevance in another country. Internationally, we're growing significantly faster than the industry. So for the 3 years ending in 2022, we grew the business by 6% versus the industry, so 50% high growth rate. And many of the countries we operate in are actually at much earlier stages of professionally managed asset adoption than the United States. So when we talk about fragmentation, and you think about that here in America, actually, outside of America, that fragmentation is far deeper and far greater. The entire industry is less advanced. That is also true of the capital markets in many other countries. They're often less well established as a means of raising equity or borrowing money, and banks are often the primary suppliers of credit in those markets. So as these markets start to internationalize, start to become more like some of the Western markets, some of the things that Salim was talking about, particularly around fixed income, are some of the tailwinds that drive us in fixed income ETFs. And so how do we do this? Well, our strategy is predicated on an ambition that we grow the market wherever we operate. And when we grow the market, we're also looking to take share. We take a blended approach of being deeply local as well as powered by our global platform. We share insights and market knowledge from across the world with our clients, and we operate locally with global best practices. This actually sounds very simple, but we believe our ability to execute this at scale in a disciplined manner in multiple countries differentiates us in our international business. Our relationship managers are all based locally, enabling us to understand in great depth the individual requirements and the changing needs of our clients as their markets evolve. And where locally situating investment teams gives us an edge, we put them on the ground as well. We deploy capital in the public and private markets in every country in which we operate and beyond, and we are obsessive about understanding what drives capital flows, both within and between countries. Our local approach is very successful because of our country managers. They are outstanding leaders who understand their markets and BlackRock's platform inside and out. They and their leadership teams are experts in the client base, the investing landscape and the state of the capital markets in their country. And by investing in such a strong cohort of leaders, we are able to build and deliver the right BlackRock for each of the countries in which we operate. In effect, these leaders customize BlackRock and the BlackRock platform for their market. I've spent 10 years at BlackRock now working across EMEA and APAC, and I've witnessed how the approach that we take to developing our local businesses is unique and is repeatedly successful. Every BlackRock country is a little bit different because every country is a little bit different. Now that was a little abstract, let's talk about some specifics, and I'd like to start in -- with 3 examples of the major countries in which we operate. So we operate in all the major economies in the world, including some of the most developed, and so I've picked out Japan, Germany and Australia. And in these 3, we have actually well-established local asset management industries, and we have formidable domestic and global competitors, all operating at scale in these markets. But over the last 3 years, we've managed to grow these by between 10% and 15% annually, or between 2 and 4x the market. And so our approach of how we deliver this global platform into a local market by listening to our clients, being understanding their local needs, understanding regulation, this is how we're growing exponentially greater than the market. If I take them in turn, Germany managed by Dirk Schmitz, we have a very strong retail mutual fund and ETF business, plus a fast-growing institutional business. I'd pick out to highlight our rapid growth in ETFs, as Salim has referred to, which is a function really of the self-directed investor market that we talked about earlier. And one of the key ingredients here has been our domestic ETF platform. So we actually have a German ETF platform. It's unique, which came to us as part of the BGI transaction all those years ago. And we leverage that unique platform in Germany to create some of the very earliest ETF savings plans in Europe, working with retail banks and some of the digital disruptors in the country. And our experience in doing that in Germany was something we then took and we took across Europe, and so we could deliver this in other markets. It's a powerful factor in our ability to grow that retail market for ETFs across EMEA. If I turn to Japan, which is managed by our 2 Hiros, Hiro Arita and Hiro Shimizu, you couldn't make that up, it's actually pretty cool, we have a robust institutional business serving Japanese pension schemes, banks and insurance companies primarily for their global investment needs. Our Aladdin business is particularly strong in Japan. It's a very important part of our proposition there, and Tokyo actually serves as our base for Aladdin overall in the region, in the APAC region. If I think about future growth, I would like to highlight the wealth market, where we see a rapid transformation just beginning. And with regulatory incentives and also the return of inflation for the first time in Japan for almost as long as I've been working, this is leading to a shift from savers, who've traditionally individuals have been investing in deposits and not in the markets, not in investment assets. The asset management industry for wealth is very, very small at the moment in Japan relative to the size of the economy. We're also seeing the beginnings of digital distribution models there. And so what we're doing in Japan is we're taking all of our learnings from across the globe, from here in America, from Germany, from Europe, everywhere else, and we're figuring out how we deliver that in a way that is Japanese, to what is going to become a very important growth market for us. And finally, in the big markets, I wanted to talk about Australia, which is managed by Andrew Landman, who's been at the firm for many years. We have a full-service business here with everything that you've heard about today and that you will hear about today, contributing to our market-leading position. I'd spotlight here, our climate infrastructure investing is something we're incredibly proud of. The investments that we are making locally in climate infrastructure, such as Akaysha Energy, which is building the largest battery in the global South or solarZero in New Zealand. These are strategically important in both countries' search for energy resilience, and they're great investments for our clients. Away from developed markets, we're also building in what are very fast-growing local markets, and I picked out 4 to talk about. So in Mexico, which is managed by Sergio Mendez, we acquired Citibanamex Asset Management in 2018, and this has given us an incredible local platform and has allowed us to really tap into the fast-growing retail investment market. We now have over 500 local international ETFs and mutual funds available for sale in Mexico and a full coverage of banks and other distributors in the country. So we're really growing our retail presence there. Saudi Arabia is a fascinating country. We've been serving Saudi Arabian institutional clients for decades, but we only opened an office in 2019 in the Kingdom, and we built out a local team led by Yazeed Almubarak. And in addition to serving those existing clients for their international asset management needs, we've also focused on setting up a local infrastructure platform. And to date, we've deployed north of $15 billion into natural gas pipelines. We have a strong set of investment opportunities to come, and we see a lot of demand from our global clients for infrastructure investments in the Kingdom of Saudi Arabia. In India, we actually divested. We had a local asset management partnership business there, a joint venture, which we divested from a few years ago. And since then, we've been focused in that country on investing [indiscernible] in private markets. It's actually an incredibly exciting country. I spent a lot of time there earlier this year. It's made great strides in recent years to create a digital infrastructure that leads the world. The UPI system, plus the ubiquity of smartphones and phenomenally low data costs, are actually transforming its economy, and that's creating a great opportunity for investments in private markets because new businesses are evolving very rapidly there. Equally, its commitment to delivering renewable power and associated infrastructure at massive scale are offering investment opportunities for our infrastructure teams, for example, in the renewable power space. And finally, in China, led by Susan Chan, we have 2 start-ups, and we're primarily focused on the retirement market. We do this either through participating in retail pension savings pilots in our joint venture or investing domestic institutional pension assets into the global markets. So we're taking money from Chinese pensions and putting them to work globally. The retirement market is at a very early stage of development. But with all of the demographic challenges faced by the country, this is going to grow over the next decade. Let me close with some industry trends, and some of this is really what you've heard earlier, but it's playing out very rapidly in these -- in our 2 biggest regions of Asia and EMEA. So we see a huge demand in EMEA and APAC really from clients, from governments, from societies in general for more sustainable investments and, in particular, what that means is from the perspective of climate and energy resiliency and security. Corporates in all sectors of industry are retooling their businesses to respond to this need and this desire from their end clients, and that creates interesting investment opportunities. Transition investing in critical infrastructure and emerging decarbonization technologies is a powerful tailwind for asset management around the world. You're going to hear more on this from Jessica and Dickon shortly. We've talked a lot about outsourcing and customization, but this is a very big trend in EMEA and APAC, and it really is only just getting started. Stephen ran you through this earlier, we see upside in all client segments and in all countries across the world. Whether it's driven by the need for better technology, whether it's driven by cost pressures, regulatory changes, many of our clients are now consolidating their businesses with managers, who can provide the greatest breadth of capabilities and service. So again, this platform approach we're talking about, this is something that really helps us lean into this trend all around the world. And then finally, on wealth, the digital revolution that Salim talked about, we're seeing that very well advanced here in the U.S. We're seeing it really taking off in Europe, where there is a generational shift of individuals looking for easy and transparent access to investing products across active, index and the whole portfolio. It's not just an ETF game. It's how do you deliver everything to clients digitally, and that's a huge growth area. In EMEA, this is absolutely the fastest-growing distribution channel in the region. In APAC, where I live at the moment, we're seeing the growth of wealth management generally. It's much further behind EMEA and much further behind the U.S. And so really there, the story is about clients moving from savings or deposits into investments. And as local wealth managers continue to professionalize and modernize what they do and internationalize their standards, their need for best-in-class asset management services and capabilities continues to rise. So in summary, our disciplined and structured approach to each of the countries in which we operate and our ability to tap into all of the major trends, driving asset management across the world, enables us to both grow the market in each of these countries and then to take share. And I'm happy to tell you we're now able to go to a 15-minute break, or a 10-minute break. I'm not quite sure what it is. But thank you for listening, everyone, and enjoy the coffee. [Break]

Great. Thank you, everyone. We're going to get started again. We'll have another 15-minute break around 10:30. With that, I'm going to turn it over to Rich Kushel, Head of our Portfolio Management Group. Thank you.

Good morning. Today, I'll be speaking about our active platform and how BlackRock is positioned to win by meeting changing client needs through asset allocation and portfolio construction. You'll also hear how we're delivering active management in innovative ways, such as through custom model portfolios to generate better outcomes for our clients. Now since our inception, BlackRock has always been an active solutions provider for our clients. And in our last Investor Day in 2021, I spoke about how investors are turning to active strategies because of lower returns to beta, elevated volatility and the increasing importance of bespoke investment opportunities. Now the new market regime that we're in has served to further amplify all those factors, increasing both the need and the demand for active management. And over the past several years, we've seen our clients' needs evolve and have positioned our active platform to deliver alpha for them in innovative ways. This ability to unlock new markets ensures that our active franchise remains a growth engine for the firm. And if you look, active net new business over the past 3 years was $570 billion, representing 8% average organic asset growth. And active net new base fees were $1.1 billion over the same period, representing 7% average organic base fee growth. Today, our active platform makes up about 27% of the firm's AUM but nearly half of the firm's based fees. Now our growth in active over the last several years is particularly true relative to the industry with an average 6% organic asset growth premium over the past 4 years. And while our active market share has increased each year since 2019, our market share remains low at 3.2%, and we have significant runway for growth in what remains a highly fragmented industry. Now traditional active strategies have been and will remain a significant part of our platform. Investors continue to utilize them for diversification, to capitalize on dispersion and to generate returns by investing throughout the corporate life cycle, harnessing the alpha generated to achieve their investment objectives in a low-return environment. And our clients continue to trust us to manage their active portfolios because we've delivered strong long-term performance. Across our fundamental equity, systematic equity and taxable fixed income franchises, a large majority of our assets have consistently been above benchmark or peer medians for the last 5 years. And our durable long-term performance has led to a strong lineup of Morningstar 4- and 5-star rated funds and observed preference and destination for flows in key markets such as U.S. retail. At the end of the first quarter, 68% of BlackRock's U.S. active mutual fund AUM are in 4- and 5-star rated funds outpacing the industry average of 58%. And as you know, asset gathering is increasingly weighted to these top-rated funds and since 2019, 4- and 5-star rated U.S. mutual funds gained over $500 billion of net inflows, notwithstanding the industry outflows in 2022. This performance is a necessary foundation for us to be able to deliver our clients the investment outcomes they need to achieve their goals. Strong performance is one reason we've been able to consistently outpace the industry, but our whole portfolio approach has really been a game changer in how we deliver our active strategies to our clients. By leveraging our breadth and reach to solve our clients' problems across their entire portfolio, we've unlocked new channels to deliver holistic active solutions. Our assets under management have grown meaningfully with compound annual growth rates from 2018 to present of 22% for our outsourced CIO business and 33% for our model portfolio business. And this growth is against the backdrop of surging demand for whole portfolio of solutions across both institutional and wealth markets, with the industry growing at a 13% compound annual growth rate from 2017 to 2022. And so earlier, you heard Stephen speak about BlackRock's success in executing on significant outsourcing mandates and from Salim on the increasing adoption of model portfolios. Model adoption, in particular, is accelerating, reaching over $4 trillion in assets with a potential addressable market of over $9 trillion. Now growth in our own models franchise outpaced the industry by a factor of 4 between 2019 and 2021. But to continue to drive growth, we know that we need to deliver more customization for our clients, and we're positioning our platform to deliver that at scale. In the U.S., traditional model buyer segments like broker dealers and home offices are becoming increasingly saturated, but RIAs are just starting to embrace model portfolios. And they're the segment with the fastest industry AUM growth, and we expect them to turn to model portfolios to continue to scale their practices. Now the way that we best deliver this to this growing segment of the market is through our custom model solutions business or what we call CMS. The majority of our CMS clients are the largest and fastest-growing RIAs across the country who've already achieved real success with their own in-house investment platform. but they realized that the strategy that got them their first $500 million won't be the same strategy to get them to $5 billion, and that's where we come in. We provide operational scale and time saved to the RIA Chief Executive, so that they can focus on their clients while partnering closely with the Chief Investment Officer, to develop investment solutions that pair with their existing books. And clients work with us because we bring them a defined and robust investment process that they can put their own fingerprint on complete with marketing resources and adviser tech. And CMS itself currently is $23 billion in AUM and has gathered nearly $8 billion in flows over the past 5 quarters, representing $15 million in base fee growth. Our current CMS capabilities allow us to reach about 1/3 of the typical RIAs firm's assets. But when we add our expertise across the whole portfolio, such as through our active municipal bond capabilities [indiscernible] tax-optimized equity SMAs and our offerings and alternative investments, we can more than double our reach with our RIA clients, accessing more than 3/4 of their book of business. The strength of the BlackRock investment technology platform underpins our ability to deliver durable alpha for our clients at scale. Our integrated Aladdin platform provides flexible investment technology that extends from manager research to portfolio construction tools. In our models business, it helps us scale custom model delivery, rebalancing and client reporting for thousands of customized models. And we underwrite and manage complexity on behalf of our clients, allowing them to focus on building their business. Over the last several years, we've put a significant investment into our tech platform and operational infrastructure, providing us with what is truly a sustainable competitive moat in this space. And in addition to our technology, we pair active and index building blocks with our asset allocation expertise to provide a truly differentiated offering. We bring leading global active strategies across asset classes and styles of investing, which have a proven track record of delivering alpha for our clients over the long term be on the value add from our asset allocation and by leveraging the full capabilities of the investment platform to drive consistent and strong performance, construct better portfolios and relentlessly manage risk, we can help our clients attain the investment outcomes that they're seeking. Our clients continue to turn to us as their investment partner of choice because we deliver fee efficient asset allocation with strong performance results, leveraging BlackRock's investment IP and the breadth of our active solutions across our clients' whole portfolio. We're positioned to win because of our track record of active performance and our ability to deliver traditional active strategies in new and innovative ways. And we combine that with our expertise in portfolio construction and asset allocation and our ability to utilize technology to manage complexity and implement these solutions at scale. Our differentiated offering for active and whole portfolio solutions as well as base fee growth for our shareholders. Now as most of you know, BlackRock got to start as an active fixed income shop. And I know that many of our clients and shareholders are interested in the opportunities in bonds in today's rate environment. And for that, there's no one better than Rick Rieder. Over to you.

I want to call it, Bob. So I've learned that markets like media likes one syllable answers to things. So like today, we're going to hear from the FOMC, where they're going to skip, pause, hike. So I don't want to talk about Bob. So the -- so the other thing I want to talk about fixed income, which I'm going to conclude with. First thing I'll go to is -- I hit this first, the -- let's talk a little bit about the nature of the platform. And I'm going to talk about scale. So BlackRock Fixed Income is $2.7 trillion in fixed income as Salim was talking about, $1.6 trillion in ETF and non-ETF index fixed income, the faster growth in fixed income is obviously come through that side of the platform, $1.1 trillion in active getting it at $2.7 trillion in total, $682 billion in cash management, $29 billion in private credit, $3.4 trillion in total active fixed income and I'll talk about scale in a second and particularly for the bond market. I actually think scale is a critical dynamic. We'll talk about that. You see the numbers in terms of growth of new business, of new base fees, active performance fees. And one thing I want to say, as you talk about these numbers and you talk about the growth, there was also during the period where the Fed was raising interest rates 500 basis points, and other central banks were tracking interest rates, significant hundreds of basis points. So pretty significant growth. And I talk about the excitement that I have if we're getting which I think we are getting to the other side of the coin in terms of where the central banks are, not that they're going to ease tomorrow, but I do think we're getting to the end of the hiking cycles. So let's talk a little bit about how do we differentiate ourselves? What are our competitive advantages? I'd say there are 4 big component parts. First is insight. Big part of how we market our business, value add, preferred provider, research, data, analytics, technology. Insight's a big part of being a trusted partner with clients. Technology risk management. You heard from Sudhir, you heard from Rich, Aladdin is the core of what we do here. Aladdin in terms of our largest calling card, allows us to promote the idea that I think, hopefully, we've succeeded at in terms of consistent portfolio management that's predictable over time. Market access, breadth and diversity of the platform, and I'll talk about this on the next slide in terms of scale. And then liquidity, core allocations, return and income, a big part of how we market our franchise. Okay, let's talk about scale. And why is scale so critical in fixed income? First one is proprietary deal sourcing. This is deal sourcing for unique bespoke investment opportunities. By the way, I think this has become the critical dynamic today. You think about how the banking industry in the 1980s was 18,000 banks. It's now 4,200 banks. Fed keeps hiking it's going to go to 6, let's assume that's not going to be the case. But the way that things like credit, real estate, structured product is going to make its way into the capital markets over the next few years is profound. So this 25% savings in execution, et cetera. Scale is a big deal in the bond market, and it's becoming increasingly so. Let's talk about performance. So this is one thing that I'm -- this page, I am super proud of in a couple of different regards. One is the thing that clients are looking for is can I count on consistent performance because I'm taking risk in other areas. I'm taking beta risk, equity risk, venture risk. Can I count on consistent performance? 90% of our funds have been above benchmark over the 3- and 5-year period, 77% over what has been a difficult -- certainly difficult 1-year period. The other things that I'm really proud of, and I just highlight about 30% of the universe to have all of our funds to be at 59% is really good. The one I also wanted to highlight is gold metals. So Morningstar [ doesn't ] handout gold metals like candy bars, it's 3.7% of the funds get gold metals, and they rate each fund independently -- gold metals. So SIO total return, our global allocation funds, a bunch of our European bond funds, sustainable Eurobond fund, anyway, this is something really new for us. By the way, they're not lifetime achievement awards, meaning you got to come in and work every day and you got to keep the performance up or you lose it and they're pretty aggressive about making sure your performance and your process and your people are consistent to keep those gold metals. Let's talk a little bit about market share. This is something really cool, and I know Martin has talked about it. So market share, in a world and I'll talk about fixed income in the last couple of years when the Fed hikes rates, people sit on their hands. With the ECB hikes rates, people sit on their hands, can you garner share in an environment where it's just hard to get AUM in an industry that's not growing much. You look at in fixed income. You look at 2019, '20, '21 and then '22 obviously, no organic industry growth, but our growth was significant capturing greater than 100% a share. Key is can in an industry that I'm going to talk about in a second that I actually think is going to grow. I actually like fixed income, I'll talk about this in a second. Can you keep garnering market share while the pie grows? Let's talk about the pie. So let's talk about [ peers ] in my Egypt slide, I'm going to talk about pyramids. The -- if you look at the upper left, this is the size of the capital markets. Deposits and money market funds $22 trillion, treasuries, $18 trillion. And then you go down -- by the way, it's just 1- or 3-year treasuries. Then you go down [ muni ] market, mortgages, and then the market gets pretty small as you get into commercial mortgages, and they get to a big jump in terms of the equity market, okay, hold that. And now look at the top, deposits have no volatility. This year, they did. But the volatility of deposits is pretty low. And then you go down the cap stack. Not surprisingly, vol grows as you go down the cap stack. You get to the bottom of the stack, the equity market has greater dispersion, you get higher vol down the stack. Then you go to the top right and say, okay, for that vol, what are you getting return-wise? Not surprisingly, the return over a 20-year period. I say you can't have a down market in stocks, but returns are akin to what happens to vol, not shocking. Then you look at -- so this is 10 years ago, the bottom left. And this is the dynamic around where yields were 10 years ago. Not surprisingly, and yields for the equity market take PE and flip it. And say, okay, what's the yield of the equity market? That's what the pyramid should look like. It should be parallel to what is on the upper right. Return vol or the top middle, this is what it looks like on the bottom right now. That's not a pyramid, meaning, you can get a ton of income without vol. Meaning, when the Fed stops budgeting the system, there is a ton of money coming in because a yield you can capture at lower vol is extraordinary. But now there's almost [indiscernible] words out, a really long time. And the -- I've never seen anything like that in terms of the cap stack today and where we are. Okay, let's build on this a bit. Okay, go to that, if you look at the top left, this is fixed income yields today, at the end of May, and this is what they were December '21, coming in the beginning of last year. Not surprisingly, if you're in both investment-grade credit, if you're in mortgages, you're in high yield, the yields are much higher. Look at the bottom left, and this is what I talk about the opportunity in active management, the ability to have scale or to utilize scale, the high-yield market, people say, should I buy a high yield, not buy high yield. Here's what high yield is. You take that chart on the bottom, half the high-yield market trades at tighter than 300 spread and then a big chunk of the index trades at wider than 460. You've got a Frankenstein market of the stuff that's dangerous and other stuff that's really high quality, creating a yield, your ability to get in between it, figure out what's going to default, where do you want to be in terms of high yield. It's usually important, and there's one chart that I think is really cool is on the bottom right. If you take -- if you think about the year of the last 10 years, [indiscernible] drop interest rates to 0, keep them roughly at 0 or low interest rates for 10 years. Look at 2019, 2020. This is the returns from being in the long -- the best versus the worst, which is short, the worst. Look at 2019 and '20, it didn't matter what you owned. I mean, assets, financial assets are like potatoes. They are a little different, but basically the same thing. Look at it today, and this is -- and that's '22, the same thing in '23, think about commercial real estate, think about high yield, thinking about leverage loans, the ability to differentiate yourself over the next couple of years of all is going to be higher, dispersion is going to be higher. It's a different era. And I'd be a part of what -- if we came into this business, excited about being in dynamic markets, 2019 went a lot of fund. In 2020, if you like really looking at reading earnings reports because it didn't really matter. Now you're getting real dispersion, which I think is significant. Let me finish with one last thing about this and I'll just click through all of this. So I try and put a bit of data on each page. So I'm just going to throw this one out here. So -- and wrap on this page, just should be pretty clear in the back of the room. So I don't know, I just -- so I'll talk through this. So if you look at the upper left, this is 3 months, the yield for sitting in 3 months treasuries is [ 5.24 ]. I want to sit in cash, I'm worried about that ceiling and worry about U.S. China relation. I'm going to sit in cash. You get 5.24. The average for the last 10 years was 0.62 basis points, meaning cash was a zip. Now you're getting over 5%, 10 years [ 3.74 ] or [ 3.89 ] today, you go down it used to be [ 2.25 ], it's cheaper, but it's not that cheap relative to commercial -- relative to treasuries or by the way, commercial paper, which you can get 6% on, which is extraordinary 3-month commercial paper. Then you go European investment-grade credit, 1 to 3 years, [ 6.35 ]. No credit risk, no interest rate risk, really no credit risk. You're getting -- if your dollars invest swap it back to dollars, you get over 6%. I've known this a long time ago. 6.35 for no credit risk, no interest rate risk. High yield, you get [ 9 ], if you want to buy European high yield, you get [ 8.5 ] max, in Brazil you get [ 10 ] or [ 11 ]. Okay. So this is the key to portfolio management, I think, today in fixed income. Look at the bottom left. So we built a portfolio and said, let's take -- let's -- we want to build a stable portfolio, get clients into so you can take other risk, get them in the yield without a lot of vol. If you buy 25% commercial -- sorry, 25% treasury 6-month bills, you got 5.25-ish, commercial paper, you get, let's say, [ 5.75 ] take 15%. So 25% bills, 15% commercial paper, 40% in cash-like instruments. Then you go on and say, I'll take 10% mortgages, U.S. investment-grade 15%, maybe a sliver of emerging markets, 5% [indiscernible] Brazil, high-quality EM. Your portfolio carry is 6.2%, but you're vol -- I don't know if you can see that number there on the bottom left is 170 basis points. That's pure sharp ratio. 620 basis points of yield, 170 basis points sitting at 40% front end of the curve, no risk. By the way, look at what it was at the end of 2020, it was 3% yield and 330 basis points of all, meaning, I had to buy tons of high yield at 4%. They're going to yield, meaning it's a different era for fixed income. And I just want to throw one thing which Larry talks about, which I think is quite real and I'll finish on this one slide. Our business, so we invest across the full spectrum. We share insights globally. We see the full opportunity set, different obviously, active private credit index cash. So what is the opportunity in fixed income? It's one thing you look at those pyramid slides or it's one thing to say, well, gosh, you can build a portfolio at 620 basis points with 170 at vol, but it's just going to go away when the Fed starts easing, it's not true. The point I was making about what Larry talks about, there are 3 things that I think we're going through 3 secular changes, 3 megatrends in the world that are going to keep interest rates higher than they've been for the last 10 years, maybe last 20 years because inflation is going to stay sticky or higher. I think it's coming down at the margin. But what are the 3 things, demographics, there's not enough humans for the jobs. We'll hear [ Chair Powell ] today talk about wages being sticky, high is because we don't have enough humans for the jobs available until you get more immigration. That's going to be with us in the U.S., U.K., Germany, Japan, et cetera, for a long time. Demographics, one. Two, deglobalization, Larry talks about quite a bit. The era of I've got a reshore, I've got to build my infrastructure locally. I've got to vertically integrate locally. It's inflationary. Third point is the spend that we're going to see in the world -- we're going to talk about clean energy transition. The spend you're going to see in the world on clean energy, on infrastructure, on tech, AI, et cetera, the numbers are huge. That spend has to be financed. There's a transition, there's a hump of inflation in things like tech and infrastructure, it goes like this, and then it starts to come down over time. But in the near term, it's inflationary, meaning, I think we've got a 2- to 3-year window that I think those yields because of stickier inflation because the central banks are going to have to keep rates elevated, that I think is a good window for the opportunity. And again, I think the money comes in when the Fed stops. And I think we're getting close, and we're going to hear more about that today. So with that, I will pass the baton to private markets, my partner Edwin.

Rick, thank you. And now I've got Bob embedded in my brain. So I love the acronym. Really nice to see you all. I'm Edwin Conway, I lead equity private markets here at BlackRock. Actually, when we had a pleasure to convert about 2 years ago, I led the business as formerly called BAI or BlackRock Alternative Investors. And as you probably have seen over the past several months, we decided to realign several of our businesses with 2 primary purposes in mind. And if you think about what we're doing here is really to bring private markets to the forefront because it's the fastest-growing part of the alternative management industry. We believe not just that the case from the past, but certainly will continue to be the case in the future. Secondarily, we're trying to align ourselves exactly to how our clients are thinking. Now the notion that alternatives continue to be alternative is no longer true. Actually, when you spend time talking with their clients, they're very much thinking holistically and it's a little longer about public versus private, it's one and the other. So as you look at the business today, it comprises about $320 billion in assets. The illiquid part, the private markets part continues to drive a tremendous amount of growth. I'm going to spend a lot of time today really speaking about that. But the reality is we've enjoyed growth across all aspects of this business. Today, our clients are really asking for us to behave differently, I think, as an industry. Alternatives again, not being alternative, but historically, I think the behaviors of an alternative asset manager has been selling blind pools, walking in front of clients, talking about a fund structure that can solve their problem. The reality is that doesn't work anymore. And as a result, as we address this market that will continue to grow, we have to think about relying ourselves to that whole portfolio approach, and you'll certainly hear that throughout our presentation today. But you can see the composition of where we are. $156 billion today in our private markets, and this is where I'll focus some of our time in our discussion. From infrastructure to private equity to real estate, private credit and multi-alternatives, we very much built a business that is designed to be comprehensive. We've put together a platform that really leads us to enable choice. And by having choice and giving our clients an ability to choose with us how best to address the outcomes they need, we think we can deliver differentiated outcomes on their behalf. So yesterday's year of selling funds, today, it's about bringing together outcomes and solutions. Now much of our business is a direct investing business, but we also do have solution businesses where we create very specific bespoke client-centric exposure, becoming increasingly part of the demand of the alternative industry, I would say, watch multi-alternatives, you'll continue to see the pressure on this asset management industry to evolve to this approach, again, because one fund doesn't sell all of our clients' needs. But we are putting our clients' interest first. through this comprehensive platform, some of the things we've certainly enjoyed is growth. So our private markets platform, when you take a look at it at itself, we've enjoyed double-digit growth in assets and double-digit growth in revenues. In fact, assets have doubled since 2018, and revenues have more than 2.5x gone up since we -- went to really create a focus on the private markets initiatives. And clients are doing more with us. And I think this is an interesting theme you've heard across each one of our speakers and my colleagues today. The average commitment size over this period of time to the private markets on behalf of our clients has more than doubled. Another interesting fact is that clients with more than $100 million committed, now account for 87% of our illiquid client assets today. So the notion that clients are concentrating and doing more with fewer is absolutely true. These are complex assets. These are asset classes that are truly global in nature. And the way we address those needs is by removing the complexity, being able to develop and build on behalf of those clients, and we're going to continue to see this aggregation with one or fewer managers as opposed to the many. Because, in fact, when you look at many of our clients who've developed programs over the years, they're investing with hundreds, if not now thousands of funds. It's immanageable. So the concentration is happening, the consolidation is real and it's a big part of our going-forward story. But how are we positioned for the future? Why do we think about growth, given the environment that we're in? Actually, we expect to continue to grow. It's really driven by many structural dynamics that are thought. You'll hear from my colleagues in a few moments, with Dickon and [ Jim ] with regard to how we're taking advantage of the transition. Transition capital is alive and well. And you think about the stimulus that's now being created around the world because of necessity to transition across geographies, industries and sectors. Many of you heard Larry talk about the IRA, the inflation Reduction Act. Think about that $369 billion of stimulus. This is liquidity that's been injected into the system to allow for the investments, particularly in infrastructure assets in which we're leaning into as an organization, to deliver a much better outcome for our clients. In fact, and we don't have time today, I'd love to walk you through many instances for investments that we've made today as a result of that stimulus and tax credits would amount to about 30%, lifts the investment outcome by 400 to 500 basis points of incremental return. The Europeans are now responding. What you're starting to see is about EUR 1 trillion of response in public and private capital being brought to bear, watch the rest of the world take hold. The rest of the world won't allow the U.S. to have the advantage when it comes to the energy transition. More to come there, but what I will say, it makes these assets ever more attractive, hence, we're leading into the space. You've heard about private credit. Rich mentioned [indiscernible]. You've seen a banking crisis very recently. What's that allowing us to do was reimagine regulation. And what you're seeing is capital markets, asset managers actually continue to be the lender of choice. So you're starting to see all of this take a foot. So why am I feeling confident about the future is because of that. Today, we sit on about $33 billion of dry powder, as we invest that, that will unlock another $260 million of base fees. With some of the investments we're making, and I'll touch on performance in a moment, performance for us is very strong. In fact, performance today is table stakes. And given the table stakes that we've set, we do believe, as you add carrying performance on to this, no different than you've experienced here from 2019 to Q1 2023, a 40% CAGR in carried interest. As a result of the products we're building, the solutions we're developing, the returns we're providing. But all of this is wrapped in technology and a support network and muscle that BlackRock gives us. As a result of all of this, we're firm believers that actually we will double our revenue in the next 5 years. Why do we believe that? The industry in itself is sending us a message. When you talk to our clients as we do, they're telling us, again, this is core, this essential, they need to do more. In fact, many of you have seen our research at the start of this year, when we specifically interviewed some of our most strategic investors and clients around the world, actually sitting in 22 countries. Those clients represented $15 trillion of investable capital. And with great uniformity they said they're looking to increase their alternative allocation today, specifically private markets. When you look underneath the hood within each one of those clients, their private market allocation today stands at 24%. When you talk about what the future looks like, it's moving more closely to 30%. Again, not alternative, it's essential, it's core, and it's a critical growth engine to us and what we do for our clients. The wealth in my mind, new frontier. It's a $70 trillion plus marketplace. And when you talk to RIAs, private banks, wirehouses. Generally speaking, their clients invested 2% to 5% in alternatives. Short-term target allocation, 10%, long-term ambition, 20%. But very much in line with what we've said to you as well. We believe in the 50-30-20 portfolio, you'll have heard that from Martin in the past, equities, bonds and alternatives really changing in a very demonstrable way within the client portfolios. And as we're structuring new capabilities, new wrappers, new access points, now it's [ 40 Act ] funds we're bringing to market to give you and deliver private equity. Infrastructure. ELTIFs in Europe, European long-term investment funds. We're starting to lean into that engine, that grow engine, we believe, will be big for us. What you will see on the right, whether it's real estate, private equity, private credit infrastructure, all of these asset classes are expected to grow, and we believe that to be true. Fundraising. When I stood here and we talked 2 years ago, we said we'd accelerate fundraising for private markets. What we used to do in 5 years, we do in 3 years, raise $100 billion. We're very close to these raising, hitting that target. So as we close on this year, we'd expect to do that and some -- and it's really on the back of building, I believe, differentiated investment performance and vintage over vintage proving to our clients that this engine that is BlackRock can deliver for. So if you look at our diversified infrastructure, our climate infrastructure capabilities. Independent of the very difficult fundraising environment that we're in today, by having differentiated deal flow going from Fund 1, approximately in both cases, $1 billion to Fund 2, $2 billion and $3 billion, respectively, to [ 5 ]. And then now what we're in market today in aggregate with an excess of $14 billion of capital we would expect to raise for infrastructure capabilities. I think if you point forward to what Fund 5 will be, again, it will be a multiple of that, but it's built on the back of delivering excellent investment performance and making sure it's repeatable. How do we do it? It's interesting when you speak to the universe of clients today, you have tens of thousands of alternative asset managers. So it's really important that we can define our value proposition. Part of that value proposition, given the seat that we sit in, is a very differentiated deal flow. There's a tremendous amount of fatigue about the mass syndication that has existed in our industry. So the future, even based on our survey, the #1 thing our clients are looking for today as they select a manager, proprietary differentiated deal flow. And then how do we take the advantage that we have here given the brand that we have, the footprint, our relationships and our flexible, adaptable capital. So I've spent time talking with many of the CEOs of the companies in which we've made investments on behalf of our clients. So why us? Debt and equity capital, we invest early, we invest through the cycles. And by the way, should the desired outcome be a public offering, likely at some stage will be your largest shareholder. So the understanding that we play in each and every geography, we own and understand the sectors, we participate in all these industries, and we have this flexible pool of capital now across private markets makes us a very interesting partner. And hence, we get this access to differentiated deal flow. These companies want to work with BlackRock. We looked at 9,000 deals over the last year. We could have looked at so many more. We invested in about 5%. But I will -- maybe I'll point to one because we'll be out of time. Gigapower, a storied organization, AT&T, a joint venture we created with them because we're huge believers in the digitization of the economies. With Gigapower, in partnership with AT&T, we're going to bring fiber to homes that just don't have it today. It's a shocking thing to say, the percentage of U.S. households that are not Internet-enabled, it's a huge number. But by doing this with them, we believe we'll be enabling commerce and all sorts of activities that many of us enjoy here in New York, but actually, as you roam around North America. Today, net of fees, this capability is delivered for our clients, 31.6% net. We are capitalists. We are laser-focused on investment returns. This is about alpha creation but also about resilience in your portfolio and diversification. And I think as you look to the left and you think about long-term private capital, we feel very enthused not just about what we've built today, but our access to the opportunities of tomorrow. We spoke about diversified infrastructure moments ago in climate infrastructure. Both net of fees, these are delivering at target, are actually slightly above. Again, we do believe the investment ideas and flow that we're seeing will allow us to continue to deliver this type of advantage. And so to maybe to end, I'm going to say, I'm really proud of what the team have accomplished. It's an incredible platform. I really believe it's built for delivering for our clients. Outperformance with true partnership. It's about whole portfolios, so public and private assets together working in concert. And I think this is where we distinctly have this advantage because as you heard from Rob Goldstein earlier and Sudhir, when we harness big data and break it down into digestible bite-size pieces of information, you couple that with great technology, we have more informed fundamental investors, and we can continue to deliver investment performance for our clients. This will enable and be the engine of our growth for the future. Great people with great tech, with great data, we believe, deliver better investment outcomes. Nobody, I believe, has this toolkit that we have. And then this access, as I mentioned to this deal flow, these investment opportunities, our corporate relationships across the world absolutely unparalleled. We are leaning into this advantage, and we're hopefully going to continue to deliver this for our clients. I believe we have an investment performance that's excellent on a relative and an absolute basis. And I'm really enthused about what the future certainly brings, albeit with lots of change within this industry. Now with that, I mentioned the transition and the importance thereof. I'd love to hand it over to my partner, Dickon Pinner and Jessica as well.

Well, thank you, Edwin. We're very excited to talk to you today about the transition to a low carbon economy, which we see truly as a once-in-a-generation investment opportunity for our clients. And today, we're going to highlight 2 things. First, why the transition to a lower carbon economy matters for our clients. What we're seeing take shape in the real economy and how this is creating both investment risks but importantly, significant investment opportunities. And second, what BlackRock is doing to help our clients invest in this transition, how through the breadth of our global platform and the depth of our expertise and research-based insights we can offer something to our clients that others simply cannot replicate, a whole portfolio approach for an opportunity that touches every part of the portfolio, every sector, every region. This is a market, and we've talked about this in various aspects before, but this is a market where scale of global reach, corporate access and research analytics really matters. And through this approach, we are helping clients achieve their targeted investment outcomes in alignment with their objectives and preferences. This transition really represents a full-scale rewiring of the global economy, and we see 3 drivers: technology, innovation, growing consumer and investor preferences for lower carbon products and shifts in government policies, which Edwin just described. And these drivers actually all reinforcing each other. So as technologies develop and become more advanced, they become cheaper. And this leads to more demand as lower carbon alternatives become more affordable. And in turn, governments create incentives, which we talked about, for lower carbon technologies, which lowers the cost even further, and so it continues. Alongside these drivers, critically, corporates, we think, will play a primary role. Large incumbents will be particularly important as they own most of today's customers, most of today's supply chains, infrastructure and engineering expertise. It's interesting to note but we have typically over 17,000 C-suite interactions with corporates a year, an indication of how deep our relationships with corporates really are. And as these companies work through this transition, they will present a unique source of investment opportunities for our clients, whether it's growing new businesses, like we are doing with the Canadian waste management business or outsourcing critical infrastructure, Rachel alluded to this, like we're doing with gas pipelines in the Middle East or decarbonizing our company's assets. We believe that even the most cash-rich companies will need a financing partner. Now these trends are also reshaping production and consumption globally and spurring massive capital investment. The past few years have seen an increase in capital investment being made in the energy system and the transition. Indeed, the IEA recently estimated that such investment covering everything from power plants, oil and gas facilities to cooling systems and cars has increased to around $2.8 trillion in 2023, which is up from about $2.3 trillion per year over the last decade. And we see that investment continuing to grow as the transition unfolds, averaging probably around $3.5 trillion to $4 trillion a year. That equates to an increase of more than $1 trillion of CapEx a year. And if you include the capital reallocation and the new capital combined between now and mid-century, that's about $100 trillion investment opportunity. Our research also shows but continued investment is needed in both low carbon and importantly, high carbon portions of the energy system to help match supply and demand as the transition unfolds at different speeds and to create resiliency. All this will require replacing today's operating expenses with new capital expenditures, which requires massive upfront financing and we believe that these capital flows can represent investment opportunities across asset classes, where these shifts have not yet been fully priced in by the markets. Now make no mistake, this transition will be a complex and difficult process, characterized by a lot of volatility as new profit pools emerge and existing ones shift between sectors, players and regions and the successful investors of the next decade will be those who can navigate that complexity and a significant cost and price discovery that still lie ahead of us. Now let's talk about cost and price discovery. For that to happen, financial capital needs to be connected to the transition opportunities. And we believe BlackRock is uniquely positioned to help our clients, if you like, the sources of capital, connect with investment opportunities, which is the uses of capital across the corporate life cycle. In this way, we think BlackRock will become a capital flywheel for the transition. And BlackRock has uniquely strong relationships across this ecosystem. And we can help our clients invest in the transition to give them those access to those unique deals and opportunities. And as you heard from Edwin and Rick earlier, our deal sourcing capabilities are one of our key differentiators in delivering for our clients. By working closely with an ecosystem of companies, we can also mitigate the risk in new investments. So this is not just about sourcing, but this is also about providing the offtake to reduce the risk of infrastructure investments or providing -- reducing input commodity risks. It's also important to note that the transition to a low-carbon economy is about [ end ], not all because the asset base of the economy turns over actually at very different rates. What does that mean? That means we need renewables and fossil fuels. We need electrons and molecules. We need metals and fuels. So given this complexity, clients have been clear that they want to work with BlackRock as their partner of choice to help them invest across the whole capital stack and across all stages of the corporate life cycle, which you see listed on this page. Because each of these stages presents different opportunities and our clients want access to all of them. We're helping our clients invest in many of these opportunities today from an early-stage sustainable fabrics company to establish high-speed electric charging businesses and so on. And with that, I'll turn it over to Jessica to talk about how we are activating the BlackRock platform.

Great. Thank you. So understanding our clients' needs, helping them manage risk. This is what inspired BlackRock's founding 35 years ago, and it's what we've been doing ever since. So as Dickon laid out, this transition to a low carbon economy creates a series of opportunities and risks throughout various sectors and regions. And our clients are asking for help. So in a recent survey of 200 global institutional investors, 56% told us they expect to increase their allocations to transition strategies over the next 1 to 3 years. And as with other megatrends we've studied, whether it's demographics, digitalization or the rewiring of the overall supply chain, our job is to help our clients understand how this transition will affect our portfolios. As a fiduciary, we provide choice to meet our clients' needs. We deliver the best risk-adjusted returns within the mandate clients give us, and we underpin everything we do with research, with data and analytics. So now I'll elaborate on how this applies to our transition investing platform, highlighting how scale powers our growth. So today, our transition investing platform has over $100 billion of offerings across index, liquid active and private markets. This breadth of our platform offers our clients the choice to access this transition in line with their specific investment objectives and across the whole portfolio. And we're especially proud that we continue to develop new products often in partnership with our clients. Now what differentiates these individual building blocks, it's the power of the platform, bringing this all together to take our whole portfolio advisory practice through the Aladdin platform that Sudhir talked about earlier, we can analyze our clients' portfolios and then recommend adjustments, including custom strategies to meet their decarbonization goals. We stitch together research, technology and analytics. So that platform brings together our Aladdin technology to financial modelers, the risk management platform. With macroeconomic researchers, climate scientists as well as investors who have fundamental views on companies, projects, cost curves. Lastly, Edwin, Rick, Dickon just talked about our corporate network and sourcing. Our global reach and real economy expertise power our deal flow and help us understand how value chains and ecosystems will be reshaped. So this connectivity gives us insights into the biggest challenges and opportunities facing companies which in turn means the biggest investment opportunities for our clients. And what brings all of this together is the connectivity we have across the platform. It's our ability to deliver as one BlackRock at scale. So clients want to access this transition in different ways. It could mean investing in an index product that seeks to provide sector-neutral exposure, but overweight companies better prepared for the transition to a low carbon economy. It could mean targeting exposure to specific transition themes like Clean Tech or critical minerals like copper, which is used many infrastructure projects or lithium, a critical component of batteries. For example, last week, and Salim mentioned this, we launched 2 transition focused ETFs. This launch secured enough C capital to be the largest global launch in ETF history, with an initial investment of $2.9 billion globally. It's a great example of the power of our platform and connectivity with clients. Clients are also interested in accessing the transition through active strategies, using our fundamental or systematic approaches to uncover alpha and to figure out which effects of this transition are or are not currently priced in, in the current market. As Edwin just spoke about, we also have a diversified market-leading suite of private market transition capabilities. Each of these strategies on this page are led by investors with decades-long track records. And to focus on what Edwin just said, our growing success and scale in our infrastructure franchise. Today, capital is needed to scale renewable power and strengthen grid reliability. Soon, infrastructure for low carbon transport will be a big opportunity. And further down the line, advances in clean hydrogen, carbon capture and low carbon aviation fuels may be the next major breakthroughs. Now investing in this transition requires global reach and expertise. You need to understand the nuances, risks and opportunities in every market and sector and you need a platform to execute, and that's what we've built. We're doing a lot, and there's more to come. And I just want to highlight a few examples. In the U.S., we're building a 1,500-mile pipeline system for carbon capture. As Rachel mentioned earlier, in Australia, we're building what will be the world's largest and most powerful battery. And we've invested in the largest onshore wind farm in Africa, which will provide about 12% of Kenya's electricity supply. As Rachel said earlier, these investments are raising our profile in local markets around the world. As Martin and Rob mentioned in their presentation, we deliver our whole portfolio platform with service, access and expertise. So service and everything we do at BlackRock, we start by listening to our clients' needs. It's no different with helping clients navigate the risks and opportunities associated with this transition. Access. We're building an industry-leading transition investing capability by bringing together insights across clients, corporates and the real economy. Expertise. We're delivering BlackRock's investment expertise to help our clients meet their investment objectives across the whole portfolio, powered by research and analytical tools. And all of this is possible by executing as one unified team, as one BlackRock. So thank you very much for your time, and now we invite you to take a short break. [Break]

Thanks again for joining us. I'm going to talk about how [indiscernible] connects [indiscernible] together for our clients. I'm going to make 3 points, and then Martin is going to bring us home before Larry closes us. So my 3 points are: first, that in every segment of the world, our clients, big institutions, advisers, everything in between, are looking for closer, more intimate relationships with asset managers and especially BlackRock. Second, the trick which we've been prefiguring all of this session is bringing the global and the local together. 80% of what our clients are looking for are global, global strength, expertise, scale, operating efficiency, investment talent. But it's the last 20%, which Rachel noted is where the magic happens. It's where you bring it alive in a particular client setting anywhere in the world. And the third part is I'm going to close with some arithmetic. And the arithmetic is pretty simple. If you take 2 premises that the capital markets and asset management will continue to grow and that this tendency toward more and more with fewer and fewer asset managers continues, I'd actually argue it's strengthening, but just if it continues, then the path to our 5% growth target is clear. So this is what we talk about today. It's a lot. It's actually, when you put it like that, a bit overwhelming. So how do we deliver it to all of our clients around the world. We've got digital brokers in Berlin. We've got insurance companies in Texas. We have sovereign wealth funds in Asia. We've got asset managers in Toronto. We've got financial advisers everywhere. But let's look a little deeper at to what they're really looking for because most of what they want is actually pretty much the same. They all want investment help. We have a set of regime changes in our clients' portfolios and what they're asking us about that are -- start with the rate shock, a 40-year rate shock, the unwinding of the U.S. Chinese global WTO system, the rise of industrial policy, the transition to a low carbon economy, inflation, recession, et cetera. And those questions are global questions and we get them everywhere. But if you dig deeper beneath what those questions are and what else is on our client's mind and sometimes primarily what's on a client's mind, it's forces that are changing their business models, their industries. I'm going to go through a few of these. And the point is all of it leads to one urge which is, as a client, as Steve said, let's focus on our core strengths and then let's use BlackRock as an extension of our business model. Portfolio over product is first, and I would argue the biggest change in our industry in the last 5 to 10 years. Our industry used to be -- still is organized around product. That is still how our clients pay us. The vast majority of our revenues come from individual products. But clients want product and more. They want help on their overall portfolio. They want portfolio advice. It could be the custom managed solutions that we heard Rich talk about earlier, or it could be a strategic asset allocation study for a giant sovereign wealth fund in Asia or it could be the outsourcing that Stephen laid out, which is the battle space of asset management in '23. Second is professionalization and institutionalization of investing within our clients, especially in wealth. So what you're seeing around the world in every client segment is deeper and deeper institutionalization of how money is managed. It means models for financial advisers. So not a cottage industry, but going to industrial scale. It means within RIA and financial adviser teams in the U.S., the designation of a CIO within the team so that the 50 or 100 other advisers can focus on clients. It can be the growth of discretionary portfolio management in Europe or it can be tying back to outsourcing. A big bank in New Zealand or Australia or the Netherlands saying, Asset Manager, please come over and take over our entire portfolio construction for our clients. All of that is about professionalization. The third part is customization at scale, we talked earlier about Aperio, about the growth everywhere of clients seeking individualized portfolios that meet their needs, whether it be factor risk, tax management or some form of value orientation. But it's also in the $70 billion in the last 2 years that we've converted and won in Europe to go from standard benchmarks off the shelf to customize portfolios that meet that client specific investment objectives, most commonly oriented towards the transition to a low carbon economy, that intimacy that customization at scale. And margins and price. If the undercurrent in our whole industry, it's actually been at the forefront of how we work with our clients, that they are under margin pressure. They are desperately looking for operating efficiency. As one client said to me last week, we used to have 5 J-curve bets. We're down to 1 J-curve bet. And when they want a deeper, more intimate relationship, they're looking for discounts on volume. So what's the upshot? Clients want to do more with fewer. They want a more intimate relationship with their asset manager with BlackRock. Now it's our mission. We want investors everywhere to say, if I've got a problem, I want to hear what BlackRock has to say. And if there's anyone I trust to solve my problem, I want it to be BlackRock. So tomorrow, we're hosting a conference of CEOs in the wealth industry to talk about what's happening in their industry, what's happening in their businesses. Rich talked about helping an RIA get to $5 billion by giving them custom models. Last week, I was in a meeting in Europe with a client who said -- we manage half of this client's portfolio. And we ask, look, what else can we do better? Is there something we can do to help. And the client says, yes, there actually is. We'd really like to do a strategy session, a skull session with you to sit down and help us figure out how to go from $5 billion to $100 billion. That is business co-creation. So to do that, and we've heard this from Rachel, we've heard it throughout the day, we need to bring the breast of our firm to our clients. 80% of that value is brand, investment teams, knowledge of the industry operating scale, all global. But where it all comes together is what Rob talked about being Japanese in Japan. I'd actually say it's being an Iowa in Cedar Rapids. It is working with neo banks in Europe. We didn't even exist 5 years ago and are now becoming a fastest-growing segment in wealth management, helping them to take the learning we have from the U.S. and bring it to Europe to work with them so they can grow their investment propositions faster than anyone else. It's working with a firm like AIG as it actually goes through a corporate restructuring and decides to focus on what is really good at, which is liability underwriting and actually hand the asset management over to us or a finished fund that decides that it actually wants to move a significant amount of capital, almost $3 billion into strategies that lead into the transition and jointly execute a launch in both Tokyo and New York in the biggest ETF launch ever, or it's launching decarbonization partners with Temasek, a client, a joint venture partner, it's all together. So what's our true competitive advantage when you pull this together, is that when as a firm, we unite when we get focus on a client need, we are the best in financial services at bringing it all together. So how does it all come and convert into revenue growth? So basic arithmetic, and Martin is going to talk about what all this means for shareholders. But let me just talk about what client trust means for revenue growth. Two premises I mentioned upfront. The first is that we have to believe that the capital markets and asset management will continue to grow. Rich -- sorry, Rick mentioned with the relative decline of banks and bank intermediation relative to the capital markets, the flip side being the rise of private credit. We have the deepening that Rachel talked about that is yet to come, still coming around the world of capital markets and professional money management. So the first thing is industry continues to grow. You can see we've taken a fairly conservative projection of what happened in the last few years. Then we said that clients keep favoring the integrated firm, which again, my own view is, and everything we see everywhere is that clients want to do more and more with fewer and fewer, intensely so versus even 3, 4 years ago. But let's just take the last few years is actually the trend. Put all that together, that 5% organic growth rate is within our grasp. And our share -- and this is really important to understand because people think we're big, but we're not. Our share is only 2.7% today. If all this happens, we hit our objectives, we'll only have a share of 3.1% in 2027. There is so much further for us to go. And now Martin is going to turn to what this all means for our shareholders. Thank you.

Thanks, Mark. The vision that my colleagues paint of the future, it's exciting. It's a new era of opportunity for BlackRock, and you've heard about how we're innovating for clients. So let's examine how we use our excellence in serving clients to drive value for BlackRock shareholders. 10 years ago, this month, we held our first BlackRock Investor Day. Prior to that, BlackRock stock was 80% held by 3 large institutions. Larry and Rob could literally make 3 phone calls and connect with the vast majority of our investor base. Today, we're proud to have thousands of owners of BlackRock. BlackRock was a different firm then. Our AUM was less than half of what it is today, and Aladdin proudly served 50 clients. We use that event to launch our road map for shareholder value. Now after 10 years, over $5 trillion of AUM and 1,000 Aladdin and eFront clients later, our road maps consistent. We know markets will fluctuate. We focus on generating organic growth, driving operating leverage and returning excess capital to our shareholders. In the last 5 years, we've executed on each element of our framework. On average, we've generated 5% organic asset and 5% organic base fee growth, meeting our target across the market cycle. In some markets, we'll exceed this target. But even during significant dislocation in 2022, we generated positive organic base fee growth. We continue to drive operating leverage via our scale. We're regularly studying where we can do things better, faster, more efficiently. We're leveraging our innovation hubs to generate more fixed cost scale. We're making more concentrated investments for future growth. From 2017 to 2021, we expanded our as-adjusted operating margin by 270 basis points. Beta is still our highest margin item and our results in 2022 reflect the immediate impact of falling markets on our AUM and revenue. Finally, we've delivered a predictable capital management policy and strategy. Over the last 5 years, our dividend has grown at a compound annual growth rate of 10%. We also returned $7.9 billion to shareholders through open market repurchases of our stock at an average price of $524 per share. Assuming stable markets, we anticipate continued execution of this framework to deliver consistent growth in operating cash flow and EPS. You heard today about our platform strategy and our various growth drivers. The strategy is working. We've logged durable, consistent organic growth significantly in excess to the peer group over the last 5 years. We don't strive to be the fastest grower in any given month or quarter or year. Over the long term, we've delivered higher and more consistent organic asset growth than peers. We continue to target 5% organic base fee growth for the long term and across market cycles. In the last 3 years, we've exceeded our target, delivering 7% organic base fee growth. Over this time, we've seen both record highs and historic declines in markets. We've seen and adapted to changing client risk preferences all along the way, and there have been periods when growth was more concentrated in a particular category. But BlackRock is not reliant on any one strategy or asset class. As you can see, all of our businesses have delivered organic base fee growth over the last 3 years. It's this diversification of our investment and technology platform, it's a distinct competitive advantage for us. It positions us to deliver for all stakeholders in a variety of market environments. Our track record, our platform strategy, our whole portfolio approach that give us confidence about our organic base fee growth targets. Achieving this aspirational goal on average in the next 3 years represents adding over $1.8 billion in net new base fees. That's a meaningful upside to our revenue. Although markets fluctuate and may lift or lower our revenues, we focus on delivering the BlackRock platform to clients that's access to unique opportunities, expertise and world-class client service. Our focus has fueled consistent organic asset growth even in tough markets. Over the last 10 years, we've generated nearly $3 trillion of AUM growth. Some years, markets went up, some down, some flat but BlackRock won client mind share and share of wallet through out. When clients entrust assets with BlackRock, we do well for them. They tend to stay with BlackRock, they often increase their use of BlackRock capabilities as Rob Goldstein showed you. And I spoke earlier about how BlackRock has changed since our first Investor Day. You can see it here, from 2012 until the end of 2021, we saw over $2.5 trillion of net inflows. This organic growth alone is larger than many of our competitors' entire businesses, and we did it in fewer than 10 years. Even with market moves impacting our 2022 results, BlackRock delivered over $300 billion of net inflows, while the rest of the industry was in outflows. We've also expanded our margin since then. Through the end of 2021, we expanded our as-adjusted margin by approximately 640 basis points. Again, our 2022 margin primarily reflected historic market declines and foreign exchange headwinds. Our as-adjusted margin also reflected ongoing strategic investments in better, more efficient technology to generate long-term operating leverage and, of course, investments to recruit and retain the best talent in our industry. We've always been selective in our investments and management of an operating model to support delivery of a premium operating margin. We believe a new market regime marked by rising and higher interest rates requires the same or greater investment and management acumen to grow profitably. So we'll aim to make more concentrated allocations of capital and people against capabilities that can deliver the highest levels of organic growth or improve operating efficiency. We'll look to find more opportunities to variabilize expenses. We'll aim to generate more fixed cost scale through technology and automation, including generative AI applications and we'll continue to build on our success in strategically footprinting scale generation activities in our innovation hubs around the world. Our capital management strategy remains consistent. We invest first in the business, either to scale important growth initiatives or to drive operational efficiency and then return excess cash to shareholders. Our priority remains to invest organically in the business, but we also use inorganic investments to expand our capabilities and growth opportunities. Over the last 5 years, after investing for future growth, we've returned an average of more than 80% of our earnings to shareholders, including a record $4.9 billion last year. Our businesses are largely fee-based, generating strong recurring cash flow from operations. BlackRock's credit metrics and ratings reflect our strong business profile and prudent approach to balance sheet management. We're rated AA3 by Moody's and AA- by S&P. Last month, we capitalized on improved conditions for debt issuance and pre-refunded our March 2024 debt maturity through the issuance of $1.25 billion of 10-year debt at a coupon of 4.75%. Our scale, consistent cash flow and asset-light business model allow us to invest organically by seeding or co-investing in products with our clients. This provides a distinct competitive advantage by reducing time to market for critical product initiatives. It also supports the fundraising of larger amounts of client capital seeking to align interest. During 2022, we allocated over $400 million to these investments. Our seed and co-investment portfolio, including unfunded commitments, totals approximately $4.9 billion. 2022 revenues attributable to our seed and co-investment strategy were $2.6 billion. This includes potential future annual base fees on the committed capital in our liquid alternatives business that Edwin referenced earlier. Seed and co-investment are attractive uses of our capital. Our estimated internal rates of return on these activities are 25% or higher. While exercising prudent risk management and financial discipline, we'll continue to look for new opportunities to use our stable cash flow to seed and co-invest in new products, especially in private markets. As you heard from Edwin, our Private Markets franchise has delivered double-digit growth in client assets and revenue. We've raised over $80 billion since our last Investor Day. And last year, we realized $263 million in carry revenue, which represented over 50% of BlackRock's overall performance fees. At the same time, our gross carried interest balance continues to grow and represents a significant source of future revenue. We're targeting to double revenue in our Private Markets franchise over the next 5 years. So we expect to invest in growing this business by using our financial strength to bridge successor funds, to facilitate growing co-investment activity and seeding new fund launches. These investments can unlock future revenue and earnings potential for our shareholders. Turning to inorganic investments. Our acquisition philosophy continues to focus on broadening our technology capabilities, expanding our global distribution reach and scaling our private markets franchise. We won't make acquisitions that dilute our future organic growth and have no interest in consolidating businesses simply to cut costs. In certain circumstances where control transactions are simply not possible or opportune, we'll also pursue strategic minority investments. The primary purpose of these minority investments is to drive incremental revenue for BlackRock products to incubate future capabilities or to otherwise create value or convenience for our clients. Since our last Investor Day, we've made investments in emerging disruptors in digital wealth, investments in option strategies, capabilities and in retirement. Just this month, we announced our acquisition of Kreos Capital, adding venture debt capabilities and further strengthening BlackRock's global credit platform. And as Sudhir mentioned, we announced our technology partnership with Avaloq to link Aladdin Wealth with Avaloq's core banking system. This will ultimately scale both businesses and better serve joint clients. We expect this new market regime, this hard pivot of a tightening cycle will present compelling inorganic opportunities. And historically, especially in periods of dislocation, our willingness to reimagine our business, be nimble and seize on emerging opportunities. It's bolstered our growth and generate differentiated value for our shareholders. We recognize that dividend income is an important part of many of your portfolios. We continue to target a dividend payout ratio in the 40% to 50% range. Once again, we believe that the diversification of our business model, leading to a more consistent and stable cash flow profile supports a dividend payout ratio at the high end of our peer group. BlackRock first paid a dividend 20 years ago in 2003, and since that, we've steadily increased it. Over that time, our dividend per share has grown at 17% compound annual growth rate. Share repurchases are another key element of our capital management strategy. After using our cash to grow the business and satisfying our commitment to the dividend, we will return the balance of capital to shareholders through share repurchases. Share repurchase is therefore an output of rather than an input into our capital management policy. Since the end of 2012, we've repurchased over 13 billion of shares at an average price of $428. This has reduced our share count by 13%, and repurchases more than offset share issuances associated with deferred comp plans. Importantly, we also generated a 15% compound annual return for our shareholders. As we mentioned on our January earnings call, we intend to repurchase at least $1.5 billion of shares during 2023, subject to market conditions. We'll remain opportunistic to repurchase additional shares if we see attractive relative valuation opportunities. Since we set out our shareholder value framework at that first Investor Day 10 years ago, we've achieved or exceeded our 5% organic base fee target in 7 of those years and remain positive in each of the other 3. More importantly, we've achieved our 5% organic base fee growth target on average over the last decade. When everything is firing, we've shown we can rise above that target. And when the market legs down, we've proven we can stay positive even as the industry turns negative. In addition, we've expanded our as-adjusted margin in 7 out of the last 10 years. Despite a 400 basis point decline in 2022 on the back of historically challenging markets, we've expanded our margin by 240 basis points over the last 10 years. Our differentiated growth helped us deliver significant total return for our shareholders, over 300% in the last 10 years. That's well above both the S&P 500 and our large cap peers. And while past performance is no guarantee of future results, we remain committed to delivering attractive returns to our shareholders over time. So I'll conclude where I started. Our ambition is to be the cloud of investment management and technology. We believe our platform strategy, combined with the access we provide, the industry-best expertise we deliver for our clients and our constant aim for excellence in client service means we will deliver differentiated organic growth and operating leverage over time. We've historically been at our best in taking market share and consolidating our position with clients through and following market regime changes just like this one. We view our strategy as sound and our financial position is a source of strength to invest prudently in service of our clients and our shareholders. So I want to thank you again for joining our Investor Day today, and I'm going to pass it over to Larry Fink for some closing thoughts.

Hi, everyone. Hopefully, everybody is enjoying our new facilities, our new auditorium. It really does connect all of us together. It is a great connector and culture builder for BlackRock. So welcome, everybody, and thank you for joining BlackRock's 2023 Investor Day. And I want to go focus on things like how we grew, where we are. And now for 35 years, BlackRock has been -- has led by listening to our clients. And hopefully, you all heard that from all the different presentations. And we've been evolving the company to helping our clients achieve their long-term outcomes and solutions. That commitment has resonated with them and is behind everything we've done as a firm, whether it's unlocking new markets through iShares or pioneering whole portfolio advisory. We're launching Aladdin on the desktops of investors and so much more. Clients have been on the foundation of our growth strategy, informing the investments we make across all our businesses. And our focus on delivering client outcomes has been that a finding factor of BlackRock differentiated and industry leadership. As you heard from Martin, we are building the sole platform strategy and asset management that brings together product services and technology to solve our clients' investment and technology needs. We envision BlackRock to be the investment manager cloud for asset managers and asset owners. In the same way that organizations across industries move from paying for their own servers and support staff to cloud providers, clients are transitioning their investment management and financial technology requirements to BlackRock. And clients are coming to BlackRock as a scale enabler using our platform as a service to streamline and support the growth and commercial agility of their own business. The unique combination of our technology, of our advisory alongside our ETFs and active and private market capabilities enables BlackRock to deliver a better client experience, leading the clients consolidating more of their portfolio with BlackRock or engaging with us for full portfolio outsourcing solutions. This, in turn, continues to differentiate our organic growth and I believe it will continue to differentiate our organic growth into the future. I commit we will always start with the clients. I'm committing to all of you that our strategies will be proven to be resilient. And over the last 5 years, clients have been trusted BlackRock with over $1.8 trillion of net new assets translating to nearly $3 billion of net new base fees. BlackRock has never been afraid to make big investments in big bets. Our willingness to disrupt ourselves and the industry to deliver better outcomes to clients, created the foundation of what BlackRock is today and we'll be driving our growth into the future. We made a bet on taking our proprietary internal Aladdin technology and offering it into their external clients. Now as you heard from Sudhir, it's a $1.4 billion financial technology business used by 1,000 organizations with 130,000 users. We're not only growing Aladdin's capabilities, we're making a bigger addressable market by extending into adjacent offerings. We made big bets -- real big bets in our transformational acquisitions of Malin and BGI to build a multi-asset, multichannel investment platform and to bring active index under one roof. And that was at a time when most people never believe that active and passive could be under one roof. In between Milan and BGI, we made another bet during the financial crisis launching our financial markets advisory practice, which provides critical insights to our clients and build businesses for BlackRock. eFront and Aperio may have been smaller in size, but they were also transformational. In every presentation today, our leaders spoke about how clients are demanding whole portfolios outcome-oriented services and seamlessly combining public and private market investments. BlackRock is the only company that can offer both whole portfolio investments and technology through eFront and Aladdin. You also heard in multiple sessions how the portfolio of the future is blended across the horizontal. It's personalized, it's customized. And our acquisition of Aperio is helping us build and bring the personalized portfolios of the future at scale to our clients. And what made all of the acquisitions so successful and I want to really underscore this. Was our steadfast commitment to integrate, I want to underscore, integrate the organizations into one BlackRock. Totally connected to our clients under one platform, under one culture using one technology. As a result, BlackRock is greater than the sum of any one part, and that drives and I believe it will continue to drive our differentiating growth. This willingness to reimagine our business and the seize opportunities has accelerated our growth and generated value for you, our shareholders. Our leadership team is focused on challenging ourselves to think. What opportunities will this environment create for BlackRock and our clients and what can we do to meet and anticipate our clients' needs. How can we evolve our organization, our operating structure, our investment capabilities and our service model in doing so leading industry. Our ability to adapt, to transform, to evolve, to take risk and grow has generated a total return of [ 7,500% ] for our shareholders since our IPO in 1999, which is well in excess of the broader equity markets and represent a business model serving every one of our stakeholders. I spent a lot of time with clients. And in fact, I just got back from a week of meetings with clients in Japan and Australia. And I always come back from these client visits, feeling more energized, more enthusiastic about our model and our positioning with our clients. On this trip, I was especially struck by how much our partnerships and profile is resonating around the world. You heard about the exciting investments we're connecting clients into the private markets, including one related to the transitional low carbon economy. Our connectivity across the real economy is bringing benefits to both clients and to the communities in which these projects are operating. I'm very proud of the partnership with AT&T on the Gigapower JV in the U.S. Our investments in Acacia energy in Australia and many more. Our growing profile from these investments is leading more and more investment opportunities, which will be delivering growth for BlackRock and our shareholders. As I speak with our clients, I hear how their expectations of asset managers are completely changing. Clients are seeking a broader range of advice and they're looking for help to help them achieve their needed and desired outcomes. This includes understanding everything from the changing market environment, to evolving regulatory requirements. Today, conversations are rarely about one product or a product, but more often they're about portfolios and increasing. They're about our platform. We are organized around our clients, not products, not silos on delivering one BlackRock through one platform. That evolution from product to portfolio to platform creates enormous growth potential for BlackRock. As you heard throughout this morning, clients are looking to do more with fewer. They want just a few partners who they can really build a deep and trusted relationship. And sometimes, they're looking at us for one single partner to help them invest across whole portfolios to provide insight to help them manage risk and capture new opportunities and to deliver technology to power and visualize their investment process. So they can be more assured they're achieving their necessary responsibilities and goals. Clients are choosing BlackRock because of our unique platform, connecting indexed, connecting active and private market capabilities together with advisory, with research and with technology. I'm more confident than ever that we're delivering one BlackRock to clients more often with cohesive horizontal connectivity and a set of integrated services to reach their necessary and targeted outcomes. Let me state very clearly, this is the future of investing and we will continue to be at that forefront. Our leadership in outsourcing is a clear example of how BlackRock is bringing together the full resources of our firm to help our clients and to deliver for our clients. On the back of regulatory changes on competitive pressures and broader macro dynamics, clients are choosing to outsource more and more of their whole portfolios. They're choosing BlackRock because of our broad investment capabilities, our market-leading technology and our expertise and third-party manager selection. In the last 5 years, BlackRock has been entrusted to lead a number of significant outsourced mandates totaling over $500 billion in AUM. Again, these mandates reflect our presence and our partnership with clients around the entire world, unions and corporate pension funds in the U.S., AIG, LV and other insurers, British Airways and Royal Mail in the U.K., Colonial First superannuation in Australia, to name only a few. Our momentum is a result of many years of listening to our clients thoughtfully and deliberately investing in the infrastructure to support complex global mandates. Across our firm, we're delivering BlackRock to meet our clients' needs and unlock those new opportunities for them. The powerful simplicity of our business model is that when we deliver value for our clients, we also create more durable value for you, our shareholders. Let me talk about leadership for a second. After today's presentations, I hope you're taking it away not just the conviction of our strategy and the opportunity ahead but also a deeper appreciation for the people who are leading BlackRock forward. You've heard today from global leaders across our business. Let me just say this is an incredible remarkable group of individuals, and a just fantastic leadership team. I want to take all the leadership team and thank them for all their amazing work and commitment to our clients, to our shareholders. But just as importantly, to each other, and to our colleagues across the firm. I am more confident than ever in BlackRock's leadership team and our future as a company. But I hope you have also seen today; these are not just individual leaders representing individual business groups. But this is a hyper-connected team working across a hyper-connected platform. It is about collaboration and horizontal leadership. This is essential to our success, to our growth. But let me be clear, this is not happening magically. This is not -- this is a lot of hard work. This is a result of years of working together. And the team collectively imagining how we could better bring the power of the entire firm to our clients. The leadership team together were friends. We have fun together. We've been a lot of -- we've been together with a lot of ups and a lot of downs. And I said before how BlackRock is greater than the sum of the parts. I hope you feel the same way I do about the group of leaders. Everyone here is an extremely talented individual, but we're much better as a team. I'm not planning to leave BlackRock anytime soon, but BlackRock's Board and I have no higher priority than developing the next-generational leaders for BlackRock, and hopefully, you're seeing that. I've always said that my goal is to ensure that when Rob and I have moved on that the firm is better off than it is today. And I'm very confident we're going to achieve that goal. Earlier, I mentioned how my time with clients have always energized me and a topic that energizes so many of our clients is artificial intelligence. My team here knows that I'm a fan of dystopian movies and books. And I won't go down that road today, but I really can. I want to present today a more optimistic view. And I believe it's going to have some very large outcomes for long-term investing. I see AI presenting transformational opportunities. I've talked about how the collapse of productivity has been an essential issue in the global economies and I believe it is an essential reason why we have such sticky inflation. I believe that AI has a huge potential to increase productivity, increase knowledge base, transforms margins across sectors. It may be the technology that can bring down the inflation. What I'm so confident in, AI has the ability to accelerate scientific discovery and change how humans live and operate and enjoy. At BlackRock, we continue to advance in our usage of artificial intelligence and associated disciplines, whether it's machine learning, data science, natural language processing to drive and enhance productivity. And progress for our clients, our employees and our stakeholders. I've joked about our leadership team to be almost as neurotic as I am. It's how BlackRock stays ahead but I'm actually really happy to report that I think some of these leaders who presented today may be more neurotic than I am. And when it comes to AI, we're going to bring the same healthy paranoia, the same healthy enthusiasm that will define our movement in AI, and it will be essential in how we work in the future. No matter how and what brings in the future, BlackRock will continue to bring the entire firm together to serve clients. As I said earlier, I came back from the recent visits with clients more excited than ever about the growth that we have that we get attained together. I strongly firmly believe that no firm can deliver a platform service like BlackRock. We offer our clients the most choice in the industry. But we have one culture, one global client business, one trading function and one technology and the power of that connected platform and collaboration and creativity of our leadership team will enable us to deliver that differentiating growth for the future. We'll take the big bets when they come and I'm sure there's going to be tremendous opportunity in those bets. I want to thank you for joining us today and being a part of BlackRock's past, our present, our future. Now we're going to open it up for questions, and I'm going to go invite all the leadership team to take these orange chairs and sit down. And we're going to be -- we're welcoming questions from our shareholders and sell-side research analysts. And anyone who has a question, and I'm going to allow the CFO, Martin to lead the process.

So if you have a question, I see people are getting started. [Operator Instructions] Maybe we'll start right in the middle here with Craig.

If you guys -- and Larry, thanks for putting on a great event here. Craig Siegenthaler, Bank of America. Given that we have Rick Rieder here, President and also Rob Kapito, I wanted to hit on the potential for fixed income rebalancing, not just in attritional fixed income but also private credit and money market, which has a lot of momentum. So how do you think about this in terms of timing? I know, Rick, you mentioned kind of a 3-year period. Could this be a 3-year period of above-average flows? And then also, how should we think about magnitude? .

So let me start. I would say I have never ever been more excited about investing in fixed income than I am today. And I would tell everybody here in your personal portfolio and your parents portfolio. This is a generational change. 60% of all fixed income is over 4%. We've been waiting for this for a very long time. Get out there and start investing. But over the last many years, when fixed income had no return or, in fact, a negative return, many things have changed in the market structure. And today, using both active and ETFs or passive is a bigger opportunity than it ever has been. On the active side, Rick has more opportunities to add Alpha than he's had in the last many years. And Salim, who is here representing ETFs, the market structure has changed such that ETFs are being used by 9 out of 10 of the largest asset managers alongside active to tip it, to flip it for liquidity, for hedging, and we're learning every day of newer ways to use ETFs alongside of active. I think the market is going to explode and it's raining fixed income no matter what happens with the Fed, this is an incredible generational change. So maybe to accent that, let me turn it over to Rick to say something about the market and active and Salim to jump in there and don't let them out to you on the ETF side.

So take a couple of things. So first of all, I do think we're getting to the tail end. I think -- by the way, it's interesting that the flows have started to come in more aggressively in Europe, actually in the active side than the U.S. And I think the ECB vacating have a bit more to go. But people are sitting on -- let's talk about scale and magnitude, the $6 trillion sitting in money market funds today. I mean it is immense, the amount of money that's flowed and obviously, you've got some transition out of deposits. But that money is -- so if you take the money market fund flow, you take the amount of deposits that are going to rotate out the curve. People are waiting and I think you're going to see a big move. I think you see it like -- in total return type of opportunities. People are going to start to go out the curve. But I can say one thing from a bigger picture. Larry talked about the infrastructure spend, the financing that's going to happen alongside of clean energy, et cetera. I mean that's going to be a huge amount. I want to throw out one thing that I think it's so different. We lived in this world for the last 10 years of 0 interest rate, negative interest rates in Europe. Negative interest rates is the craziest thing I've ever seen. If you think about what happens if you're doing a financing of infrastructure, a toll road of any functional long-term investment, if you have negative interest rates, nobody shows up for the debt. Everybody shows up for the equity because your IRR on the equity is going to be 10%, 12%. So you get this massive inflow into cash. I want equity on private equity. All of a sudden, if you return on the fixed income and the equity, if you have -- and by the way, I think about what happens to your weighted average cost of capital on those projects goes higher because everybody is sitting on the equity part of the change. It's crazy. It lifts the cost of capital despite of like you bring the interest rate down. Going forward, you can run what is a reasonable weighted average cost of capital because you've got a 40, 60, 30 probably 37 the equity debt mix. And all of a sudden, you can finance, like Rob said, you finance tremendously effectively. It's -- you bring down the weighted average cost of capital to fund infrastructure toll road, et cetera, and it's just a better mechanism instead of budgeting pension system, the insurance system. Now people get real return by the insurance companies, pension funds. I think you're going to see a big shift. By the way, money is going keep coming into private equities, keep coming, it's coming big time to private credit. But anyway, I think it's a better framework because you have more normalized interest rates than you saw over the last decade or so. .

And when you have the performance that we do in fixed income historically and currently, we should see a significant amount of those flows. And you can comment on that Salim on our market share.

It's in fixed income. And I think there are 2 really important drivers underneath some of the fixed income ETF numbers that I put out. One of them is for all the people like Rick all over the industry. The -- as I said before, we have 9 of the 10 biggest active managers in the world using our iShares and bond ETFs. Larry, of course, ask me afterwards who's the 10th and how do we go after them, but we'll get 10 out of 10 over the course of the next year. But the important point is that many of them are using this to be able to trade and scale, trade much cheaper than the underlying. If you look at something like LQD, it costs 38 basis points to trade the underlying bonds because basis point to trade in LQD. And if you look at even just the changes amongst insurance companies, I know Rob talked about this a year or so ago, when the shift happened in New York State insurance companies, some of our largest holders of things like LQD or HYG are now New York-based insurance companies 1 year later. So it's unlocking a whole group of professional bond investors all over the world who just find it cheaper and better and more efficient to trade in the bond ETFs rather than in the underlying bonds itself. And it's a -- we're a tiny, tiny portion. 2% today, 3% or 5%, even with the projections I put out in terms of that marketplace over the next 5 years.