Good morning. My name is Jerome, I will be your conference specialist leader today. At this time, I would like to welcome everyone to the BlackRock, Incorporated Second Quarter 2021 Earnings Teleconference. Our host for today's call will be Chairman and Chief Executive Officer Laurence D. Fink, Chief Financial Officer Gary S. Shedlin, President Robert S. Kapito, and General Counsel Christopher J. Meade. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Mr. Meade, you may begin your conference. Thank you. Good morning, everyone. I'm Chris Meade, the General Counsel of BlackRock. Before we begin, I'd like to remind you that during the course of this call, we may make a number of forward-looking statements. We call your attention to the fact that BlackRock's actual results may, of course, differ from these statements. As you know, BlackRock has filed reports with the SEC, which list 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 statements. With that, I'll turn it over to Gary. Thank you, Chris, and good morning, everyone. It's my pleasure to present results for the second quarter of 2021. Before I turn it over to Larry to offer his comments, I'll review our financial performance and business results. While our earnings release discloses both GAAP and as adjusted financial results, I will be focusing primarily on our as adjusted results. Last month at our 2021 Investor Day, we highlighted how the investments we have consistently made to support growth have enabled us to execute on our framework for shareholder value. We have invested and evolved over time to create a globally integrated investment and technology platform that enables clients to construct resilient whole portfolios that meet their objectives regardless of market environment or risk appetite. We continue to invest in our industry-leading high-growth franchises such as ETFs, private markets and technology, and are accelerating investments to drive growth in our ESG, traditional active, and solutions capabilities. The combination of our comprehensive and integrated investment platform with global and local distribution capabilities once again delivered strong results for the quarter, and we remain very well positioned to continue delivering differentiated organic growth in the future. BlackRock generated total net inflows of $81 billion in the second quarter, representing 4% annualized organic asset growth. As previously disclosed, second quarter net inflows included the full impact of a $58 billion low-fee institutional index redemption from a large U.S. public pension client. Strong net inflows from ETFs and our entire active franchise once again contributed to this quarter's robust 10% annualized organic base fee growth. Over the last 12 months, BlackRock's platform pairing diverse investment capabilities with best-in-class technology and rigorous risk management has generated over $500 billion of total net inflows, representing 13% organic base fee growth well in excess of our 5% long-term target. Second quarter revenue of $4.8 billion increased 32% year-over-year, and operating income of $1.9 billion rose 37%. Earnings per share of $10.03 was up 28%, also reflecting lower non-operating income and a higher effective tax rate compared to a year ago. Strong year-over-year comparisons benefited in part from significant improvements in equity market conditions versus a year ago. Non-operating results for the quarter included $145 million of net investment income, primarily driven by mark-to-market gains in our private equity co-investment and unhedged seed capital portfolios. Our as adjusted tax rate for the second quarter was approximately 24%. We now estimate that 24% is a reasonable projected tax run rate for the remainder of 2021, primarily reflecting an increase in certain state tax rates, though the actual effective tax rate may differ as a consequence of non-recurring or discrete items or potential changes in tax legislation during the year. Second quarter base fee and securities lending revenue of $3.8 billion was up 27% year-over-year, primarily driven by the positive impact of market beta on average AUM and strong organic base fee growth, partially offset by higher discretionary money market fee waivers, lower securities lending revenue, and strategic pricing investments over the last year. Sequentially, base fee and securities lending revenue was up 5%. Our effective fee rate was down 0.3 basis points as strong organic base fee growth, driven by our higher fee active businesses and the impact of one additional day in the current quarter, were more than offset by higher discretionary money market fee waivers and the impact of divergent equity beta in the quarter. During the second quarter, we incurred approximately $165 million of gross discretionary yield support waivers, driven in part by continued strong flows into our U.S. government money market funds. The Fed's recent technical adjustments to the IOER and RRP have modestly helped, we still expect discretionary fee waivers to persist at or around current levels for the near term. However, future levels of discretionary fee waivers may also be impacted by several additional factors, including the level of AUM in funds with existing waivers, gross yields, and competitive positioning. Performance fees of $340 million were up significantly from a year-ago, reflecting strong performance across our entire investment platform, including liquid and illiquid alternatives and long-only strategies. Quarterly technology services revenue increased 14% from a year-ago, while annual contract value, or ACV, increased 16% year-over-year and continued to reflect strong growth from the second quarter of 2020, which was impacted by slower sales and extended contracting in the early days of the pandemic. We remain committed to low-to-mid-teens growth in ACV over the long term. Total expense increased 29% versus the year-ago quarter, driven primarily by higher compensation, direct fund, and G&A expense. Employee compensation and benefit expense was up 34%, primarily reflecting higher incentive compensation driven by higher operating income and performance fees, and higher deferred compensation, reflecting the impact of additional grants associated with prior year compensation and certain compensation arrangements related to a previous acquisition. Direct fund expense increased 30% year-over-year, primarily reflecting higher average index AUM. G&A expense was up $73 million or 19% year-over-year, primarily driven by higher technology, portfolio services, and marketing spend. Sequentially, G&A expense was down $124 million, reflecting the impact of approximately $80 million of product launch costs incurred in the first quarter, partially offset by higher technology and marketing spend. Intangible amortization expense increased $10 million year-over-year as a result of our Aperio acquisition. Our second quarter as adjusted operating margin of 44.9%, up 120 basis points from a year ago, benefiting in part from significant equity market improvements over the last year. BlackRock has never been better positioned to take advantage of the opportunities before us, and we remain committed to optimizing organic growth in the most efficient way possible. Our capital management strategy remains first to invest in our business, including through prudent use of our balance sheet, and then to return excess cash to shareholders. We see the opportunity to make Aladdin the language of all portfolios and are investing to evolve Aladdin for its next leg of growth. As Larry will discuss in more detail, during the quarter, we announced a partnership with Baringa, including the acquisition of their industry-leading climate change scenario model, which will enhance Aladdin Climate's capabilities and set a new standard for climate analytics. In addition, yesterday we announced a minority investment in SpiderRock Advisors, a tech-enabled asset manager focused on providing professionally managed option overlay strategies. This investment adds incremental product capabilities to our recent acquisition of Aperio and extends our market-leading personalized SMA franchise. We also repurchased an additional $300 million worth of shares in the second quarter and stand by previous guidance as it relates to share repurchases for the remainder of the year. As we discussed in Investor Day, our strong and resilient platform has never been better positioned to deliver for clients as we leverage our scale, unique insights, and solutions orientation to meet their long-term investment needs. Quarterly net inflows of $81 billion reflect the continued momentum across our entire investment business, especially in our ETF and active platforms. Our ETFs generated net inflows of $75 billion in the second quarter, representing 11% annualized organic asset and base fee growth. We also crossed $3 trillion in assets globally for the first time. Core equity and higher fee precision ETFs continued to generate strong inflows, particularly in international equities. However, most of our growth this quarter came from the strategic category, led by continued strength in our sustainable ETFs and renewed strength in fixed income, as well as steady positive flows into factor and thematic ETFs. Retail net inflows of $21 billion, representing 9% annualized organic asset growth and 10% annualized organic base fee growth, were positive in both the U.S. and internationally and across all major asset classes. Inflows continue to reflect broad-based strength across the entirety of our active platform, and we remain well positioned to capture demand for both active equities and investor appetite for yield, where our diversified fixed income range, including unconstrained, high yield, international, and broad market strategies, is equipped to meet client demand in any rate environment. BlackRock's institutional active net inflows of $43 billion were led by $35 billion of multi-asset net inflows, largely driven by a significant outsourced CIO mandate from a U.K. pension client. As Larry will also discuss, BlackRock is uniquely positioned to deliver customized whole portfolio solutions by capitalizing on our global scale, expertise in investment technology and risk management, and focus on sustainability. During the second quarter, we also saw continued demand for active fixed income and illiquid alternatives and LifePath target date offerings. Institutional index net outflows of $80 billion were impacted by the previously mentioned single client redemption during the quarter. Outflows from index equities were partially offset by inflows into fixed income as clients rebalanced portfolios after significant equity market gains or sought to immunize portfolios through LDI strategies. Despite overall asset net outflows across BlackRock's institutional franchise for the quarter, annualized organic base fee growth was 6%, as net inflows into higher fee active and alternative strategies more than offset the de minimis base fee impact of low fee index equity outflows. Overall, BlackRock generated approximately $63 billion in quarterly active net flows across the platform, notching our ninth consecutive quarter of positive active equity flows. Demand for alternatives also continued, with nearly $7 billion of net inflows into liquid and illiquid alternative strategies during the quarter, driven by single strategy hedge funds, fund of hedge fund solutions, real assets, private credit, and private equity solutions. We have approximately $31 billion of committed capital to deploy for institutional clients in a variety of alternative strategies, representing a significant source of future base and performance fees. Finally, BlackRock's cash management platform continued to grow, generating $23 billion of net inflows in the second quarter, driven by both prime and U.S. government money market funds. Despite facing near zero returns in both the U.S. and Europe, client demand for cash strategies remains strong given significant liquidity in the financial system, and by helping clients manage their cash, we are building broader and deeper strategic relationships. Our continued strong performance is a direct result of a thoughtful growth strategy that has been well executed by a talented group of purpose-driven employees who live the One BlackRock culture each day. We are thankful for their tremendous effort and contributions to our success over these last 18 months. We will continue to embrace change and invest responsibly for the future so that we can meet the needs of all of our stakeholders. With that, I'll turn it over to Larry. Thank you, Gary. Good morning, everyone, and thank you for joining the call. We are once again reporting earnings today from our headquarters in New York City, and I'm happy to see more and more of our colleagues in the office in recent weeks, and I remain cautiously optimistic for a gradual return to having people back in the office and a little normalcy. After more than a year of virtual meetings, I spent the last few weeks meeting with clients in person again. I also spoke at the G20 in Venice on Sunday about sustainability and climate change, and it was great to be back on the road. Our business is built on listening to the people we serve and understanding their needs, and there's no substitute for meeting face-to-face with people to hear directly from them about their investment challenges, their opportunities, and what lies ahead for them. It is through these conversations that we're able to build a deeper relationship with our clients across their whole portfolio and to ensure BlackRock is always evolving and staying current and staying in front of their needs. This longstanding client-centric approach is powering consistently strong results for the benefit of all our stakeholders. Total net inflows of $81 billion in the second quarter, representing a 10% organic base fee growth were driven by continued momentum in strategic growth areas. We saw client demand in our ETFs and illiquid alternatives, our active and sustainable strategies, as well as our scaled cash management solutions. We developed 14% year-over-year growth in technology services revenues as clients increasingly turn to Aladdin. We have now delivered organic base fee growth in excess of our 5% target for five consecutive quarters, including 13% over the last 12 months from over $500 billion of net inflows. This is driving strong financial performance, and I'm very confident that we have significant room to grow as we are partnering with more clients on larger and more comprehensive mandates than ever before in our history. The global economic restart continues to broaden in the second quarter as vaccinations were rolled out and some countries are gradually reopening. With significant amounts of cash still on the sidelines, markets are anticipating continued growth near term, despite the potential for various restrictions in certain countries due to the variant. We have seen equity markets rally year-to-date, with most indexes up over 10% for the first half of the year and hitting record highs. We look ahead to the remainder of the year and beyond. Inflation concerns top of mind for investors who need to assess the potential impact on their portfolios. Debate remains as to whether this inflation will be transitory or structural, and central banks will need to balance their monetary policy decisions alongside expansive fiscal policy by so many governments. In this environment, clients are looking for scaled partners who have a deeper understanding of the global picture and a platform that can construct portfolios tailored for their needs and for their future goals. They are turning to BlackRock to help them navigate uncertainty, they're turning to BlackRock to invest more opportunistically, and they're turning BlackRock to help them plan for their future. Our deliberate investment over many years to build a resilient and scaled asset management and technology platform is helping them in their needs, and we are delivering for them. Building on what we laid out at Investor Day last month, we remain focused on consistently improving and investing ahead of our clients' needs in the biggest growth areas of the future. In ETFs, the benefit of our investments over time are showing up through accelerated momentum across the franchise. In June, client assets in our ETFs passed $3 trillion globally, driven by second quarter net inflows of $75 billion. It took 15 years for iShares to get to $1 trillion in assets. It took iShares only five years to get to $2 trillion in assets, and it just most recently took iShares only two years to get to $3 trillion. Importantly, the majority of this growth at each milestone has been organic as more investors are using ETFs in more ways. They are using to build whole portfolios, are using iShares to invest beyond traditional market cap weighted indexes, and they're using iShares more than ever before to access the bond markets efficiently. Our ETFs grew across each of our core, our strategic and precision product categories, with more than half of our net inflows coming from our strategic categories led by fixed income and sustainable ETFs. We saw more than $22 billion of net inflows into our fixed income ETFs as investors sought more efficient ways to access fixed income and turned to us for a more broad range exposure, including Chinese bonds, multi-sector, municipal bonds, inflation-linked ETFs. We now manage more than $700 billion in fixed income ETFs and continue to believe that this category will grow to $1 trillion by 2024 as fixed income ETFs modernize the $100 trillion bond market. Momentum in sustainable ETFs remains strong with another $14 billion of net inflows in the second quarter, including the launches of our Low Carbon Transition readiness ETF. We have seen $40 billion in net inflows into sustainable ETFs in the first half of 2021, compared to $46 billion in all of 2020. With nearly $120 billion of sustainable ETFs, BlackRock is 4x the size of the next sustainable ETF player, and we are incredibly well-positioned for the future, for our clients' needs in this fast-growing category. Demand for sustainable strategies is accelerating from investors worldwide in both index and active. Within active sustainable strategies, we saw $4 billion in net inflows in the second quarter. Sustainable investments offer significant opportunities to generate alpha for clients, and we are focused on innovating ahead of their needs. For example, we announced last week the first close for the Climate Finance Partnership. We'll invest in climate infrastructure across emerging markets. This strategy is a great example of how public and private sectors can come together to deliver positive environmental and social impact for communities and attractive risk-adjusted returns for clients, including global institutional investors, for governments, and for philanthropies. BlackRock's broader, active platform is playing an increasingly important role in our clients' portfolios, and we are seeing the benefits of our investment in our growth and our investment performance. We generated $63 billion of active net inflows in the second quarter across equities, fixed income, multi-assets, and alternative strategies. This growth is outpacing that of the $70 trillion active management industry as we continue to capture active market share. Long-term investment performance is strong with over 85% of our fundamental active equities, systematic active equities, taxable fixed income assets outperforming the benchmark or peer medians over the past five years. By delivering durable alpha for clients, we remain well-positioned to continue to generate growth in active strategies. More clients are looking to outsource their entire portfolio as regulations intensify, operating costs rise, and investing grows more complex. They want customized solutions spanning active, index, alternatives, powered by sophisticated technology and risk management. The breadth of BlackRock's investment platform, our portfolio construction expertise, and our Aladdin technology uniquely positions us to meet these clients' needs. We are honored to be entrusted to manage the over $30 billion of pension assets for British Airways in the second quarter through the creation of a bespoke investment and service model. This partnership represents the largest of its kind in the U.K. pension fund, and we believe it'll be a catalyst for more transformational change in the industry. We manage over $200 billion in OCIO assets today and believe the trend towards outsourcing will only continue to accelerate. We're also seeing demand for personalization growing more among the financial advisors and our wealth clients, and we're continuing to invest behind the democratization of tax-efficient, personalized portfolios at scale. BlackRock is partnering with financial intermediaries in providing model portfolios which utilize our broad range of iShares ETFs and actively managed funds, as well as separately managed account strategies across AlphaFactor investing and index investing. Building on our acquisition of Aperio, we recently announced a minority investment in SpiderRock Advisors, which will further enhance our ability to provide wealth managers and financial advisors with tax-efficient, personalized portfolios and risk management solutions. This is another major step we are taking to advance our market-leading franchise in personalizing and personalization of SMAs. Alongside ETFs, SMAs continue to see high growth rates as advisors add personalization and tax management to wealth client portfolios. BlackRock is the second-largest SMA provider today with over $200 billion in assets, including Aperio, and we remain focused on investing in a comprehensive platform of solutions and customization capabilities for the wealth management market. BlackRock's commitment to evolve and to meet our clients' needs is recently most evident in sustainability. As we adapt to the fundamental restructuring that the energy transition is driving across the economy, we are investing across products, data, technology capabilities, so we can help clients address the impact of sustainable factors on their portfolios and help them capture significant client demand for sustainable solutions. Last year, we began developing Aladdin Climate to fill a need in climate risk analytics and to help investors better understand and act on climate risk. Aladdin Climate measures at both the asset and portfolio levels, the impact of physical risk, like extreme weather events, and transition risks such as policy changes, new technologies, and energy supply. In June, we further advanced Aladdin Climate through a new partnership with Baringa. The combination of Baringa's climate transition risk models and Aladdin's financial and physical risk models will provide investors with the ability to better understand and customize their climate risk exposures. This partnership is a significant milestone in the build-out of Aladdin Climate and will set a new bar in the industry for climate analytics and risk management tools. We're also committed to bringing the benefits of our global platform to clients around the world by deepening our local infrastructure. We are investing in people who speak every language to understand local markets and regulations and have insight into how the changing world intersects with each of our clients' goals. This includes investing to be the leading global asset manager in China. Rapid economic development and wealth accumulation in the world's second-largest economy has propelled the growth of a $9 trillion Chinese domestic asset management industry. Earlier this year, we obtained our wealth management joint venture license, and last month we received our fund management company license. We are the first global asset manager firm to obtain this type of license. We're now well-positioned to extend the breadth of our investment solutions and insights to all our client segments across China and help more people transition their savings to investments in China, including in preparation for their retirement. With more than half of BlackRock's assets linked to retirement, we are incredibly focused on innovating and helping our clients address the retirement crisis around the world. Client demand for our LifePath target date funds remains strong, with $17 billion of net inflows year-to-date, representing a 10% organic growth and outpacing the entire industry. The need for retirement income in retirement is also accelerating. A recent study BlackRock conducted found that nearly 90% of the participants across every generation wants a retirement income solution, and 96% of plan sponsors feel responsibility for helping their participants generate and manage their income in retirement. BlackRock is developing LifePath Paycheck to address this growing need, and we're already seeing strong commercial demand with several initial client commitments and support from institutional and investment consultants. The incredible momentum we are seeing across our entire platform is a direct result of our dedicated employee base. I have never been prouder of BlackRock's nearly 17,000 employees. I've seen their commitment to our clients and to each other in incredible ways throughout this pandemic. In recognition of this hard work and to have them share in BlackRock's growth and success, we are investing in our employees through an 8% raise in base salary compensation for all employees up to and including director levels as of September 1st, 2021. We strive to cultivate an environment at BlackRock where employees feel supported and have a diverse and inclusive environment where they can thrive and grow and build a career and life. After a period like no other in the firm's history, BlackRock has never been better positioned for the future. My recent trips to Europe and the Middle East to meet with our clients have only further validated our differentiated positioning and our approach to building deeper, broader relationships with our clients. We have always led by listening to our clients and hearing what they want, what they need. through that, through anticipation and embracing change and innovating and staying in front of our clients' needs, that is what driven us going forward. Our fiduciary focus has guided our deliberateness in terms of investments we have made to build a more resilient asset manager and a more resilient technology platform by anticipating and staying in front of our clients' needs. we will continue to deliver industry-leading growth to benefit all our stakeholders for the long term. With that, let's open it up for questions. At this time, I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad. If you do have a question, please take your phone off of its speaker setting and use your handsets to avoid any potential feedback. Please limit yourself to one question. If you have a follow-up, please re-enter the queues. We'll pause for just a moment to compile the QA roster. And your first question comes from Ken Worthington with JP Morgan. Your line's open. Good morning, Ken. Hi, good morning. Thank you for taking my question. I'd love to dig in further into direct indexing and customized SMAs. Maybe first, can you give us some additional color in how SpiderRock complements customized SMAs in your direct indexing capabilities of Aperio? Then you highlighted in your prepared remarks a number of times the importance of retirement solutions. Should we see Aperio and SpiderRock capabilities permeating the retirement management part of your business? If so, what does this mean for LifePath and its evolution over time? Let me have Rob start off and then double-team you here. As you know, more clients are looking for personalization, and that's what we're seeing in direct indexing. Our combination with Aperio, which Laurence D. Fink had mentioned, actually enhances our ability to deliver personalized, tax-managed SMAs and gives us a 2+ year acceleration in that space while we continue to organically build additional capabilities for different client segments. BlackRock's core SMA capabilities historically were in actively managed equities, fixed income, and multi-asset. Aperio brings experience in building index-based, highly custom investment solutions. These are complementary businesses, and they enhance our value proposition for whole portfolio SMAs across equity and fixed income in alpha factors and index solutions. With over $200 billion in SMAs, including Aperio, BlackRock is a market-leading whole portfolio sponsor. With the prospect of higher income and capital gains taxes, we've now built a pipeline of over $6 billion in potential new Aperio mandates just since the transaction closed. This is an example of how we are getting more into the personalization and direct indexing. Of course, ETF and direct index complement the tech that we are investing in and building in. Ken, on target date and LifePath and LifePath Paycheck, we put a great deal of energy on LifePath Paycheck. We are in a position now of working with many different plans, and we see this revolutionizing the 401(k) DB plans, the profit plans. We're in discussions with many, many corporations, and I think we have a lot of future growth and a lot of future announcements in terms of our positioning there. This is actually quite separate from what we're doing on the customized side related to Aperio. We believe this is going to change the retirement business. We have worked with all the consulting firms. We have buy recommendations on this from across many of the consulting firms. We are in dialogue with many, many of the plans, and we hope in the next few quarters to have some very significant announcements related to the success we are seeing in LifePath Paycheck, which will be changing, as I said. This is BlackRock responding to the future needs of our clients. I think when we are able to announce this with the clients, this is going to really identify how retirement is going to be reshaped and why the need for more certainty during the de-accumulation period of time, why that is so important, why there's such urgency around that. We are very proud of the R&D work that we did over the many, many years now. Now in these private conversations, it is really resonating more than ever before with our clients across the United States, and hopefully this could be something that we could expand beyond the United States. This is going to be a significant part of our whole foundation. Lastly, I would just say, related to LifePath Target Date franchise, we're up to now $370 billion alone without even talking about the LifePath Paycheck. This is going to continue to accelerate where we're taking market share. Your next question comes from Craig Siegenthaler with Credit Suisse. Your line's open. Hi, Craig. Hey, good morning, Larry. I had a question on ETF adoption. I know you covered a lot of this in the Investor Day, but I had a follow-up here. Which client verticals do you think provide iShares the most one to three year upside? Have you seen a significant rise or decline in demand among any of the client segments over the last six months? I'm thinking some of the bigger ones like U.S. RIA, insurance, and retail. Good question, Craig. You know that we have said over and over that we see significant room for continued growth in ETFs, and the penetration of the equity and bond markets is still very low. We expect generational shifts to unlock a lot of new growth, especially whole portfolios where ETFs in fee-based are around 11%, new investment capabilities like ESG, and overall capital markets replacements, where we're seeing ETFs that are about 5% of the total market and 1% of the bond market. We expect, to give you a number to throw out, by 2025, that ETFs are going to more than double to $15 trillion. Even at that level, we would still be a small part of the markets in which we compete, which is why we think there are decades of growth ahead. We fully intend to be the market leader in revenue growth in truly organic, client-driven flows and in total assets as this evolves. We recognize that we have to offer choice in the vehicles that we show clients, but ETFs, I believe, are going to lead in that. There are some key client segments. One is Europe, which is adopting very quickly. The wealth area through model portfolios, again, of which we are a leader, is showing huge growth. Certainly in institutional clients, primarily in fixed income, is showing growth. Another segment, sustainable, which you heard about, which we are the leader, is also showing growth. What makes our ETF platform unique relative to any competitor is its diversity and broad client base. For example, our global client base is made up of self-directed investors, wealth managers, pensions, insurers, and active managers. We have the most diversified platform with $2.3 trillion in the U.S. and $650 billion in Europe and $2.3 trillion in equity and $700 billion in fixed income. You can see how this matches up against the client segments I talked about. Most importantly, which may be overlooked, we provide the most secondary market liquidity. U.S. iShares traded almost $9 trillion in 2020 versus $7 trillion in 2019. EMEA iShares traded $1.2 trillion in 2020 versus $1 trillion in 2019. This, along with our precision exposures, which are often unique to us, while it has been a drag in prior years, are actually a driver of our strong revenue growth this quarter. We're excited about the growth, specifically in the segments that we are a leader in today. Larry, the next question comes from the line of Alex Blostein with Goldman Sachs. Your line's open. Good morning, Alex. Hey, good morning, Larry. Good morning, everybody. I was hoping you guys could flesh out the expense dynamics a little bit in the quarter, as well as we look out further in the year. Obviously, very strong revenue environment. Revenue's up 25% in the first half. The comp rate is actually up on a year-over-year basis first half as well. Now, I know performance fees tend to skew that upward sometimes, so maybe help us think through the rest of the year and then just big-picture your framework around expense management and margins. Thanks. Thanks, Alex. It's Gary. Good morning. Let's break it down maybe individually. In terms of the comp side, we talked about comp being up about 34%, and that primarily reflected higher incentive compensation. You correctly pointed out that incentive compensation is very much tied to both profitability and performance. As we saw higher operating income and performance fees, that definitely ticked up. We also saw higher deferred compensation year-over-year. That was up by about $100 million year-over-year. I'd say there's really two things there. One is more ongoing, which is the ongoing impact of additional grants associated with last year's compensation. Obviously, we defer a significant component of current compensation for retention. Last year saw a rather large level of deferrals, especially as it related to performance fees and the level of performance fees last year. I'd say that's probably about 60 or so% of that increase. There was also a one-time, what I would call a crystallization and acceleration of certain compensatory arrangements tied to the success o f one of our historical acquisitions that was probably about $35 million or about 70 basis points on the comp ratio that ultimately should migrate away now that has been settled down. That's it on comp as I would think about it. Obviously, Larry mentioned the base salary increases, which is more a function of going forward. He talked all about recognizing the accomplishments of our tremendous employees over the last 18 months. I don't expect that to have a very significant impact on our financials this year, but it could be given its effective date of September 1st. Let's call it roughly 20 basis points or thereabouts on both comp and margin impact on a purely isolated basis for the rest of the year. In terms of G&A, I think we gave you some guidance at the beginning of the year. We've made no reductions to the discretionary investment spending plans in terms of G&A spend and hiring that we originally budgeted for the year that we referenced on our call. I think much as others are, I think we're probably hiring a little slower than we had anticipated. We're working on that to make sure we can get the employee support to support our growth plans. We would, as I think is somewhat customary for us, anticipate our overall level of G&A spend to be higher in the second half, especially around such areas like marketing technology. As Larry mentioned, if people get back to traveling, obviously we haven't had a lot of T&E in the first part of the year, but the potential for that, I think exists for next year. Broadly speaking, that's it on the comp. There was kind of that one time issue. On the G&A side, again, our plans are generally exactly the same as we laid them out to you at the beginning of the year. Your next question comes from the line of Patrick Davitt with Autonomous Research. Your line is open. Hi, Patrick. Good morning. Hey, everyone. It's obviously hard to handicap the chances of a change in the capital gains tax rate at this point. Are you guys seeing any change in either retail or institutional behavior change in conversations around that concern, be it specific gain harvesting or just wanting to talk about options should it come through? Not really. I mean, look, maybe that is one of the reasons that Rob can be able to talk about the personalization and customization of tax-efficient strategies. I think across the board, the awareness of after-tax returns are becoming more dominant in the RIA channels. I don't think it's reflective yet, and I don't think people are motivated or seeing any real changes in behaviors related to the potentiality of these changes in taxes. I think there is just a much greater awareness and the ability now to create customized, personalized, tax-efficient portfolios. I think that's what's being driven. Rob, do you have anything to add? I would say that's another reason why people are moving towards ETFs, which are a much more tax-efficient tool than the typical mutual funds that they are in. actually, it's another growth area for ETFs. Your next question comes from Dan Fannon with Jefferies. Your line is open. Thanks. Good morning. Larry, you mentioned that you're having some of the largest conversations or biggest mandates with clients in previous history, and I was just curious. You used to give a backlog number on these calls, and obviously you're much bigger and more diverse today, but hoping you can help us size the kind of more near-term potential flow picture or those dialogues and kind of size those mandates just so we can think about the potential there. Yeah. Well, you're right, we don't do that, and we're not going to do that on this call. I think when you think about, and when I referenced the BA OCIO mandate, we believe this is just the beginning of more focus on the virtues and the value proposition for these pension funds to rethink how it's organized. Should it be done through a platform like BlackRock, and then do we create the efficiencies? Most importantly, can we have a better fiduciary outcome on behalf of their participants? All of this is about the participants, and can we provide a better outcome for the participants? I really do believe we are thinking that. We've had some very large wins with a few other clients in the last few quarters. We are in large dialogue with many more. I want to underscore what the transformation of LifePath Paycheck could be, too. These could be some very large opportunities, too, and having the defined contribution business being reimagined and rethought, and that is how we framed it. How can we reimagine and provide better certainty to the participants? How can we provide better outcomes? How can that lead to a better closeness between the employer and employees? How can they build deeper bonds when the employees are retired during the deaccumulation period of time? These are the broad-based solutions that we've been focusing on, no different than the broad-based solutions we focus on the need to focusing on climate in portfolios across the board. I believe what you're seeing in the past related to above trend line growth, above 5% organic growth, is because of these deepening relationships across the board. As I concluded in my speech, I do believe we are going to continue to see this type of elevated opportunity. It's because we are so relentlessly focused on how to think about our clients and help them become better at what they're doing. I truly believe the outcome of British Airways, and the other major that we talked about. I would say with the strong performance that we've had in our active platform, flows generally follow. when you can have, and no firm can have this, when you can have a dialogue where you are agnostic about the role of index assets like ETFs and active assets, and then focusing on whether it's tax-efficient portfolio strategies, or focusing on a sustainability overlay. We're now focusing on outcomes related to more certainty during de-accumulation periods of time. This is what's driving the flows, and this is what I think is differentiating BlackRock, that we are spending more time, we're investing, as Gary talked about, our investments in the future. These are the type of investments we're making and making sure that we are staying in front of the needs of clients and providing something unique and differentiated. I do believe that is resonating more and more, and let me just leave it at that. All right. Your next question comes from the line of Bill Katz with Citigroup. Your line's open. Good morning, Bill. Good morning, everybody. Can you hear me okay? Yeah, perfectly. Okay, wonderful. Thank you. Thank you for taking the question this morning. Great update. I may be a two-parter. I'm sorry to ask two questions, but sort of interesting things going on. One, Larry, at what point do you start to think about upgrading your 5% organic growth rate? It seems like everything you're talking about here has just very powerful and long-tailed opportunity, and then somewhat unrelated, but just sort of following up on your last conversation on the Paycheck opportunity. Where is that share coming from? Thank you. Yeah. I'm going to let Gary answer that because Gary as a CFO, is the one who really is the tethering of our platform, and he provides the balance between me and him, and so I love him. Gary? Thanks, Larry. Greatly appreciate that. Look, Bill, I think that it won't surprise you to hear a lot of the same answers that I've traditionally given you on that. I think we feel very good about our organic growth potential going forward. I think it reflects the platform we've built. I think it reflects global reach, full range of investment capabilities, integrated risk, great performance. As you know, growth is also somewhat tied to markets in particular. I think some of the growth that we're seeing today clearly is a result of the type of environment that we're in, and so we try not to get too focused on a particular environment, but really look across cycles. I think if you look at what we've done over the last five years, we've actually averaged about a 5% organic-based fee growth over the last five years. While we've actually, I think really the more important piece of this is not how fast we necessarily grow in a more risk-on environment, although I know Larry doesn't like that term. I think the reality is that when we see the markets fall back, we stay positive. Even in tough markets like 2016 and 2018, where the industry was roundly negative, we were still in positive territory. I think I would also remind you that, look, the industry is basically right around 3% in terms of where everyone thinks the industry more broadly is going to grow. At 5%, we're already growing, if you will, at a 60+% premium to where we think the industry is, and we feel very comfortable with that because of our breadth, because of our solutions orientation, and our technology platform. I think we feel very good about both secular growth more broadly and maintaining share in places like ETF. We feel like we have a ton of room to run in places like liquid where the market is growing, and we're generally still low single-digit share. We think our investment performance positions us well to continue to play a major role in active. For the moment, until we get through this cycle and see where we come out the other side, 5% is the target, and we feel very good about our performance going forward relative to that. I like that Paycheck as a credit frame. It is U.S.-based, so specifically, but we're redefining defined contribution business in the U.S. I think that's what it is. Globally, retirement is a $70 trillion, has a big gap. We need to rethink retirement as we've moved away from DB, but we need to find better ways of creating more certainty in a defined contribution world. I think this is one of the big problems we have in our society today, the uncertainty of retirement. This is one of the problems that we've been focusing on for years and years and years and try to find a way to have something closer to a defined benefit, but having it still being in a defined contribution way. I think there's just great opportunities, and we're having robust conversations on this, Bill. I think it's going to reshape or reimagine or redefine the defined contribution business. Your next question comes from Michael Cyprys with Morgan Stanley. Your line's open. Michael. Good morning. Good Good morning, guys. Thanks for taking the question. Just had a question here on Aladdin. I was hoping you could update us on the pipeline. I recall in the past you had spoken about a slowdown in implementation, but given the recovery here, the reopening, just curious if you think we can see that accelerate? Also on the technology services revenue, I think it was up about 14% in the quarter, but the ACV was up a bit higher than that. Just hoping you could help unlock some of the moving pieces there between your ACV definition and the technology services. I think your ACV excludes some of the consulting fees and implementation fees. Just hoping you might be able to quantify how much that is relative to the overall technology services line. Thank you. Thanks, Michael. Again, we're not going to get very specific on pipelines, but we will give you some tonality on our Aladdin growth rate. I think as we've talked about, there's clearly increased client demand accelerated by COVID for comprehensive whole portfolio solutions that involve greater systemization, fewer vendor relationships as a number of financial service companies and other insurers, asset managers, and funds try to minimize their costs and, more importantly, trying to basically take down the number of data sources that they're relying on. We feel that growth going forward is going to be a function of a number of things, but it's going to be primarily gaining new clients, expanding relationships with existing clients, expanding the platform through enhanced functionality and products, and obviously expanding into under-penetrated geographies, most notably Europe and Asia. With that, what we've said at Investor Day and we'll continue to reinforce is, given all of that our pipeline is as strong as it's ever been. We continue to reaffirm our low- to mid-teens growth rate for technology services revenue. As it relates to ACV was up 16%. As you correctly note, we're migrating a bunch of the eFront business over to Aladdin in terms of its hosted model as opposed to its traditional model. That does, as you say, have different accounting ramifications. We decided to put ACV out as a key performance metric because we think it better reflects the overall momentum of the business and takes away some of the timing and accounting changes from migrating models over. ACV was up 16%. I think as you also correctly note, that's probably a little faster than we would expect the longer term to be, given our target. I think that's a function of some of the business coming through today at a more rapid rate that was delayed from a year ago in the early days of the pandemic, as we highlighted longer sales cycles and contracting periods. We're definitely seeing a little bit of an acceleration there, but again, reaffirming our low- to mid-teens growth outlook. I would just add two things. One is, a lot of this was from our meetings in New York last week, the demand for data and analytics on sustainability is going to grow exponentially. This is why we've been so aggressive in terms of building out analytics and data across the board. I do believe this is going to be a major sleeve, a major opportunity for Aladdin. Aladdin Climate is going to be a major component of Aladdin. We believe having the differentiating data and analytics is going to be further why clients are going to be looking to add on Aladdin across their portfolio. What we've witnessed since the acquisition of eFront, too, the need for data and analytics related to alternatives and across all the alternatives space integrated in a comprehensive data and risk analytic environment is really, really important. If you overlay the movement in the capital markets and client demand and alternatives, if you overlay the demand for clients related to sustainability and climate, that's going to be a major change, and that's going to be a major component of it. That's why Samantha Tortora is now having that role in helping us drive Aladdin Climate as she moves away from our client relationships. I'll leave it at that. Ladies and gentlemen, we have reached the allotted time for questions. Mr. Fink, do you have any closing remarks? Thank you, operator. I want to thank everybody for joining the call this morning and for your continued interest in BlackRock. Our second quarter results, again, are a result of a steadfast commitment of focusing on our clients first, and importantly, thinking and investing and anticipating their needs in the future. I see a tremendous opportunity ahead, and BlackRock's focus remains on the long-term fiduciary commitment to all our clients worldwide. We will continue to invest in our business so we can deliver that long-term value for our stakeholders and lead the asset management industry in the many, many years ahead. Thank you again, and have a great remainder part of the summer. Let's everybody hope to have a great third quarter. Talk to you then. Bye-bye. This concludes the phone conference meeting.