Martin Small: Thanks. I’ll start, and then I’m sure there’ll be some additional color. First of all, clients continue very much to increase their allocations to illiquid alternatives in private markets. These are the client needs that drove our acquisition of eFront. They’re the moves that bring us here today with GIP. And the moves that we’ve made organically and inorganically to build market-leading alternatives capabilities. At BlackRock, our alternatives client assets now total $330 billion, including liquid credit. Our private market to liquid alternatives have reached $166 billion in assets with about $140 billion in fee-paying AUM. And private credit, private equity solutions and infrastructure were the main drivers of Q4 and full year flows with $4 billion and about $14 billion, respectively.
Since 2021, we’ve had excellent momentum in our private markets fundraising. We’ve raised approximately $96 billion of gross capital across our platform, and we continue to see good momentum with clients. We’re building on vintages and strong track records, so we can scale successor funds. We expect our primary growth drivers, as I said, over the next three to five years to be infrastructure and credit private equity solutions, where we’ve built great franchises. We continue to see terrific opportunities. Larry and Bayo have really talked about what some of these are. But I do think BlackRock has a durable competitive advantage that’s been built through our public markets, relationships with global corporates, our advisory work with sovereigns in the public sector around the world as well as our technology capabilities of the year and bringing together a lot of this public and private sector long-term objectives, officially moving capital to key drivers of industrial transformation.
That’s often when BlackRock at its best. So we’re very optimistic and energized by our capital formation opportunities. particularly with our new partners at GIP. And I think as Larry and Bayo said, they’re both going to be traveling a lot. So I’m looking forward to how those sessions, I think, will help us grow together. But importantly, I think really bring innovative solutions to corporates, through partnerships and unique public-private opportunities for us that will help grow our illiquid alternatives base and assets.
Laurence Fink: GIP is in the final stages of raising a very large fund, which because it’s in the stages of raising the money that we cannot talk about it. So stand by. But it’s in the late stages of fundraising.
Robert Kapito: The other thing is that we are very good at structuring product for the individual investor, the wealth investor, and I’m looking forward to working with Bayo’s team to figure out how our teams can get together and democratize those investments because, as Larry mentioned before, this is such a perfect retirement product long duration, good yield, equity upside, it’s going to open up new areas of growth that we have not tapped yet.
Operator: Next question comes from Brennan Hawken of UBS.
Brennan Hawken: Good morning. Thanks for taking my question. Happy New Year. So curious, a question on the deal here. is this a deal that you would consider transformational? Or is this more indicative of a desire to continue to add more all its capabilities going forward? And then one, just sort of a little bit more granular, the roughly $400 million in FRE is based on 2024 forecast from what I can understand. Can you give maybe an indication about where GIP’s FRE was for 2023?
Martin Small: Thanks, Brennan, for the question. It’s Martin. First of all, this is unassailably a transaction that we consider transformational. Most definitely, our clients feel its transformation. The volume of e-mails, I can see on Larry screen suggests to me that it’s transformational. And it’s what we’ve talked about is transformational transactions. It’s transformational in terms of the capabilities that BlackRock has and can offer to clients and it’s transformational in terms of the financial and earnings impact to the firm. So those two axes are how we’ve always measured transformational in terms of our capabilities and in terms of the financial impact, and on both fronts, this is definitely a transformational transaction.
GIP has generated really strong performance as well as FRE growth. I’m not going to comment on the 2023, it will let the 2024 speak for itself. But we continue to see great growth opportunities in terms of being able to expand fee paying AUM across the illiquid alternatives platform with the infrastructure as a priority as well as growing base fees in a way that adds to our 5% organic growth objective through the cycle.
Laurence Fink: Let me just add on some of our small and large transformational deals. Transformational deals could be as large as a BGI transaction. But if you remember, everyone, when we did that transaction, most people hated it. They did not see the merits, did not see the marriage of active and passive, did not think cultures can merge, did not understand ETFs as a technology. And as Bayo was saying earlier, what we bought BGI was under $300 billion in iShares assets, and now it’s over $3.5 trillion. In the past 10 years, we acquired First Reserve when it had about $3 billion, and it’s more than tripled its assets in a number of years in terms of infrastructure. Just recently, we acquired Aperio and the assets are up 95% since we acquired Aperio.
