Blackrock, Inc. · NYSE:BLK
Blackrock — Investor Day (June 2018)
196 slides from Blackrock's investor day presentation, Jun 5, 2018
Slide 1: Investor Day 2018
INVESTOR DAY 2018
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations. For
Slide 3: Important Note
Important Note As indicated in this presentation, certain financial information reflects previously reported amounts and does not reflect the recast related to the adoption of the new revenue recognition standard. For further information, refer to the Current Report on Form 8-K furnished on March 22
Slide 4: Strategically Positioned for Long-Term Growth
STRATEGICALLY POSITIONED FOR LONG-TERM GROWTH Geraldine Buckingham Global Head of Corporate Strategy Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Day slide deck, wh
Slide 5: Structural shifts are transforming the asset management industry
Structural shifts are transforming the asset management industry 5
Slide 6: The impact of these trends is significant and happening quickly
The impact of these trends is significant and happening quickly 6
Slide 7: Technology
Digital Universe, in Zettabytes Technology 180 is shaping client experience, operations, data-driven investment capabilities and the broader competitive ecosystem. 45 The digital universe is growing rapidly 5 2013 2020E 2025E Source: Estimates provided by International Data Corporation as of April 2
Slide 8: Regulatory change
US Fee-Based Assets Regulatory change $20tn is reshaping investment management operating models and driving increased focus on transparency and suitability $11tn Regulation is driving a $5tn shift to fee-based assets 2010 2015 2020E Source: Cerulli Intermediary Distribution 2017; BlackRock 2017 inte
Slide 9: Client focus on product value propositions
Global ETF Assets1 Client focus on product value propositions $12tn is creating a need for asset managers to leverage scale for 19% greater efficiency CAGR $5tn ETF industry AUM is growing and expected to reach $12tn in assets by 2023 2018E 2023E 1. Source: BlackRock internal estimates as of April 2
Slide 10: Low return expectations
60/40 Model Portfolio Returns Low return expectations 11.0% Are driving investors to seek holistic portfolio construction solutions (illiquid alternatives) in 7.1% the search to capture yield 4.2%2 The return of a 60/40 model portfolio is expected to come down from 11.0% to 4.2% 1 1 2 '90-'99 '10-'Y
Slide 11: Emerging Asia
Emerging Asia AUM Growth Forecast ($tn) is experiencing demographic, economic and regulatory shifts 2017 2021E CAGR that are creating significant growth opportunities APAC 12.9 17.9 10.5% Global 76.5 98.8 5.2% APAC industry AUM is expected to grow faster than global AUM Source: McKinsey Global Growt
Slide 12: BlackRock is well positioned with key differentiators
Technology and Scale BlackRock is well Investment Global & Local positioned with Platform Distribution key differentiators to meet client needs Culture and Talent 12
Slide 13: We are pursuing a two-pronged strategy to drive our growth
We are pursuing a two-pronged strategy to drive our growth 13
Slide 14: Establish strong market position
1 iShares® Establish strong market position Factors Retirement in highest growth areas Illiquid Emerging Asia Alternatives 14
Slide 15: Extending our value proposition
Portfolio 2 Construction & Asset Allocation Extending our Operational value proposition Aladdin® Efficiencies by leveraging our scale and technology to deliver value for clients Distribution Data & AI Technology 15
Slide 16: Our approach to executing this strategy
Our approach to LOCAL AND GLOBAL executing this NEAR AND LONG-TERM IN strategy is DURATION AND IMPACT DRIVEN BY ORGANIC INITIATIVES WITH TARGETED INORGANIC SUPPORT 16
Slide 17: Client needs are changing and successful asset managers will adapt
1 Client needs are changing and successful asset managers will be those that swiftly adapt 2 BlackRock’s scale, platform breadth, technology and culture distinctly position us to thrive 3 Focused execution of our strategy will lead to long- term growth 17
Slide 18: The Benefits of Scale: Technology, Operating Platform, Global Reach
THE BENEFITS OF SCALE : TECHNOLOGY, OPERATING PLATFORM, GLOBAL REACH Rob Goldstein Chief Operating Officer Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Day slide de
Slide 19: BlackRock by the numbers
BlackRock by the numbers 30k+ 4k+ 31.8mm Aladdin users BLK funds trades in 2017 6.4mm 150k+ 2.3mm risk reports client orders positions reconciled daily monthly monthly 84 11 71 offices data centers cities Source: AUM per public filing. Other figures per internal BlackRock data. All figures as of 3/3
Slide 20: At BlackRock, technology enables scale
At BlackRock, INVESTMENTS technology DISTRIBUTION enables scale benefits OPERATIONS 20
Slide 21: Investments, Distribution, Operations
Generating Alpha Efficiently producing Beta INVESTMENTS Product innovation Scaled distribution DISTRIBUTION ‘Portfolio consultations’ Peer studies OPERATIONS Operational excellence Controlled efficiency Risk management and control 21
Slide 22: Leveraging BlackRock's scale and technology to deliver for clients
Leveraging BlackRock’s scale and technology to deliver for our clients Sample client: Global insurer BlackRock’s Holistic Partnership $15bn+ $5bn+ $3bn+ $1bn+ $30bn+ Fixed Income ETFS Equities Alts Managed Full Aladdin services by BlackRock Custom portfolio solutions 22
Slide 23: Insurance Peer Risk Study
Insurance Peer Risk Study Starting Point Analysis Results NAIC Investment Risk Industry Statutory Filings Modeling Leading Insights 500+ U.S. insurance 800,000+ holdings Income and total return companies 3000+ risk Factors Efficient use of risk $5.9tn in cash investments across life, P&C and health
Slide 24: BlackRock's growth
Controlled Efficiency: 2012 2018 BlackRock’s growth $3.8tn AUM $6.3tn AUM Δ +66% Δ +74% $390mm $677mm Tech & Risk Tech & Risk Mgmt. Rev Mgmt. Rev1 10,500 Employees 14,000 Employees Δ +33% Note: Information above reflects previously reported amounts and does not reflect the recast related to the adop
Slide 25: Accelerating our ability to innovate, lead and disrupt
Accelerating our ability to innovate, lead and disrupt the financial services industry 1 Leading the industry in using data 2 Opening Aladdin® to unlock greater innovation in our platform 3 Transforming wealth management through technology 4 Expanding use of BLK technology across the financial ecosy
Slide 26: BlackRock Lab for Artificial Intelligence & Data Science Core
1 Leading the industry in using data We launched The BlackRock Lab for Artificial Intelligence & Data Science Core Two new initiatives to accelerate how BlackRock uses artificial intelligence and associated disciplines 26
Slide 27: Opening Aladdin to unlock greater innovation
Opening Aladdin to unlock greater innovation 2 in our core platform We launched Aladdin Developer Modernizing the way engineers and users engage with Aladdin, enabling our clients to build their own applications 'on top' of our platform 27
Slide 28: Transforming wealth management through technology
3 Transforming wealth management through technology We launched Advisor Center with simple, user-friendly tools powered by Aladdin, helping advisors manage and scale their practices 28
Slide 29: Expanding the use of BLK technology across the financial ecosystem
Expanding the use of BLK technology across 4 the financial ecosystem We are implementing the largest custody asset conversion in industry history provider + accounting Leveraging new Aladdin capabilities and offerings 29
Slide 30: Expanding the use of BLK technology across the financial ecosystem
Expanding the use of BLK technology across 4 the financial ecosystem We acquired ® Simplifies the cash management process for banks and their corporate clients Note: for illustrative purposes only. 30
Slide 31: BlackRock Tech Academy
Investing in our people, 5 process and infrastructure We launched the BlackRock Tech Academy Resources to help employees increase their TechIQ and start their journey to tech fluency through coding 31
Slide 32: Technology as a business
Technology as a business: delivering scale, transparency and innovation to our clients 32
Slide 33: Technology-enabled revenue and direct technology revenue
Technology-Enabled Direct Technology Revenue Revenue Scaled distribution Alpha generation Product innovation wealth Customized holistic solutions ® ® 33
Slide 34: Aladdin supports complex transformational change
Aladdin supports complex transformational change 34
Slide 35: Multinational financial services company partnership
We partnered with a multinational financial services company to streamline their operations and achieve scalable growth $500bn+ assets ~1,000 users Note: This is a case study illustrative of a BlackRock client. Numbers do not represent BlackRock. 35
Slide 36: Transforming the Aladdin Business
Transforming the Aladdin Business Since 2012, we’ve doubled 17% 37% the number of countries 63% where Aladdin is used 83% 2012 2017 30% of Aladdin Business revenue is from outside Fixed Income Multi-Asset of the United States Source: BlackRock. Note: Percentage of clients by asset class depicted abo
Slide 37: Still early days…
Still early days… 20% of the Top 200 23% of the 17% of the Global Asset Managers Top 100 U.S. Pensions Top 250 Insurers 20% 17% 23% 80% 77% 83% Note: Top 200 Global Asset Managers includes BlackRock. Source: Pensions and Investments as of Sept. 2017. 37
Slide 38: Aladdin Acceleration Plan
Aladdin Acceleration Plan Enhance and Expand Activate the scale service Aladdin’s Aladdin & delivery reach community model Deeper relationships and Fit-for-growth Network effects penetration in new markets operating model 38
Slide 39: Aladdin Wealth: bringing institutional capabilities to wealth management
Aladdin Wealth: bringing institutional capabilities to wealth management Over the past year, we 2% of Global Private Wealth positioned Aladdin as a powerful solution 2% for wealth providers …and see a path for 98% continued opportunity Source: BlackRock internal estimates as of May 2018. 39
Slide 40: Tech & risk management revenue growth
Tech & risk management revenue growth 12% over last 5 years CAGR $677 $596 Tech & risk management revenue $528 $474 $433 ($mm) $390 2012 2013 2014 2015 2016 2017 Note: Information above reflects previously reported amounts and does not reflect recast related to the adoption of the new revenue recogn
Slide 41: Aladdin is BlackRock
Aladdin is SCALE GROWTH INNOVATION BlackRock 41
Slide 42: Investment Platform Built for Outcomes
INVESTMENT PLATFORM BUILT FOR OUTCOMES Rob Kapito President Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Day slide deck, which are incorporated herein by reference.
Slide 43: Industry's broadest platform
7% Cash Industry’s 27% broadest Alpha- seeking incl. 2% platform 66% Non-ETF Index Alts across alpha-seeking, index and & iShares® ETFs cash management strategies to construct holistic portfolios for clients AUM BY INVESTMENT STYLE Note: AUM as of 3/31/18. Alpha-seeking strategies AUM refers to acti
Slide 44: Industry's broadest platform
$455bn Cash Industry’s $1.7tn broadest Alpha- seeking incl. $104bn platform $4.2tn Non-ETF Index Alts across alpha-seeking, index and & iShares® ETFs cash management strategies to construct holistic portfolios for clients AUM BY INVESTMENT STYLE Note: AUM as of 3/31/18. Alpha-seeking strategies AUM
Slide 45: Spectrum of investment strategies
Spectrum of investment strategies High Illiquid Conviction Alternatives Traditional Expected Return, Outcome Alpha Fundamental Systematic Active* Factors Index Active Risk, Liquidity, Fee *Long-only 45
Slide 46: BlackRock % assets above benchmark or peer median
BlackRock % assets above benchmark or peer median 37% 50% 1-year 1-year 63% 83% Taxable Tax-exempt as of 3/31/16 50% 85% 3-year 3-year 58% 72% Fixed income 68% as of 3/31/18 5-year 5-year 74% 89% 90% 41% 1-year 1-year 64% 66% 84% Equity Systematic as of 3/31/16 Fundamental 84% 58% 3-year 3-year 77%
Slide 47: We leverage the full capabilities of our investment platform
We leverage the full capabilities Performance of our investment platform Portfolio TO DELIVER CLIENT OUTCOMES Construction Risk Management Alpha Value Index + CLIENT Cash Factors OUTCOMES 47
Slide 48: iShares: Toward $4 Trillion
iSHARES : ® TOWARD $4 TRILLION Mark Wiedman Global Head of iShares and Index Investments Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Day slide deck, which are inco
Slide 49: BlackRock Index Strategies
BlackRock Index Strategies % of BLK Total $4.2tn $4.2tn Index AUM $1.8tn iShares AUM 66% Total AUM Retail Index MFs Other 2% 2% $5.2bn Fixed 47% Income 2017 Base Fees 56% 22% $306bn 42% 76% 83% 2017 NNB iShares ETFs Institutional $245bn Index Equity 67% 2017 iShares NNB AUM as of March 31, 2018. Bas
Slide 50: How we got here
How we got here The path to $2 trillion Beyond $1 trillion • All portfolios active Growth from here • $3.6tn industry AUM • “A lot more room to by 2017 grow” $1.1tn $1.8tn • Global competitive advantages • Core $978bn $823bn iAUM May June June Today 2013 2014 2016 (5/31/18) Industry AUM: $3.6tn as o
Slide 51: How we got here
How we got here 70% of growth has been organic $1.1tn $1.8tn $978bn $823bn iAUM May June June Today 2013 2014 2016 (5/31/18) Industry AUM: $3.6tn as of January 24, 2017. Today: As of April 30, 2018. Sources: BlackRock, Markit, Bloomberg. 51
Slide 52: iShares business today
iShares business today $1.8tn $4.1bn RoW $67 $195 Europe $363 $1,000 product Europe U.S. U.S. $1,367 $2,917 product AUM ($bn) 2017 Base Fees ($m) 844 funds globally AUM and number of funds as of April 30, 2018. Base fees as of December 31, 2017. Sources: BlackRock. Rest of World (RoW) includes Asia
Slide 53: U.S. flows and AUM share
U.S. Quarterly flows (share) AUM (share) 46% iShares 31% 41% 39% iShares 22% 27% Vanguard 24% 25% Vanguard 15% 18% 17% State Street -11% State Street 1Q April 1Q 2018 2012 2018 As of April 30, 2018. Sources: Markit, Bloomberg. 53
Slide 54: Europe flows and AUM share
Europe Quarterly flows (share) AUM (share) 54% 40% 43%iShares 21% iShares 19% Deutsche Bank 11% Deutsche Bank 7% 14% 6% 12% Amundi 12% 9% Lyxor 3% 3% Lyxor 3% 6% Amundi 1Q 3Q April 2012 2017 2018 As of April 30, 2018. Sources: Markit, Bloomberg. Quarterly flows data set excludes outlier data from 2Q
Slide 55: Where we are going
Where we are going ETF market set to double again by 2023, driven by four secular drivers Our strategy: segments and scale BlackRock estimates, May 2018. 55
Slide 56: ETF adoption continues apace
ETF adoption continues apace Cumulative Global iShares NNB ($bn) Adoption / penetration of a technology $246 2017 $141 2016 $129 2015 Thought we 5/31/2018 $102 2014 were here $58 $62 2013 Are we here? J F M A M J J A S O N D Time As of May 31, 2018. Sources: Markit, Bloomberg. For illustrative purpo
Slide 57: Secular drivers of demand
All-to-all networked trading Secular ETFs as Value for alpha tools drivers of money demand Fee-based wealth management 57
Slide 58: Scenarios through 2023
Scenarios through 2023 Hot 14000 13000 12000 $12tn 11000 20% 10000 Warm 9000 8000 7000 $9−10tn 13-15% Cool 6000 5000 4000 $7tn Industry 3000 10% 2000 CAGR AUM 1000 $5tn 0 Industry hit $5tn (1/22/18) 2018 2019 2020 2021 2022 2023 For illustrative purposes only. Scenario calculations based on propriet
Slide 59: Leading the industry
Leading the industry Segments Scale Products Clients Core Global Institutions Global brand Fixed Income European Wealth Smart Beta / factors U.S. Wealth Two Sustainable Global global Technology product footprint Precision / thematics lines Financial Instruments Investment & operating platform 59
Slide 60: Factors: equity style box
Factors SINGLE FACTORS Morningstar Large Cap Large Cap Large Cap category Value Blend Growth VLUE QUAL MTUM 15 bps 15 bps 15 bps Value Quality Momentum Morningstar rating1 Value Blend Growth 3-year performance 58 out of 1,215 75 out of 1,326 29 out of 1,371 rank2 (8%) (7%) (3%) EQUITY STYLE BOX Larg
Slide 61: Bonds: as ripe as equities?
Bonds: as ripe as equities? Low cost indexing has performed % rank vs. Morningstar intermediate term bond category Lower volatility / dispersion across bonds Agg Replicating bond indices is (AGG) 3-year 41% old hat now Institutional investors tilting Universal Universal (IUSB) 22% toward indexing Ba
Slide 62: Fixed Income liquidity
Fixed Income liquidity U.S. iShares 70 Bid-Ask on underlying bonds (bps) 50 45 15 15 Bid-Ask on ETFs (bps) 1 1 1 1 1 Core U.S. $ IG Corp. $ HY $ EMD U.S. TIPS Agg. (AGG) (LQD) (HYG) (EMB) (TIP) As of April 30, 2018. Sources: BlackRock, Bloomberg, Barclays, NYSE Arca. There can be no assurance that a
Slide 63: Futures and ETFs
Futures and ETFs 3-year tracking difference vs. S&P 500 Index 0.5% 0.0% IVV iShares Core -0.5% S&P 500 ETF -1.0% Funded S&P 500 -1.5% Future (LIBOR) -2.0% S&P 500 Future -2.5% (Funded Risk-Free) -3.0% As of April 30, 2018. Sources: BlackRock, Bloomberg. Assumptions: futures contract is fully funded,
Slide 64: Futures and ETFs
Futures and ETFs 3-year tracking difference vs. S&P 500 Index 0.5% 0.0% IVV iShares Core COMING SOON: -0.5% S&P 500 ETF -1.0% Funded S&P 500 -1.5% U.S. Corporate Bond Index Future (LIBOR) Futures based on iShares ETFs -2.0% S&P 500 Future -2.5% (Funded Risk-Free) -3.0% As of April 30, 2018. Sources:
Slide 65: Leading the industry
Leading the industry Segments Scale Products Clients Core Global Institutions Global brand Fixed Income European Wealth Smart Beta / factors U.S. Wealth Two Sustainable Global global Technology product footprint Precision / thematics lines Financial Instruments Investment & operating platform 65
Slide 66: Pricing framework
Pricing framework Growth High Invest to lead future market Price Low High sensitivity Low For illustrative purposes only. 66
Slide 67: Orthodoxy re-examined
Orthodoxy re-examined Average organic revenue growth 2017 - 2018 2nd Qtr 2017 2017 - 2018 - 2018 43% U.S. iShares 2015 - 2016 Core 1st Qtr 2015 - 2016 26% Source: BlackRock. Note: Average organic revenue growth over two year period. 2018 data annualized after April 30, 2018. 67
Slide 68: Where we are going
Where we are going ETF market set to double again by 2023, driven by four secular drivers Our strategy: segments and scale BlackRock estimates, May 2018. 68
Slide 69: Still early days
Still early days All equities All bonds Futures & Swaps (ex-rates) $83T $96T $25T Alpha Seeking 20 20 Indexing 11 5 ETFs ETFs ETFs $4T $0.8T $0.2T Sources: World Federation of Exchange Database (WFED), BIS (data as of Q2 2017), HFR, Cerulli, Simfund (data as of Nov 2017), iShares GBI (data as of Nov
Slide 70: Appendix
Appendix 70
Slide 71: Know your vehicle: fundamental structural differences
Know your vehicle: fundamental structural differences Index ETFs Futures • The standardization of contracts and efficiency of electronic • Priced, traded and settled like ordinary equity shares on exchange trading in the majority of futures markets helps support large trading Key attributes volumes
Slide 72: Carefully consider the iShares Funds' investment objectives
Carefully consider the iShares Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com.
Slide 73: Generating Alpha Through BlackRock's Platform
GENERATING ALPHA THROUGH BLACKROCK’S PLATFORM Mark D. Wiseman Global Head of Active Equities, Chairman of BlackRock Alternative Investors and Chairman of BlackRock's Global Investment Committee Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclo
Slide 74: Alpha-seeking strategies comprise the largest revenue pool
Alpha-seeking strategies comprise the largest revenue pool in the industry $76tn industry assets under management globally 70% of global industry AUM is alpha-seeking $320bn asset management industry revenue globally 90% of global industry revenue is generated from alpha-seeking assets Source: McKin
Slide 75: Active management has evolved over time
Active management has evolved over time ALPHA ALPHA ALPHA FACTORS BETA BETA 75
Slide 76: BlackRock is well positioned to deliver alpha
BlackRock is well positioned to deliver Alpha alpha in a rapidly changing environment Index + Factors Cash 76
Slide 77: BlackRock Alpha-seeking Strategies
BlackRock Alpha-seeking Strategies $6.3tn BlackRock AUM 27% Non-ETF Index & iShares® ETFs (66%) Alpha-seeking (27%) 66% 7% Cash (7%) AUM as of 3/31/18 Note: Alpha-seeking strategies AUM refers to active AUM reported in BlackRock’s earnings release 77
Slide 78: BlackRock Liquid Alpha-seeking Strategies
BlackRock Liquid Alpha-seeking Strategies % of BLK Total AUM Breakdown $1.6tn 3% 26% Total AUM 19% 50% 66% $4.9bn 34% 45% 2017 Base Fees 28% $533mm Fixed Income (50%) 89% Institutional (66%) 2017 Perf. Fees Retail / Wealth (34%) Multi-Asset (28%) Equity (19%) Liquid Alternatives (3%) AUM as of 3/31/
Slide 79: Key differentiators for alpha generation
BlackRock’s key differentiators for alpha generation 1 Technology & innovation 2 Scale • Combining human insight and innovative • Leading corporate access and research technology to generate alpha • Trading infrastructure & expertise • One of the industry leaders in data • Access to market participa
Slide 80: Creating connectivity across investment teams
1 TECHNOLOGY EXAMPLE: Creating connectivity across investment teams Active Equity Integration and Data Data Research Product Analytics FUNDAMENTAL Responsibility for data Develop and implement SYSTEMATIC ACTIVE driven machine learning models used by Active ACTIVE EQUITY research processes Equity tea
Slide 81: Global Capital Markets team
2 SCALE EXAMPLE: Global origination platform Deal structuring capabilities Global Capital Capital markets insight Markets team Broader participation Leverages scale Concentrated buying power to seek to enhance Increased liquidity fixed income investment performance BETTER ALPHA OPPORTUNI
Slide 82: Performance is the critical enabler for ultimate success
Performance is the critical enabler for ultimate success 1 We are leveraging our technology, scale, scope and depth of expertise and talent to generate alpha for clients and drive growth for BlackRock 2 Top performing products enable distribution teams to have high quality engagements with clients 3
Slide 83: Focused Execution Driving Growth in Illiquid Alternatives
FOCUSED EXECUTION DRIVING GROWTH IN ILLIQUID ALTERNATIVES David Blumer Global Head of BlackRock Alternative Investors Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor D
Slide 84: BlackRock Illiquid Alternatives
BlackRock Illiquid Alternatives % of BLK Total Client assets breakdown $67bn 27% 1% Client assets1 8% 8% $281mm 26% 3% 2017 Base Fees 31% $62mm Direct Solutions 11% 2017 Perf. Fees Infrastructure (27%) Private equity solutions (26%) Private credit (8%)2 Alternative solutions (8%) Real estate (31%) N
Slide 85: Institutional investors planning to increase alternative allocations
BlackRock Capabilities Institutional Infrastructure 4% 50% investors globally are planning to Private Credit 9% 62% increase their Real Estate 5% 36% alternative allocations over Private Equity 5% 39% the longer term Decrease allocation Increase allocation Source: Preqin Investor Outlook: Al
Slide 86: Significant room to grow in illiquid alternatives
BlackRock has significant room to grow in illiquid alternatives Illiquid $4,925 Billion1 $67 Billion2 1% Industry BlackRock BlackRock Alternatives Assets Client Assets Market Share Infrastructure Private Credit3 Real Estate Private Equity BlackRock Client Assets ($billions) 18 52 21 17 BlackRock Mar
Slide 87: Four key differentiators to drive organic growth
Four key differentiators to drive organic growth 1. Performance 2. Scale 3. Breadth 4. Share BlackRock Illiquid Diverse, high- Specialized Diverse strategies New way to access Alternatives performing talent and distribution across risk / return high growth wealth robust sourcing & and client spectru
Slide 88: BlackRock illiquid alternatives over time
BlackRock illiquid alternatives over time Phase 1 Phase 2 Phase 3 $67 $64 $50 $52 $44 $41 $36 $29 $26 $24 $23 $88 $99 $78 $75 $56 $62 $33 $7 $18 $11 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q18 Illiquid Alternatives Performance Fees ($mm) Illiquid Alternatives Client Assets ($bn) Note: Cli
Slide 89: Strong fundraising momentum across platform
Illiquid Alternatives ($bn) Strong fundraising momentum across platform 15 9 8 3 Nearly $35bn in gross fundraising (3) (6) (6) (1) across BlackRock illiquid alternatives since 2015 2015 2016 2017 3/31/18 Year to date Gross fundraising Return of capital1 Note: Gross fundraising as of 3/31/18 and incl
Slide 90: $18bn of committed capital available for future deployment
7% $18bn of 12% 36% committed capital 16% available for future deployment 29% Infrastructure (36%) Alternative solutions (12%) Private equity solutions (29%) Real estate (7%) 2 Private credit (16%) $110mm future Committed capital is not included in AUM, annual base fees1 and once deployed, is a sour
Slide 91: Organic growth is accelerated by inorganic strategy
Organic growth is accelerated by inorganic strategy 91
Slide 92: Case study: BlackRock's infrastructure platform
Case study: BlackRock’s infrastructure platform Energy & Power $20 Infrastructure (First Reserve) $16 Client assets ($bn) $12 Infra Solutions Mexico $8 Infrastructure (I2) North American Infrastructure European $4 Debt Renewable Infrastructure Power Debt Formed 2011 $0 2012 2013 2014 2015 2016 3/31/
Slide 93: Differentiators support future growth in alternatives
BlackRock’s differentiators support future growth in alternatives 1 The benefits of BlackRock’s technology, global platform and scale will drive differentiated growth in illiquid alternatives 2 Growth will be accelerated by strategic organic and inorganic investments in the platform 3 Illiquid alter
Slide 94: Cash Management: Seizing Opportunity in Times of Disruption
CASH MANAGEMENT : SEIZING OPPORTUNITY IN TIMES OF DISRUPTION Richie Prager Global Head of Trading, Liquidity and Investments Platform Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc.
Slide 95: BlackRock Cash Management
BlackRock Cash Management AUM Breakdown % of BLK Total 1% $455bn 14% 7% 56% Total AUM 28% 67% 29% 5% $558mm Strategy: US Government (56%) Wrapper: 5% Money Market Funds (67%) 2017 Base Fees International (29%) Other Cash Products1(5%) US Prime (14%) Separate Accounts (28%) US Municipal (1%) 95% Inst
Slide 96: BlackRock Cash Management
BlackRock Cash Management AUM Breakdown 1% $455bn $712bn 14% 56% 28% Total AUM Total Portfolio View1 67% 29% 5% $558mm Strategy: US Government (56%) Wrapper: 5% Money Market Funds (67%) 2017 Base Fees International (29%) Other Cash Products1(5%) US Prime (14%) Separate Accounts (28%) US Municipal (1
Slide 97: Cash management industry has endured regulatory reform and low rates
The cash management industry has endured global regulatory reform and historically low interest rates 97
Slide 98: U.S. Money Market Funds before and after regulatory reform
U.S. Money Market Funds (“MMF”) before and after U.S. regulatory reform +$1tn shift from prime & Competitive yield Fund consolidation2 muni to gov’t1 and fee pressures2 $2.8tn $2.8tn 1.52% 546 1.33% 379 Regulatory $2.2tn Changes $1.0tn 0.08% 0.20% 2014 2017 2014 2017 2014 2017 Government Prime & Mun
Slide 99: Cash Management has captured market share
Cash Management Industry 2013 2018 AUM $3.4 trillion $3.7 trillion BlackRock Cash Transparency focus Medium High Management has NAV MMF pricing Stable Stable and variable captured market Consolidation Low Medium share, despite BlackRock Cash Management muted industry 2013 2018 Growth growth AUM $276
Slide 100: History of Innovation and Growth
History of Innovation and Growth 1973 Innovation Starts Here Cash includes BlackRock’s oldest fund – the 1st institutional MMF1 BLK and PNC 1995 Assume oversight of cash assets 2006 MLIM Merger Strengthens muni capabilities and global reach BGI Acquisition 2009 Adds $75bn in cash assets 2010 Regulat
Slide 101: Technology-led distribution will power next wave of growth
Technology-led distribution will power BlackRock’s next wave of growth in Cash Management 101
Slide 102: Digital Strategy
Digital Strategy Evolving the cash investment ecosystem For Banks and Asset Managers… …and Corporate Treasury Teams ® Forecasting Investing SAAS platform for liquidity investment $237bn average MMF assets across ® g Investing 15+ platform clients, including Partner Buy 5 of the 10 largest U.S. banks
Slide 103: BlackRock's scale benefits
BlackRock’s scale benefits include access to supply, capacity to grow share and ability to accommodate large flows with liquidity 103
Slide 104: Access in times of limited supply
BlackRock’s scale benefits Access in times of limited supply 8 Supply of Money Market 6 Instruments ($tn) Liquidity Access 4 2 0 2013 2014 2015 2016 2017 Risk Management Experience Reverse Repo Certificates of Deposit Corporates Asset-Backed Commercial Paper Non-Financial Commercial Paper Foreign Fi
Slide 105: Global customized solutions
Diverse client base… Global customized solutions1 Corporations Pensions Banks Insurance Official institutions Asset managers 8% 10% Family offices Endowments / Hedge funds 11% 9% 31% foundations Money Separate Individual Intermediaries Clearing houses Market Accounts investors Funds In multiple curr
Slide 106: Disciplined credit and risk management; state of the art platform
Disciplined credit and risk management State of the art platform Over 5,000 stress tests run weekly, and Performance & Credit, Risk ~150 daily for cash through scaled Attribution Analytics & Stress Testing Aladdin® analytics platform 17 years average PM tenure Operations / Reporting Portfolio Insigh
Slide 107: Cash is a commodity. Our Cash Management business is not.
Cash is a commodity. Our Cash Management business is not. 107
Slide 108: Deliver data-driven technology; grow and leverage scale
1 ® Deliver transformative, data-driven technology 2 Grow and leverage our scale Position global platform to 3 enable customized client solutions underpinned by liquidity, Platform transparency and risk management 108
Slide 109: Targeting Outcomes Through Portfolio Construction
TARGETING OUTCOMES THROUGH PORTFOLIO CONSTRUCTION Rich Kushel Head of Multi Asset Strategies and Global Fixed Income Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Da
Slide 110: Client demand is driving outsourcing of portfolio construction
Client demand is driving outsourcing of portfolio construction and asset allocation US OCIO US Managed Accounts European Sub-Advisory in $billions in $billions in $billions US OCIO US Managed Accounts European Sub-Advisory $1,435 $8,0 $8,01212 $724 $72 4 $55 $5,3 $551 1 $982 $5,33838 13% 14% 10% CAG
Slide 111: Natural tension between objectives and risk
Natural tension between Today, the 2015 objectives and risk allocation is expected to return Asset allocation needed to potentially earn 7.5%1 6%2 Private Equity Real Estate Non-US Equity 100% US Small Cap 52% US Large Cap 12% 12% Bonds 1995 2005 2015 BII CMA Hypothetical Return 7.5% 7.5% 7.5% 6.0%
Slide 112: BlackRock is defining the next generation of portfolio construction
BlackRock is defining the next generation Portfolio of portfolio construction construction at BlackRock to help meet a wide range of client demands 112
Slide 113: Client objectives and client portfolio
Security CLIENT OBJECTIVES selection CLIENT PORTFOLIO Dynamic Long-term allocation market exposures and additional Strategic tilts sources of return Long-term market exposures 113
Slide 114: Focusing on risk of portfolios
Focusing on risk of portfolios Alpha with high quality investment building blocks Index + can help investors achieve Cash Factors better outcomes 114
Slide 115: Superior client experience and delivery of outcomes
Superior client experience and delivery of outcomes BlackRock Clients & Relationship Managers Client Inquiry Management Investment Teams Active Equity Institutional Active Fixed Income Client Portfolio Solutions Multi-Asset Retail Single point of contact for portfolio construction ETF and Index and
Slide 116: From bespoke and customized to fully scalable solutions
From bespoke and customized to fully scalable solutions To highly scalable portfolio From highly customized portfolio construction solutions for our construction solutions for distribution partners to provide institutions to individual investors Customized Example: Scalable Example: Institutional cl
Slide 117: Portfolio construction is driving value for clients and growth
Portfolio construction is driving value for clients and growth for BlackRock 1 Portfolio construction and asset allocation outsourcing is one of the fastest-growing areas within our industry 2 BlackRock’s differentiators position us to focus on client outcomes through whole-portfolio engagements 3 T
Slide 118: Commitment to Being Local for Our Clients
COMMITMENT TO BEING LOCAL FOR OUR CLIENTS Rob Kapito President Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Day slide deck, which are incorporated herein by referen
Slide 119: BlackRock serves a range of clients
Cash Retail / BlackRock Wealth 10% 7% serves a range of clients Institutional iShares 55% 28% Institutions, like pensions, insurers and foundations Retail wealth management partners, who ultimately serve individuals GLOBAL AUM BY CLIENT TYPE Source: BlackRock. AUM as of 3/31/18. 119
Slide 120: We're organized across three major regions
Regulatory Change Client Preferences Distribution Models We’re organized across Markets three major regions AMERICAS | EMEA | APAC to better serve our clients at a local level BETTER CLIENT RELATIONSHIPS 120
Slide 121: Global client base
Global client base Americas EMEA APAC 64% of AUM 28% of AUM 8% of AUM 47% Institutional 64% Institutional 88% Institutional 34% iShares 21% iShares 8% iShares 11% Retail/Wealth 9% Retail/Wealth 3% Retail/Wealth 8% Cash 6% Cash 1% Cash Source: BlackRock. AUM as of 3/31/18. Regional iShares amounts ba
Slide 122: Deliver global capabilities locally
Our goal is to deliver the best of BlackRock’s global capabilities, locally OPPORTUNITY FOR GROWTH ACROSS REGIONS 1 investment platform, research and expertise AMERICAS 8% market share 2 benefits of scale EMEA 6% market share APAC 3% market share 3 leadership, talent and culture 4 Aladdin® and digit
Slide 123: Growth and Innovation in BlackRock's Largest Region
GROWTH AND INNOVATION IN BLACKROCK’S LARGEST REGION Mark McCombe Head of the Americas Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Day slide deck, which are incorpo
Slide 124: BlackRock Americas: Regional overview
BlackRock Americas: Regional overview % of AUM Breakdown BLK Total $4.1tn 8% 64% Total AUM 11% Toronto Montreal Seattle Boston San New York 47% Francisco Princeton Wilmington Miami 34% Mexico City $8.8bn 65% Bogota 2017 Revenue Lima Sao Paulo Institutional (47%) iShares (34%) Santiago ~7,300 Retail/
Slide 125: BlackRock is at the forefront of industry transformation
Differentiated Platform Top 10 player in major growth segments1 BlackRock is at the Diversified Footprint Serving clients in 29 countries2 forefront of industry transformation #1 ETF manager by AUM3 1 Source: Simfund; Data as of 8/31/17; Top 10 player in AUM; Major growth segments defined as Non-ETF
Slide 126: Americas institutional assets of $2.2tn
Americas Insurance AUM $159bn institutional assets of $2.2tn Retirement AUM Serving diverse $1.4tn client types Cash Management Retirement (DB, DC) Insurance Official Institutions Endowment / Foundations Banks / Corporates / Other Source: BlackRock; AUM as of 3/31/18 126
Slide 127: Retirement is a long-term initiative
Retirement is #1 US “investment-only” DC (“DCIO”) provider1 a long-term initiative for BlackRock products are used BlackRock in over 60,000 DC plans Reaching 15 million participants An opportunity and an obligation Pioneered target date in 1993 with LifePath® 1 Source: P&I; DCIO rankings by AUM as o
Slide 128: A quiet revolution in the U.S. wealth industry
A quiet revolution is taking place in the U.S. wealth industry 128
Slide 129: Three accelerating trends
Three accelerating trends Growing retirement Fee-based Advisor 1 income gaps 2 asset growth 3 ‘capacity crisis’ Retirement Income Gap in $trillions $5.7 Advisor Activity2 Example assumes $1M retirement savings and annual retirement income $20 goal of $100k1 $2.1 $1.0 Retirement $0.3 Estimated annual
Slide 130: Expanding our sales reach with scale
Expanding our Sales reach with Scale $28tn U.S. Wealth Market AUM (Including ETFs) $8tn $7tn $6tn $4tn $3tn Wire Independent RIA Private Bank Direct 2016 Industry AUM Growth1 (Includes beta) 6% 7% 7% 4% 11% BLK 2016 Organic AUM Growth2 8% 19% 9% 9% 14% BLK AUM Rank3 #1 Top 5 Top 5 Top 5 Top 3 Note:
Slide 131: Delivering insight and solutions through world-class expertise
Delivering insight and solutions through world-class expertise 131
Slide 132: Serving institutions with capabilities beyond asset management
Retirement Serving Plans (DB/DC) Investment Aladdin® Cash Management Management/ institutions with Securities Corporations Lending capabilities BlackRock Institutional beyond asset Clients management Financial Client Transition Markets Portfolio Management Advisory Solutions 132
Slide 133: Financial Institutions Group Peer Risk Study Powered by Aladdin
Financial Institutions Group Peer Risk Study Powered by Aladdin Aladdin power… …delivering unique insights for clients How much investment risk are you really taking? Are you getting compensated for that risk? +500 companies Asset Class (%) Asset Allocation Peer Average vs. Avg P&C Industry vs. Indu
Slide 134: Investing in new and growing markets
Investing in new and growing markets 134
Slide 135: BlackRock Mexico
Leading distribution through Citibanamex partnership1 51% 150+ BlackRock Mexico: Employees $62bn AUM 268 Bringing global ETFs 49% 50+ capabilities to Retail/Wealth Institutional Mutual Funds a local market BlackRock believes in the Mexican market 91% Mutual Fund AUM (% of GDP)2 51% 53% 38% 9% 11% Me
Slide 136: The Americas will continue to drive growth
The Americas will continue to drive growth by evolving, innovating and investing 136
Slide 137: Unlocking the Next Wave of Growth in EMEA
UNLOCKING THE NEXT WAVE OF GROWTH IN EMEA Rachel Lord Head of Europe, Middle East and Africa Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Day slide deck, which are
Slide 138: EMEA region overview
EMEA region overview % of BLK AUM Breakdown Regional Headquarters Regional Offices Total 6% $1.8tn 28% 9% Institutional (64%) Stockholm Total AUM iShares®(21%) 21% Edinburgh Copenhagen 64% Retail (9%) Dublin Amsterdam London Frankfurt $4.1bn 30% Cash (6%) Brussels Munich Lux Vienna 2017 Revenue Pari
Slide 139: Outpacing the broader industry
Outpacing the broader industry EMEA Region Continental Europe (CE)1 Long-term $49 Long-term 8% organic base billion net inflows fee growth 12% Expanded presence in CE: 2012 2017 6% 7% Revenue 51% 58% 4% 3% 4% share of EMEA region 2% 2% Note: Revenue represents full year 2012 and 2017. iShares revenu
Slide 140: The EMEA distribution business is changing rapidly
The EMEA distribution business is changing rapidly 140
Slide 141: Three regional forces are impacting clients
Three regional forces are impacting clients 1 Brexit & EU 27 Fragmentation 2 MiFID II impact on distribution 3 Persistently low rates Populism/uncertainty Requirement to ‘prove’ value for money Local investors are starved for yield Suitability 2.8% 10-year Treasury Cost Transparency Inducement Clien
Slide 142: BlackRock is uniquely positioned to increase share
BlackRock is uniquely positioned to increase share in this environment 142
Slide 143: Sizing the opportunity in priority markets
Sizing the opportunity in priority markets Market BLK Market BLK Market BLK Market BLK #6 #10 #5 #2 Wealth $1.1tn $0.5tn $0.8tn $1.0tn 3% 3% 4% 3% SHARE SHARE SHARE SHARE #15 #18 #9 #6 Institutional $1.7tn $2.5tn $0.7tn $1.2tn 1% <1% 3% 6% SHARE SHARE SHARE SHARE Priority countries are expected to d
Slide 144: Unlocking distribution through an ecosystem of scale
Unlocking distribution through an ecosystem of scale Client partnership models Technology properties Sales enablement tools Bespoke Solutions Sales Solutions Sales automation Data-driven Sub-Advised decisions White Label ARWM Product suites Funds ® Empowering sales Guided Fund Sales Architecture Ope
Slide 145: Local distribution and regulatory changes are opportunities
Local distribution and regulatory changes are opportunities for BlackRock to leverage scale 145
Slide 146: MiFID II positioning
Non-retrocession paying MiFID II positioning share classes CASE STUDY: Customizable multi-asset CORE ALPHA-SEEKING FUNDS solutions Portfolio analytics to support suitability requirements Performance Alpha-seeking portfolio at a building blocks reasonable price Note: Funds not offered in jurisdiction
Slide 147: Building local centers of excellence
Building local centers of excellence 1 Country Chairmen and local Chief Investment Strategists Investing for growth 2 Saudi Arabia AM license Resource reallocation 3 Technology and innovation hubs Creating scale 4 Regulatory synergies 147
Slide 148: We have the platform and local talent to achieve our aspiration
We have the platform and local talent to achieve our aspiration 148
Slide 149: Global Leader and Local Champion in Asia Pacific
GLOBAL LEADER AND LOCAL CHAMPION IN ASIA PACIFIC Ryan Stork Chairman of Asia Pacific Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Day slide deck, which are incorpor
Slide 150: BlackRock Asia Pacific: External reporting view
BlackRock Asia Pacific: External reporting view % of BLK total AUM breakdown Beijing Seoul $0.5tn Tokyo Gurgaon Shanghai 1% 3% Institutional (88%) 8% 8% Taipei Retail / Wealth (8%) Mumbai Hong Kong Total AUM 88% iShares ® (3%) Bengaluru Cash (1%) Singapore $0.7bn 5% 2017 Revenue Japan (59%) 4% 2% 4%
Slide 151: BlackRock Asia Pacific: Client reporting view
BlackRock Asia Pacific: Client reporting view Including APAC clients invested in US – and European – Listed iShares® ETFs AUM breakdown Beijing Seoul $0.5tn $0.6tn Tokyo Gurgaon Shanghai 1% Institutional (71%) Taipei Retail / Wealth (9%) Mumbai Hong Kong Total AUM Total AUM 20% 71% iShares ® (20%) B
Slide 152: Diversified revenue growth in Asia Pacific
Diversified revenue growth in Asia Pacific APAC revenue by asset class ($mm)1 Key themes driving growth 2 $1,202 YoY Local manufacturing Growth Local flagship equity and fixed income funds 2 $986 Equity +11% Launch of Asian private credit fund ETFs +15% Fixed Income Fixed income iShares ® (esp
Slide 153: Long-term trends driving growth & change in the region
Long-term trends driving growth & change in the region Region with most tech adoption Expected to be the wealthiest region 1 Number of mobile subscriptions (millions) Private financial wealth ($tn), CAGR % (2016-2021E) 4,738 Technology APAC 2016 Americas 1,070 +8% +6% 2021E Europe 1,010 77.8 2 Afric
Slide 154: Accessibility and growth vary by market
Accessibility and growth vary by market Total market Est. % of AUM AUM1 ($bn), managed by 2017E foreign AMCs2 Key themes driving growth Large & developed Japan 4,509 16% Aging population and pension markets with open reforms access for global Shift from saving to investing; and players Australia
Slide 155: Evolving capabilities and services
Evolving capabilities and services Leverage BlackRock’s breadth #1 cross-border ETF provider in APAC1 1 in cross-border funds at scale #2 out of 54 cross-border mutual fund providers in APAC1 2 Expand digital offerings Aladdin for Wealth iRetire Fund Buyer Portal $277 Augment local investment 3 capa
Slide 156: Leveraging global scale and local strengths
Breadth of Platform Technology Leveraging our Local Capabilities global scale and local Trusted Advisor strengths to engage with clients in deep CLIENT and transformative way OUTCOMES 156
Slide 157: Official institution client
Official institution client “One BlackRock” partnership as a trusted advisor Client needs Solutions Outcome BlackRock’s global expertise Evolve governance framework? Built deeper relationship Factor-based strategies as a trusted advisor Index equity FoHFs CLOs GILB MBS Knowledge transfer on Client C
Slide 158: Wealth Client
Wealth Client Leverage global capabilities to meet local clients’ needs Client needs Solutions Outcome High regular income Raised $1.4bn into the multi asset income strategy from Active client Diversification into the Bank at launch engagement non-traditional income sources Private Bank Subsequently
Slide 159: Investing in local talent in Asia Pacific
Investing in local talent to differentiate BlackRock in Asia Pacific’s developed markets and build our presence in growth markets 159
Slide 160: Digitally-Enabled Wealth Distribution
DIGITALLY-ENABLED WEALTH DISTRIBUTION Salim Ramji Head of U.S. Wealth Advisory Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Day slide deck, which are incorporated h
Slide 161: Digital is amplifying the quiet revolution in wealth
Digital is amplifying the quiet revolution in wealth Alpha Index + Factors Cash Advisors are building Model portfolios can Clients want help millions of portfolios customize at scale moving to fee-based 161
Slide 162: Digital is enabling us to deliver BlackRock
Digital is enabling us to deliver BlackRock From bottlenecks… …to a digital ecosystem Separately iCapital iRetire Managed Accounts Cash Alternatives Aladdin® iShares Wealth Fixed Managed Income Future Models Active Advisor Direct Fixed Advisor Income Active Platforms Center Equity Portfolio Factors
Slide 163: Execution priorities
Execution priorities Make Alpha Scale Reach Aladdin® and customize and teach the language Index + Factors model portfolios using wealth of portfolio Cash Digital Wealth advisors construction Extend Aladdin® Wealth Expand Digital Wealth Help advisors transition to relationships globally partnerships
Slide 164: Make Aladdin the language of portfolio construction
Make Aladdin® the language of portfolio construction Benefits to U.S. advisors and investors Benefits to BlackRock % of portfolio engagements that increase share3 Improved upside / Reduced downside capture portfolio costs Alpha Index + Cash Factors 65% 4x increase in #1 rank from advisors investor s
Slide 165: Aladdin Wealth in Japan Demo
Aladdin Wealth in Japan Demo 165
Slide 166: Scale and customize model portfolios using Digital Wealth
Scale and customize model portfolios using Digital Wealth Advisors are using model BlackRock’s Digital Wealth solutions portfolios to scale their practices and partnerships U.S. Model Portfolio Landscape (by assets)1 >$2tn ~$500bn ~$150bn Asset Manager Wealth Manager Advisor-Customized Model Portfol
Slide 167: Advisor Center Demo
Advisor C enter Demo fom i Help Optimize Explore Model Compare Against Your Portfolio Portfolios Your Peers | Examine your portfolio across a number ‘Streamline your investment process by ‘See how your portfolio stacks up against i cf dmensors ord immadtely so tre Using aed! 2 you base Then, ‘he mve
Slide 168: Reach and teach wealth advisors
Reach and teach wealth advisors Technology-enabled More than doubled our reach market teams to U.S. Wealth Advisors Targeted Personalized, engagement digitally-enabled using data execution sciences 90k 40k Expanded advisor reach through virtual sales 2015 2017 Source: Proprietary BlackRock Digital W
Slide 169: Scale advantages from digital
Scale advantages from digital U.S. Portfolio U.S. advisor access to U.S. advisor engagements1 Digital Wealth solutions2 engagements2 80k 1mm 500k 10k 4k 2k 2015 2017 2020E 2015 2017 2020E 2015 2017 2020E 1 Proprietary BlackRock Portfolio Solutions Data, March 2018 2 Proprietary BlackRock Digital Wea
Slide 170: Digital is enabling us to customize at scale
Digital is enabling us to customize at scale… …earning more business from more wealth managers than any firm 170
Slide 171: BlackRock: Investing for the Future
BLACKROCK: INVESTING FOR THE FUTURE Gary Shedlin Chief Financial Officer Please carefully review the Forward-looking Statements, Important Note, Performance Notes and other disclosures included at pp. 2-3 and 203-207 of the BlackRock, Inc. 2018 Investor Day slide deck, which are incorporated herein
Slide 172: Important Note
Important Note As indicated in this presentation, certain financial information reflects previously reported amounts and does not reflect the recast related to the adoption of the new revenue recognition standard. For further information, refer to the Current Report on Form 8-K furnished on March 22
Slide 173: Shareholder value framework
Shareholder value framework Organic Growth Operating Capital Leverage Management EPS Growth 185
Slide 174: Organic growth
Organic Growth Organic growth Average 12/31/2012 – 12/31/2017 4% organic asset growth and 5% organic base fee growth 5% 4% Organic Organic base asset growth fee growth Note: Information above reflects previously reported amounts and does not reflect the recast related to the adoption of the new reve
Slide 175: Organic asset growth higher and less volatile than peers
Organic asset growth higher and less volatile than peers Organic Asset Growth Standard deviation 4% 6% 6% 4% 5% 2% 2% 3% 2% 3% 3% 2% 3% 0% (0%) (0%) (2%) BLK Industry A B C D E F G BLK A B C D E F G Represents the average of BlackRock’s 7 largest US publicly traded traditional asset management peers
Slide 176: While fee rate has declined…
While fee rate has declined… Note: Information above reflects previously reported amounts and does not reflect the recast related to the adoption of the new revenue recognition standard. For further information, refer to the Current Report on Form 8-K furnished on March 22, 2018 as well as previousl
Slide 177: …organic base fee growth remains strong
…organic base fee growth remains strong 7% 6% 6% 6% 5% 5% 5% 5% Organic Base Net Organic Base 1% Fee Growth Rate Fee Growth Rate 0% 2013 2014 2015 2016 2017 Note: Information above reflects previously reported amounts and does not reflect the recast related to the adoption of the new revenue recogni
Slide 178: Operating leverage
Operating leverage Operating Organic Growth margin, as adjusted Optimizing organic growth in the 44.1% most efficient way possible 40.4% +370 BPS 2012 2017 Note: Information above reflects previously reported amounts and does not reflect the recast related to the adoption of the new revenue recognit
Slide 179: Driving expense leverage across the firm
Driving expense leverage across the firm General & Administration Compensation, as adjusted / (“G&A”) Expense, as adjusted Revenue / Revenue 34.9% 33.9% (100) BPS 14.3% (260) 11.7% BPS 2012 2017 2012 2017 Note: Information above reflects previously reported amounts and does not reflect the recast re
Slide 180: G&A investments are concentrated in technology and data
G&A investments are concentrated in technology and data G&A Expense, as adjusted ($mm) $1,462 $1,337 +2% 2012 – 2017 CAGR CAGR Technology & Data +6% Other 0% 2012 2017 Note: Information above reflects previously reported amounts and does not reflect the recast related to the adoption of the new reve
Slide 181: Our first priority remains to invest in our business
Our first priority remains to invest in our business We invest to drive future growth and to improve our operational infrastructure • Human capital Inorganic Organic • Seed and co-investments • Tactical Acquisitions • Minority Investments 193
Slide 182: Technology is reshaping our human capital investment
Technology is reshaping our human capital investment +10% +6% CAGR CAGR $6.3 14,000 AUM Employees 10,500 $3.8 Technology & Data Roles 24% 27% ($tn) 76% 73% Rest of the organization 2012 3/31/18 % of Employees in 6% 12% Innovation Centers Note: Innovation centers include Gurgaon, Mumbai, Bangalore an
Slide 183: Seeding funds has driven significant revenue growth
Seeding funds Economic seed portfolio ($bn) has driven significant $0.4 $1.3 revenue growth Revenues from seeded funds ($mm) $814 $40 2012 2017 Note: Revenues from products that have received seed investments over $1m in 2009 through 2017. 195
Slide 184: Inorganic investments accelerate growth
Inorganic investments accelerate growth and support strategic initiatives Tactical acquisitions Strategic minority investments Energy Infrastructure ® ® Asset Management 196
Slide 185: Capital Management
Capital Management Return excess cash to shareholders through dividends and a consistent and predictable share repurchase program $2.8 billion returned to shareholders in 2017 197
Slide 186: Steady dividend increases
Steady dividend increases +25% +25% +20% +20% vs. +20% CAGR since vs. 2017 vs. 2017 2017 CAGR inception in since 2003 inception in 2003 $12.02 $12.52 $10.00 Dividends per share 2017 2H18 2018P Annualized Note: Subject to market conditions, we expect to seek Board approval in July to increase our qua
Slide 187: Consistent share repurchases
Consistent share repurchases 171mm shares 12/31/12 161mm $5.3bn repurchased shares 12/31/17 $337 average price per share (6%) share count reduction 199
Slide 188: Strategic differentiators are driving long-term shareholder value
BlackRock’s strategic differentiators are driving long-term shareholder value Technology & Scale Global & Local Distribution Investment Platform Organic Growth Operating Capital Leverage Management EPS Growth Culture & Talent 200
Slide 189: Appendix
Appendix 201
Slide 190: Reconciliation between GAAP and as adjusted
Reconciliation between GAAP and as adjusted ($in millions) 2012 2017 Operating Income GAAP $3,524 $5,272 Non-GAAP expense adjustments1 50 15 As Adjusted 3,574 5,287 Closed-end fund launch costs and commissions 25 0 Operating income used for operating margin measurement 3,599 5,287 Revenue GAAP 9,337
Slide 191: Performance Notes
Performance Notes Past performance is not indicative of future results. Except as specified, the performance information shown is as of March 31, 2018 and is based on preliminary data available at that time. The performance data shown reflects information for all actively and passively managed equit
Slide 192: Long-Term Capital Market Assumption Disclosures
BlackRock’s Long-Term Capital Market Assumption Disclosures This information is not intended as a recommendation to invest in any particular asset class or strategy or product or as a promise of future performance. Note that these asset class assumptions are passive, and do not consider the impact o
Slide 193: Important information regarding iShares ETFs
Important information regarding iShares ETFs Carefully consider the iShares Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained by vi
Slide 194: Important information regarding iShares ETFs
Important information regarding iShares ETFs The iShares ETFs upon which certain of the new iBoxx ETF Indexes (“the Indices”) are based, are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”). BlackRock does not make any warranty regarding the Indices. This materia
Slide 195: Important Notes
Important Notes The opinions expressed herein are as of June 2018 and are subject to change at any time due to changes in the market, the economic or regulatory environment or for other reasons. The information should not be construed as research or relied upon in making investment decisions or be u
Slide 196: Investor Day 2018
INVESTOR DAY 2018