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Laurence Fink

Thank you, Martin. Good morning, everyone, and thank you for joining the call. BlackRock's positioning and connectivity with clients are stronger than ever, and it's clear in our results. Our structural growth strategy resonated in the first quarter with secular growth across our businesses, even with a volatile market backdrop.
We delivered above target 6% organic base fee growth, which represented our best start of the year since 2021. That's in a quarter where the S&P 500 ended 9% off its February peak. It's proof of BlackRock's enhanced structural strength, where we can power organic revenue growth that's undeterred by market movement.
Revenues grew double digit and are as-adjusted operating margin expanded by over 100 basis points. First quarter total net inflows were approximately $140 billion, excluding the episodic institutional index equity activity that Martin mentioned. Importantly, net inflows and organic base fee growth were well diversified across the entire BlackRock platform.
We invested ahead of our secular growth opportunities and ahead of where our clients are going. This quarter represents the largest organic base drivers, where strategies where we developed in just the last few years, including GIP, our digital asset offerings, Aperio, active ETFs as well as our tech and data-driven systematic equity franchise. Strength in our foundational businesses also underpinned results with a record start of the year for iShares, ETF, and a 14% technology ACV growth.
Uncertainty and anxiety about the future of the markets and the economy are dominating each and every client conversation. I was traveling in Europe last week when the sweeping US tariffs announcements went beyond anything I could have imagined in my 49 years in finance. I wrote in my Chairman's letter last week that no system has done more to generate wealth for more people than the capital markets. As the capital markets have grown, more people than ever before our investing in the stock market.
A little more than 60% of Americans own stock in one way or another, in mutual funds and ETFs and in individual shares and especially in their own retirement accounts like 401(k)s and IRAs. So this isn't Wall Street versus Main Street. The market downturn impacts millions of ordinary people's retirement savings. Their investments for their child college education and tuition or steps they're taking to have more financial stability.
We're in a period of geopolitical and economic activity, but we have seen this before. When there are big pivots in the world, big structural changes in the market, like the financial crisis, like the European debt crisis or COVID or the surging inflation in 2022, BlackRock stayed in front of our clients and made some of our greatest leaps forward. At BlackRock, we are -- we really challenge ourselves not to get mirrored down in all the negativity, but to navigate, to mitigate the move forward, to work with each and every client to help it each and every client. In recent weeks, we've connected with thousands of clients, providing them with real-time information and our views on unfolding events.
BlackRock's expertise is built and delivered through our nearly 23,000 employees located in 30-plus countries. Together, they serve clients in more than 100 countries. The majority of our workforce is actually based outside the United States. Our international workforce includes people in our global platform centers in Europe, in India, and our international commercial offices all across the world. This enables us to bring the global insight and investment strategies locally and to bring local insights globally.
We need to be an American in the United States or German in Germany or Japanese in Japan or Canadian in Canada and Mexicans in Mexico. It's also to bring opportunities we see in each and every country to our global client base. It's contributing loyalty to build a country's capital market and retirement system and working for each and every client in each and every country.
Probably 80% of what we bring to our clients, our clients are looking for a global strength, global expertise, they're looking for scale and operating efficiencies and investment talent. But it's the last 20% of the magic where it occurs. It's where you show the best of BlackRock in a local setting anywhere in the world. It doesn't matter whether the client is large or small or where they are, but to know that BlackRock is working for them, and we are -- and we show that we are working for each and every one of them.
We're intentionally shaping our platform around the needs of our clients. And we talk about this in every quarter result. It's about the clients, building a premier global public-private market investment and technology firm. We've assembled a leading franchise across active strategies, ETFs, private markets, technology to serve the complete range of our clients' needs and to help them in each and every one of their own ambitions.
Whether seeking capital preservation and cash and short duration or capitalizing on opportunities in equities or looking for income and uncorrelated returns in private markets, BlackRock's comprehensive offering is leading to clients consolidating more of their portfolio with them. I look at our cash business is one example of how we help clients manage asset allocation and liquidity. Our cash AUM is up at an all-time high as of April, now it's at $950 billion.
At BlackRock, we're always listening and deeply listening to each and every client and looking ahead to what their future needs will be. We're working with them on long-term issues, not the ups and downs of the market or the next tweet or the next issue. We're constantly testing ourselves to see where we need to do more, to be more different, to be faster, to be working on behalf of our clients. I said last quarter that it's just the beginning. The successful arcs of BlackRock of GIP and Preqin and soon HPS are all coming together in a shared story. GIP and Preqin employees moved into our BlackRock headquarters earlier this year, and we expect HPS to join shortly after the closing. It's one BlackRock physically and definitely one BlackRock spiritually.
We're seeing how sensitive public markets hard to uncertainty and how quickly they can move in reaction to policy proposals. These dynamics could drive even more capital those into private markets as investors look to insulate portfolios from tariff impacts and seek attractive income and growth. Last year, we invested in enriching our private markets information, investments, data platform to serve our clients more. We are seeing the results today and are positioned for this type of secular growth as economic uncertainty plays out.
In infrastructure, our combination with GIP just six months ago has already unlocked differentiated opportunities for our clients. Last month, we announced the largest infrastructure investment in our history. We have an agreement in principle to acquire a significant portfolio of 43 ports in more than 20 countries. We had a strong existing relationship with the seller of these assets and as a long-term shareholder. Our partners in this consortium includes Mediterranean Shipping Company, one of the world's leading -- leaders in shipping and logistics. And Terminal Investment Limited, which is one of the world's largest global container terminal operators. Upon closing on this deal, our consortium, our investors will have a portfolio of approximately 100 ports around the world. Together, we know how to invest in, own them, improve on them, and operate them.
We have recently expanded our AI infrastructure partnership, and we're excited to welcome xAI and NVIDIA as partners alongside Microsoft and MGX. Since this announcement, AIP has attracted significant capital interest and advanced key discussions on AI infrastructure projects. The partnership will meet the expected target of $30 billion in capital from investors, asset owners and corporations. And over time, we believe this can unlock over $100 billion and investment potential, including debt financing of these infrastructure projects.
Both AIP and the landmark ports announcement are early confirmations of the power and value of GIP pairing with BlackRock. It's unlikely either of us on our own would have been part of these transactions. At the heart of the GIP acquisition was our conviction and how our combined relationships, our combined expertise would come together and deliver fantastic investment opportunities for each and every client worldwide.
We expect to scale our private credit AUM to approximately $220 billion following our planned acquisition of HPS. The opportunity set for private credit is expanding as a variety of borrowers from start-ups to large corporate partners seek more flexible execution as they evaluate their financing needs, and the longer duration lower-risk returns of investment-grade private debt are driving increased allocations from insurance companies. BlackRock already manages approximately $700 billion for the insurance industry, primarily in index public credit strategies and our Aladdin technology powers over 100 different insurance companies.
As Mark mentioned, our investment in Viridium is the latest example of our commitment to supporting partners through broad solution sets, including investments, capital, and insurance expertise. BlackRock has a meaningful role in helping manage Viridium private market investments going forward, including in infrastructure investments and private credit. The upcoming addition of HPS represents even more opportunities to extend our insurance relationships across all private credit markets.
We also expect HPS to advance our positioning in the quickly growing alts to wealth space, including through their approximately $20 billion of wealth-focused BDC offerings. We've had recent success with our own non-traded BDCs, including placements with RIAs and with a large traditional distribution platforms. And we're looking forward to leveraging our shared expertise and expanded network to grow our combined franchises even further after closing.
Our acquisition of Preqin brings leading capabilities in private market data to our technology platform and now triples our desktop reach to more than 300,000 users. We believe this acquisition enriches growth potential, not only for BlackRock private markets and technology franchises, but for the entire private market industry as a whole.
Growth is diversified across our Aladdin franchise as clients are increasingly choosing to leverage the integrated capabilities of our public private market workflow and data offerings. It's more important than ever for our clients to have a clear unified view of their portfolio from the building blocks of asset allocation to the minutia of trade execution and accounting. Aladdin recently went live with our first client in Korea, adding to our scaled relationships with leading institutions around the world. And looking ahead, we see more opportunity to expand our relationships with Preqin's more than 4,400 clients.
BlackRock is a global firm, but one that operates hyper locally. We connect our clients across regions to both local and global to capital markets. The US investment opportunity set is still going to be very relevant. We see our role outside the United States to both help our clients understand dynamics of the United States markets and enabling them to channel investments into their own capital markets.
Strong local capital markets underpin the development of each and every country's robust retirement system. BlackRock is partnering with governments and sovereign wealth funds in these efforts. In India, we expect our joint venture with Jio BlackRock to launch later this year, subject to regulatory approvals. We believe we can transform access to investing for Indians, ultimately contributing to the development of our retirement system and a better financial future for each and every of our clients in India.
In Saudi Arabia, we launched an investment management platform to partner with the public investment fund to drive capital into the local markets. It's managed by a dedicated BlackRock team in Riyadh. We're also working in the Kingdom to help develop a mortgage-backed securities market, an establishment of a secondary market for mortgage loans, which should help banks lower the cost of mortgages and home mortgages becoming more accessible for citizens in the Kingdom.
In Europe, we are making it easier for more and more people to shift from savings to investing through ETFs and digital-first offerings. Our European ETF platform crossed over $1 trillion for the first time this quarter and is well positioned for the future with approximately 40% market share by AUM. And the European ETF market has opened in 2025 with record demand. iShares European net inflows have more than doubled compared to the flows at this time last year.
BlackRock iShares is well positioned to capture significant upside in the coming years with our leading platform and diversified offering. We continue to innovate new products and new uses and recently brought our Bitcoin ETF to Europe. This builds on the success of our Bitcoin ETF launch in the United States last year and Canada in January. They continue to gain adoption with another $3 billion of net inflows in the first quarter.
We see large opportunities for growth in digital assets and more broadly for blockchain and tokenization technology. Digital assets drove cash management net inflows this quarter as we continue to manage cash-based reserves through our relationship with Circle. And BlackRock tokenized digital liquidity fund available on a public blockchain became the first Wall Street issued fund to cross over $1 billion in AUM and just recently surpassed $2 billion. BlackRock will continue to look for ways to push on-chain finance forward as part of our leadership in financial technology and innovation and in data.
BlackRock's global scale, our relationships worldwide and locally and our industry-leading technology has made us the first call for more clients and more partnerships than any other time. They are seeking BlackRock to have conversations, it's not about the TikTok at any one single day of the market. They're looking to us to talk to them on long-term trends, working with them to help them design a portfolio that can be leading them for better futures.
We're not a transactional organization. BlackRock has always remained to be focused on the long term with consistency, always there with capital. With corporations, we often have relationships at going back decades as long-term investors in their debt and their equity. And through our financial markets advisory practice, we're the adviser of choice that governments, central banks and other public and private capital market participants turn to when they need frameworks to support their economy and their capital liquidity.
Since the financial crisis, FMA has been more trusted to counsel the Fed, governments of Greece in Ireland and Bank of Canada and so many others. We have a long history of providing guidance on practical targeted monetary and fiscal solutions in support of the global economy. We will continue to work with clients -- we will continue to work with governments around the world to help them navigate develops in the economies and help them build out the global capital markets.
I'd note that the market downturn this year is different from what we've seen in other shocks since the financial crisis. We do not see systemic risks. That there is not a pandemic. The financial system has shown it's safe and sound and the resiliency of the market of trading more volume with the liquidity than any other time. With all this volatility, the markets have proven to be quite successful and worked quite well.
Obviously, there's near-term uncertainty, but the big macro trends that were in place 80 days ago, actually are still around. I know it's hard to believe only 80 days ago, but the mega forces like artificial intelligence, surging demand for global infrastructure, and an ongoing evolution of debt financing presents transformative investment opportunities. Build-outs of data centers and energy, the need for power grids in semiconductor plants, and other infrastructure are beginning and are going to be growing dramatically over the coming years. Obviously, more policy clarity will help this uncertainty, but I remain very optimistic about the capital coming into the markets over the long term.
I want to end by saying that I believe that we are in a better position -- better prepared today to meet our client demand at BlackRock than ever before. This is reflective of our depth, the quality of our dialogue and the deepness of our relationships, and the length of our relationships with our clients worldwide. We are having the most -- the highest quality of conversations with our clients worldwide here in the United States than ever before.
Actually, in markets like today, clients are putting even a greater premium on BlackRock and the differentiating value proposition that BlackRock can offer them. We have remained in good times and bad times, their trusted partner. I'd like to thank our employees for their steadfast focus on delivering for our clients and driving value for our shareholders. Once again, we're very proud that BlackRock generated 6% organic base fee growth against this very complex market backdrop, driven by categories that we've only invested in recent years like -- and the structural long-term growers like infrastructure, like ETFs, and like systematic equities.
We lead with a growth mindset. We lead with optimism. Long-term winners don't get bogged down in the pessimism. They break down barriers to find solutions to help build that optimism with each and every client over the long run. We try to see through the pessimism of the short run, and that is exactly what we are doing, and we're excited for the opportunity to do great work beyond today and tomorrow, throughout 2025 and going forward in the coming years ahead. I want to thank everybody.
So operator, let's open it up for questions.

Question and Answer Session

Operator

(Operator Instructions) Michael Cyprys, Morgan Stanley.

Michael Cyprys

Maybe just given so much going on around the world, maybe just starting off with the current backdrop. Curious in your conversations with clients, are you getting any sort of sense of how retail and institutional allocations may shift as we look forward from here? And how are clients approaching their decision-making in this current backdrop? Thank you.

Laurence Fink

So Michael, we have not seen any capitulation with any clients at all. Obviously, we're spending a lot of time with our retail investors. We're seeing -- we've seen an elevated increase in April, which is an unusual time to see elevated increases in cash. We had $20 billion in inflows this month alone in cash. But let's be clear, there's over $12 trillion in money market funds. So there is a huge reserve of money that will be put to work in the future.
We're having a lot of conversations related to fixed income. And you think about as a yield curve steepens and we are a big believer of the yield curve is going to continue to steepen, in the coming months, as the yield curve continues to steepen, we're probably going to see more people extend out. And it represents more opportunities. And if you now go out the yield curve and then look at where private credit is trading that you're going to be able to earn 8%-ish or even more today. And so with all this market uncertainty, A, these are not bad places to put for an intermediate period of time where you would be putting your money.
That being said, we have not seen one true capitulation with one client in equities. Actually, in most cases, more and more our clients are saying, hey, should we be -- when do we come in and buy more equities? Obviously, a lot of people think at this time, you don't buy the dip.
But I would say the one thing of caution is, over the last 15 years, we've seen a broadening of interest in the US capital markets. We saw the US capital markets represent 75% of the total value of the world capital markets. As Europe is now finally focused on growing instead of controlling, could Europe become a new -- a better destination for capital? Are there other areas where you could see reallocations? We, as a country, benefited by the huge reallocation and overallocation in US markets.
Are we going to see a systematic reallocation into other parts of the world? We have not seen that yet, but that's a good question to be raising as people are starting to believe that Europe might -- is might, for the first time in many years, focusing on growth, not containment. And so more questions are being asked, but I think the dominant area where we're seeing conversations are, should -- is this a time to go out the curve and fix income this is the time? When is this time to add more equity exposure?
And then I would also say very clearly, there has been no change in client demand for infrastructure. If anything, the demand for infrastructure strategies that can throw off mid-teen returns over -- that can be a great protector of inflationary pressures over the long run. The opportunity in infrastructure probably is as great as any other time that we've seen. The one thing that we are seeing that I think is differentiated with most other asset managers, our systematic equity team that has had great performance even now. We continue to see large interest and consistent inflows.
We saw inflows in systematic equities in the first quarter and our conversations that, in some cases, moving out of fundamental equities into systematic equity is certainly the conversation to be had. But I would say it's too early to see any major wholesale changes by any major client base.

Operator

Craig Siegenthaler, Bank of America

Craig Siegenthaler

So there's a lot to talk about these days, but I wanted to come back to some comments that you made in your annual letter around private markets entering the retail channel. So given that BlackRock is one of the largest 401(k) managers and is the largest DCIO manager, where are you in the build-out of adding private into either existing target date funds or launching new target date funds that have a significant allocation of private And are you really just waiting on guidance or actual rulemaking from the Department of Labor before you move forward?

Laurence Fink

Let me just talk on one thing. This is one of the main reasons why we bought Preqin, and why I believe Preqin will become a major component for the whole ecosystem, I said that in my prepared remarks. To properly add, especially in retirement products, more private investment, I believe better data analytics that will create better transparency, better price discovery is going to be necessary.
And this is why we believe in what we are doing in the Aladdin space with eFront, Preqin is going to be a major component of the changing ecosystem in retirement, and I'll let Martin get into the specifics of what we're doing at BlackRock related to those type of products.

Martin Small

So Craig, you've got it. BlackRock is the number one investment-only firm, the number one DCIO firm, and we're a top five private markets and alts manager, following our recent acquisitions. So we have the investment content. We have the franchise. We have a $500 billion AUM target date business.
And Larry talked about it in his letter, but we see real potential benefits to retirees in greater diversification and better retirement outcomes through the blending of public and private markets. We have a real strong presence in both retirement channels and private markets, relationships, distribution, investment opportunities.
So a couple of things. One, we have developed the glide path technology to create a target-date style product in terms of allocations and moving allocations across public and private markets to think about growth potential and liquidity in target date style. So we have the glide path technology in order to implement those portfolios.
We are launching and have plans to launch in the middle of the year, a target date style offering with private markets, on a retirement platform, one of the larger trust companies in the United States. So we look forward to being able to update you about that later in the year.
So we see a target date, really, Craig, as the most efficient way to deliver private markets into retirement counts, particularly defined contribution, because this approach would embed these exposures in allocations already made by target funds. So it's got to be target funds, balanced funds or managed accounts. We see that as the most efficient way of doing it.
Those are the types of vehicles that serve as the qualified default investment alternative for the QDIA, and they capture the bulk of 401(k) flows and participant-directed individual accounts. We do think for the opportunity to be really broad, really scalable and the most tangible. We'd likely need to see litigation reform or at least some advice reform in the US to add private markets disclosure into DC plans.
We have innovated, we've advocated on behalf of workers for improved retirement solutions and national initiatives to modernize retirement. Just this past quarter, we hosted a large group of policymakers and members of Congress to discuss retirement at a BlackRock Retirement Summit in Washington, DC that was very successful. This was one of the topics that we discussed.
So if there's an opportunity to make private markets more accessible in the retirement channel, our plan is to be at the forefront.

Operator

Alex Blostein, Goldman Sachs.

Alex Blostein

Question for you guys a little bit more strategically in -- when I sort of think about periods of prior major market dislocations, BlackRock made some real kind of monumental changes to the business. GFC obviously comes to mind with iShares acquisition. And while I know you made a big bet on private markets today, as I sort of think about ahead and any other major changes that are yet to come from markets and it sounds like US decoupling from the rest of the world in terms of cap markets is top of mind for you guys. Does that mean BlackRock might need to get even larger outside the US? Does that mean that BlackRock might need to pursue larger acquisitions outside the US? Or how are you thinking about the sort of period disruption relative to your longer-term strategy versus other periods?

Laurence Fink

Great question, Alex. So let me just say, A, the answer is no, if related to any acquisitions, that's not the end of the world. Our relationship with the governments across the world is giving us a real opportunity. I talked about what we're doing in India and building out that market. We're very excited about that opportunity in India.
We have a couple of announcements of partnerships with other organizations in LatAm that we're working on. So it's strategically partnering with our long-term clients. In addition, if you just look at our position in Europe with ETFs, with 40% market share in iShares. And then our -- as I said in my prepared remarks, I was in Europe last week. The conversations we're having, let's say, in Netherlands, as they move away from defined benefits to defined contribution, the opportunities we have there in working with all these different plans, sponsors, and the major pension plans there.
But across the board, our acquisition would be part of the consortium of Viridium really gives us a unique opportunity in the insurance space and managing insurance assets in Germany and other parts of Europe. Working in Australia, where I was earlier this year, the opportunity we have with GIP and the opportunities we have in infrastructure across the board. I think, as you know, GIP acquired all the airports in Malaysia. And so if anything, our footprint continues to grow. We are now in 30 different countries with offices. And I would say by year-end, we maybe be as large as 34, 35 different countries. We will be shortly announcing three new countries where we're opening our offices.
We actually manage money for -- in 100 different countries for our clients worldwide. So if anything, by helping countries navigate changes in their retirement system like DB to DC, by helping countries begin retirement system like India or beginning a mortgage-backed security system like in Saudi Arabia, and then continue to have a footprint. No firm is in the position to have these business -- this footprint in so many different parts of the world. If anything, this has been one of our great features, which I think in many cases, has been totally underappreciated, how deeply engaged we are and how deeply local we are within so many countries.
And the one thing that we talk about across the board as one of the largest shareholders of companies worldwide, our relationships are not transactional. We are working with the pension fund communities. We're working with all the major corporations in all the different countries. And it gives us a differentiated position with -- one of the big reasons I said in the prepared remarks, related to the port transaction, our long-term relationship with CK Hutchison is it just gives us the ability to understand the client better.
And so I actually believe that with this type of uncertainty, with this type of volatility, with this type of sometimes chaos that we're seeing, if anything, the degree of BlackRock's consistency that we could bring to each and every client has allowed us to have a broadening conversation.
Martin, do you want to add to anything?

Martin Small

No. I guess that was it.

Operator

Mike Brown, Wells Fargo Securities.

Mike Brown

Lots of good color here on the international footprint and key strengths of the franchise there. But I just wanted to ask about the growing frictions between the US and other countries. Are you worried about the risk of some assets potentially moving away from the US in general? And is there any risk you think of any backlash to BlackRock, specifically as a US headquartered manager?

Laurence Fink

Great question. As I said in my prepared remarks, we are Mexican in Mexico, Canadian in Canada, Dutch in Netherlands, British in the UK, Irish in Ireland, Japanese in Japan. This is not something new. This is something that we started this type of emphasis 37 years ago. The whole foundation of BlackRock.
Our first client worldwide was a Japanese client. It was not a US client. And we have systematically made sure that we remain local, vibrant, and a part of each and every economy. And that's what we're trying to do.
And that's why we're going to be opening a few more offices that we're going to announce shortly to be even more local in these different areas where we have large client relationships. And so -- there is no question, as I also said in my prepared remarks that when you think about the growth of the US capital markets representing 75% of the totality of the global capital markets, and it used to be around 50%, 55%.
Could we see -- could what the European leaders are doing that are now unlocking growth instead of containing growth, could this be a time where people should be reallocating back or at least be in a market -- most clients underinvested in Europe. Is this a time to at least have a market waiting in Europe? Or is this a time to have a market overweight?
And you could say this about many other areas. So we're not -- our job is to be working with each and every client. A lot of it is going to be on relative evaluation. But as I said in my prepared remarks, 80 days ago, everyone talked about US supremacy, the vitality of the United States. That was a major conversations even in Davos 80 days ago about the strength of the US.
That is not a conversation that has been having now, but as I said in my prepared remarks, the macro forces of AI of infrastructure is just as strong today as it was 80 days ago and all the other macro trends. I do believe when the Trump administration works on their growth initiatives that they've talked about, the deregulation, the simplification of permits. And I hope the same thing happens in Europe. That is going to unlock an amazing amount of private capital.
And this is why we put such an emphasis in infrastructure and private credit. We will be prepared when there is an unlocking of more private capital to invest in infrastructure and data centers and airports, in grids, and in power. And so all of this remains. I know it's been obscured by the conversations with tariffs, been obscure about all the other issues going around but the macro mega trends have not changed. And as I said, if Europe is focused on growth, that is a great added opportunity that we didn't see 80 days ago.
If other parts of the world are focusing on their own growth in addition to the growth that we see in the United States, this will be fine. In the short run, yes, we do have inflationary pressures. Yes, in the short run we have an economy that is at risk. But my long-term views have not changed at all despite all the short-term fears.

Christopher Meade

I want to expand on just one point that Larry has made that I think Mike goes to your question, but also maybe a little bit to Alex's prior question, which is if you were to take the page 5 of our supplement and look at the revenue weighted composite indexes for BlackRock AUM, you'd see BlackRock has a lot of positive leverage to growing stock markets outside of the United States. That generally tends to be good for our business. It tends to be fee rate accretive to our business. And so, we believe in helping countries grow their capital markets, and we see those opportunities of improved capital markets performance outside of the United States as being very much aligned with our financial growth.

Operator

Patrick Davitt, Autonomous Research.

Patrick Davitt

Just a follow-up on the alts and 401(k) discussion on the demand side of things. Could you expand on what you're actually hearing from the plans in terms of demand for these products? So if we do get that legal Safe Harbor, could there be a quick uptake? Or do you think it will be a slower build once you get that green light?

Martin Small

Thanks, Patrick, for the question. So I would segment the market basically into, I'll say, three main categories. The first of which would be large plan sponsors. Large plan sponsors move very slowly. They have consultants. They're very prudent and take time. That's not where we're seeing rapid growth or rapid interest at this point. I would say mid-tier plan sponsors are more interested and the smaller plan sponsors are most interested in building these types of portfolios.
In addition, what I'd say is platforms, right? The platforms that are trust companies, retirement platforms, registered investment advisers that do advisers sold 401(k) business, they all have high degrees of interest in being able to offer these types of products to their clients.
So I would expect, among the largest 401(k) plan sponsors that our consultant intermediated that carry heavy amounts of fiduciary scrutiny. They're going to be the slowest to move. And as you move down into adviser sold, they'll be the fastest to move. So we're seeing a great amount of velocity down in that bottom part, and I mentioned earlier that the trust company that we'd be working with, this would be one of the places we'd see as a first mover. Of course, you'll still need to see how pricing comes through, how operations come through.
But I think those things can be done in a shorter period than we did LifePath Paycheck, which took multiple years. This, I think, can be done faster than that because it can be done largely through allocations to funds inside of target date funds that are already themselves asset allocation vehicles.

Operator

Dan Fannon, Jefferies.

Dan Fannon

So Martin, several moving parts on the exit fee rates. I was hoping you could discuss the outlook for your fee rate based on client demand trends and some of the growth. And also this quarter, Vanguard made some splashy news with cutting of fees. Can you talk about the competitive backdrop within the ETF market today and how you may or may not respond to those changes?

Martin Small

Thanks, Dan. On the fee rate, I'd start by saying we generated 6% annualized base fee growth in the quarter, and organic base fee growth is above target over the last 12 months. This is our third consecutive quarter at or above our through-the-cycle organic base fee target of 6%. So we are continuing a very solid trend of growing revenues and operating income and expanding margin.
As I mentioned in my remarks, on a day count equivalent basis, the annualized effective fee rate was approximately 1/10 of a basis points higher sequentially. That's due to continued growth in fundraising within private markets. We had about $84 million in catch-up fees in Q1, which increased $60 million kind of quarter on quarter. We've now seen two successive quarters with sequential fee rate increases and our fee rate is 5% higher than it was six months ago, and that's even against market and FX headwinds. And later in 2025, we expect to add the fee rate accretive assets of HPS. So I expect you'll see much of the same effect you saw post the GIP transaction.
Excluding the catch-up fees and including the impact of markets and FX towards the second half of the year, you'll note we ended with spot assets lower than average assets. We entered the second quarter with base fees approximately 1% lower other than the first quarter. As I've always said, BlackRock's AUM base, the fee rate, it's a backward-looking output of the mix of the stock of assets on the platform, and the net new flows. It's primarily affected by beta and FX but also by organic growth.
As I mentioned, we'd expect to see positive leverage to base fee revenue, average fee rates on organic growth over time as we grow our private markets business. And we see really excellent velocity in private markets fundraising. And again, we expect to add HPS in the latter half of the year.
Just on iShares pricing. Our pricing strategy is the same and hasn't changed. We made targeted price investments in high-growth categories where clients are price sensitive, and we can expect to earn back foregone revenue through volumes.
Our historical levels of pricing investment have been about 1.5% to 2.5% of global iShares revenue. We've definitely been well below that in recent years. We made no ETF price changes in the first quarter. We've always discussed the ETF business having multiple different segments where clients evaluate price relative to many different objectives and see a different value proposition in superior indexes or liquidity, capital markets expertise. And again, in the first quarter, we had $107 billion of ETF flows that's running -- that's following a $390 billion flow year, which was a record in '24.
So we're annualizing at a 10% higher rate already on ETFs. So we feel very comfortable with our positioning there.

Operator

Thank you. Ladies and gentlemen, we have reached the allotted time for our questions. Mr. Fink, do you have any closing remarks?

Laurence Fink

Yes. Thank you, operator. I want to thank everybody for joining us this morning and your continued interest in BlackRock. Our first quarter results are possible, thanks to the growth of our strategic investments that we made over the coming last years, powered through our integrated asset management and technology platform. We welcome our new colleagues from Preqin this quarter, and we look forward to our planned closing HPS later this year.
More than ever, we're seeing closer to our clients than ever before at each and every client and wherever they are located. And we believe BlackRock today has a strong upside for our shareholders in any other time. I want to just thank everybody and have a calm second quarter. Thanks.

Operator

That concludes today's teleconference. You may now disconnect.