GIP Acquisition Impact
Q: How will the GIP acquisition affect financials into 2025?
A: BlackRock's acquisition of GIP is expected to double its private markets management fees, adding over $400 million in annual earnings at margins north of 50%. Management anticipates $250 million in management fees in Q4 and projects $1 billion in fees with an FRE margin exceeding 50% for 2025. The consolidation brings in $116 billion of GIP client AUM, with $70 billion in fee-paying AUM.

Net Flow Outlook
Q: Do you expect strong net inflows to continue next year?
A: BlackRock experienced robust inflows of $221 billion in Q3, showing great breadth across the business. Management expects the acceleration of re-risking activity to continue into next year, especially post-election. Money market funds, which stand at $850 billion, have been durable, but a return to fixed income is benefiting flow trajectory.

Margin Expansion Strategies
Q: What are your levers to drive margin expansion into 2025?
A: BlackRock generated 350 basis points of margin expansion year-over-year, with operating income rising 26%. Management focuses on disciplined investments, variabilizing expenses, and leveraging technology to drive operating leverage and industry-leading margins. Despite AUM increasing by $3 trillion since the end of '22, headcount remains broadly flat, demonstrating scale and productivity gains.

Fee Rate Trends
Q: Will the fee rate stabilize or increase in coming years?
A: With the GIP acquisition, BlackRock expects the fee rate to increase by 0.5 to 1 basis point. As private markets grow, with client AUM increasing from $170 billion to $285 billion, management anticipates positive leverage on base fee revenue and average fee rates over time. The shift toward higher-fee products like private markets should mitigate past fee pressures.

Earnings Growth Outlook
Q: Should we expect stronger earnings growth alongside hitting base fee targets?
A: Management believes that by driving 5% organic growth and executing their financial rubric, they can achieve industry-leading margins and double-digit EPS growth. The lower 5% EPS growth this quarter was impacted by a higher effective tax rate of 26%, due to a $22 million discrete expense versus a $215 million benefit last year.

Wealth Management Strategy
Q: How are you revolutionizing the wealth management opportunity?
A: BlackRock aims to help wealth managers build portfolios blending public and private markets. With retail allocation to private markets in the low single digits, there's significant growth potential. They have over $40 billion in retail liquid alternatives and are expanding evergreen and credit interval funds, with products like CREDX and BDEBT exceeding $1 billion. Integrating semi-liquid products into their $300 billion managed models and SMAs could be a significant unlock.

Digital Assets Ambitions
Q: What opportunities do you see in digital assets?
A: BlackRock views Bitcoin as an asset class, an alternative to gold. Management believes the application of digital assets will expand with increased liquidity, transparency, and better analytics, regardless of regulatory changes. The firm foresees a broadening market for digital assets as data and analytics improve.

Fixed Income RFP Activity
Q: Have you seen changes in fixed income RFP activity due to recent market issues?
A: BlackRock notes that money is in motion, with large institutional mandates up for RFP regularly. They recently won a $30 billion mandate from a pension fund. Management sees large blocks of business moving around as a common occurrence, offering significant opportunities.