“As I laid out at our 2025 Investor Day, we continue to target a 45% or greater adjusted operating margin, with our margin on recurring fee-related earnings running higher.”

In context

“remain a trusted partner. The evidence speaks loudly that we are one of their key trusted partners. Operator: Your next question comes from Brian Bedell of Deutsche Bank. Brian Bedell: Good morning. A two-parter around organic base fee growth and scaling that. Beta has always been your best incremental margin opportunity. As you grow organic base fee growth faster, do you see a better ability to scale that over time? Are you seeing more demand from outside the U.S.? You mentioned an incremental shift towards non-U.S.—do you see that continuing? And could you comment on the nice mix in the base fee rate? What are you seeing as the exit base fee rate for the quarter? I do not think I heard that. Martin S. Small: Thanks, Brian. We continue to deliver industry-leading margins over the cycle. As I laid out at our 2025 Investor Day, we continue to target a 45% or greater adjusted operating margin, with our margin on recurring fee-related earnings running higher. We expanded both operating and recurring FRE margins by over 100 basis points in the quarter. We did that in an environment where AUM actually finished on a spot basis lower than average. Our operating margin for the quarter was 44.5%, while the margin excluding performance fees and related comp was 45.6%. Looking forward, we have run BlackRock, Inc. at margins north of 45% before—close to 47% back in 2021. We did that at a time when we did not have a large-scale private markets franchise. Now we have added engines of infrastructure and alternative credit with our colleagues from GIP and HPS. Both franchises were north of 50% FRE margins when they joined BlackRock, Inc. Over time, we see two things. One, the margin on recurring fee-related earnings can trend upwards toward the trajectory”