“So we think that over time, we'll see the margin on fee recurring earnings driving upwards toward the trajectories of the best-in-class private market names, so think north of 50%.”

In context

“ntinue to deliver industry-leading margins. As we talked about at our Investor Day, we continue to target 45% or greater adjusted operating margin profile with our margin on recurring fee-related earnings running higher. Our operating margin in the quarter was 45%. And as I mentioned in my remarks, we continue to deliver margin expansion on recurring fee-related earnings. So excluding the impact of performance fees and related comp, our margin would have been 45.5%, up 30 basis points. Think of that as more akin to an FRE margin burdened for stock-based compensation. This growth here at BlackRock is fueled by strong FRE growth in our private markets franchises, along with high-value, higher fee rate and scaled strategies in active ETFs, digital assets, systematic equities and other areas. So we think that over time, we'll see the margin on fee recurring earnings driving upwards toward the trajectories of the best-in-class private market names, so think north of 50%. A couple of things. I'd remind you that we defer a portion of compensation linked to performance fees for talent retention. So in years where we see higher performance fees, we also see higher deferrals, which impact comp in future years. We continue to drive operating leverage and growth through technology and automation using the benefits of size and scale to reduce costs, strategically footprinting our business. And as we set out in the Investor Day, we're targeting that 45% or higher greater adjusted operating margin. We're delivering steady operating margin expansion before the GIP, Preqin and HPS transactions. As we talked about during the announcement of those transactions, GIP and HPS both have 50% or higher FRE margins. So that's accretive to our margin on fee-related earnings. S”