BlackRock Inc (NYSE:BLK) Q4 2019 Earnings Conference Call - Final Transcript

Jan 15, 2020 • 08:30 am ET


BlackRock Inc (NYSE:BLK) Q4 2019 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Good morning. My name is Laurie, and I'll be your conference facilitator today. At this time, I would like to welcome everyone to the BlackRock, Inc. Fourth Quarter and Full Year 2019 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. [Operator Instructions]

After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions]

Thank you. Mr. Meade, you may begin your conference.

Christopher Joseph Meade

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 lists some of the factors that may cause the results of BlackRock to differ materially from what we say today. BlackRock assumes no duty and does not undertake to update any forward-looking statements.

So with that, I'll turn it over to Gary.

Gary Stephen Shedlin

Thanks, Chris. Good morning, and Happy New Year to everyone. It's my pleasure to present results for the fourth quarter and full year 2019. 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.

For many years, BlackRock's differentiated globally integrated asset management and technology business, including our risk management and portfolio construction tools has proven its ability to deliver for clients and shareholders in different market environments. That continued in 2019. A difficult fourth quarter of 2018 created a challenging start to the year. But as we noted a year ago, volatile market environments create opportunities for growth at BlackRock as long as we remain disciplined to continue playing offense.

BlackRock achieved both revenue and earnings growth during 2019. Investment performance across our Active products was excellent with 86%, 76% and 84% of taxable fixed income, fundamental and systematic active equity assets respectively above benchmark or peer median for the trailing three-year period. We generated record net inflows of $429 billion, representing 7% organic asset growth and 5% organic base fee growth, enabling us to once again meet our aspirational organic growth target for the fifth time in the last seven years. And we finished the year with strong momentum, reporting over $129 billion in total flows in the fourth quarter.

The financial strength and stability of our operating model allows us to continuously invest through market cycles and capture growth in areas of highest client demand, by technology, illiquid alternatives and iShares, especially higher growth strategic ETF segments such as factors, fixed income, sustainable and megatrends. These investments position BlackRock to offer clients not simply products but comprehensive whole portfolio solutions and to generate consistent