Laurence Fink: Martin.
Martin Small: Thanks, Mike, appreciate it. So let’s start with our industry-leading organic growth, it’s been the result of exactly what you flagged. I think really disciplined investments that we’ve consistently made through market cycles and we tried to obviously be financially flexible, so that even in sort of the most uncertain markets we continue playing offense and come out even stronger. We have a really strong track record I think of making good investments and deliberating — delivering a differentiated operating margin. We obviously had a 42.5% operating margin over the longer-term. We’ve expanded our as adjusted margin in the last seven to 10 years. And even in 2022, as I talked about on Investor Day, Mike, we expanded our margin by 240 basis points over the last decade.
Those results I think are really well above the large-cap peers. We’ve seen a good amount of margin contraction over the same period. But as you’re flagging, in the first half of the year, here we’ve seen $830 billion increase in AUM. We’re now at $9.4 trillion, and obviously, the move in markets has an impact or can have an impact on our operating margin in a meaningful way. And as markets recover, I think we expect to see our revenue growth outpace growth in discretionary expense items and be accretive to operating margin. I think some of the real actions are investing for growth in the most efficient way possible. Like we’re going to continue to drive more fixed-cost scale through technology. Rob Goldstein talked about at Investor Day, our opportunities for Aladdin icing offs with eFront, which we think can drive more scale.
Larry talked a bit about sourcing. I think we can drive more systematized and efficient differentiated sourcing through our BlackRock Capital Markets team. And then when you think about some of these technology integrations that we’ve done, whether it’s Avaloq, Envestnet, those drive a lot of scale and their investments that really drive differentiated operating organic growth. So, we see great opportunities. We have no change in our expense guidance. We expect to finish the year, as I said, broadly flat in headcount and with G&A. up mid-to-high single-digits.
Operator: Thank you. We’ll take our next question from Ken Worthington with JPMorgan.
Laurence Fink: Hi, Ken.
Ken Worthington: Hi, good morning. Thanks for taking the questions. Good morning. Cash management flows were strong this quarter, so maybe two questions here. First, the SEC launched updated money market rules this week, any reaction to the new rules and the implications for the U.S. Money Fund business? And then second, how enthusiastic are you about the longer-term growth prospects for cash management? Your response to Craig’s question earlier suggested that cash in some cases is a placeholder for assets that are going to move to fixed income products when the shape of the yield curve changes, can cash management grow as that transition is taking place?
Laurence Fink: Rob?
Robert Kapito: So, you know, we’re supportive of any efforts to improve the resiliency and transparency of U.S. Money Market Funds, but non-government institutional money market funds which were really the main focus of the rules are a very small part of our cash business, ours is U.S. government funds and separate accounts, that’s really the bulk of our assets. And of course, we have a diverse set of cash offerings including money market funds and separate accounts, ETFs. ETF is another short-duration strategy. So we’re going to work together with our clients as they consider the best tools for their liquidity management and we will continue to review the regulatory rules to see what impact that could have on our business, which I think is quite limited.
