“In addition, we'd expect our adjusted compensation to net revenue ratio to be modestly higher due to compensation associated with performance-related revenues from HPS.”

In context

“gher average ETF AUM and net inflows. Our second quarter as-adjusted operating margin of 43.3% was down 80 basis points from a year ago, partially due to the impact of lower performance fees. We'll continue to execute on our financial framework of aligning organic growth with controllable expenses. This approach has yielded profitable growth and operating leverage in good markets, and we believe it adds more resilience to our operating margin when markets contract. We welcomed approximately 800 new colleagues to BlackRock following the close of the HPS transaction. Inclusive of the HPS acquisition impact at present, we would expect a low teens percentage increase in 2025 core G&A expense with the onboarding of GIP, Preqin and HPS as the main driver of the year-over-year core G&A increase. In addition, we'd expect our adjusted compensation to net revenue ratio to be modestly higher due to compensation associated with performance-related revenues from HPS. Our capital management strategy remains, first, to invest in our business to either scale strategic growth initiatives or drive operational efficiency and then to return excess cash to shareholders through a combination of dividends and share repurchases. At times, we may make inorganic investments where we see an opportunity to accelerate growth and support our strategic initiatives. At the closing of the HPS transaction, we issued and delivered approximately 8.5 million BlackRock SubCo units subject to 2- to 3-year lockup periods. SubCo Units are exchangeable on a one-for-one basis with BlackRock common stock. We also issued approximately 1 million BlackRock restricted stock units, primarily for retention of HPS employees. Additional SubCo Units may be issued in approximately 5 years, s”