Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2019

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis

June 30, 2019 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Investments Measured at NAV⁽¹⁾		Other⁽²⁾		June 30, 2019
Assets:
Investments:
Debt securities:
Held-to-maturity securities	$	—	$	—	$	—	$	—	$	213	$	213
Trading securities		—		178		2		—		—		180
Total debt securities		—		178		2		—		213		393
Equity securities at FVTNI:
Deferred compensation plan mutual funds		22		—		—		—		—		22
Equity securities/Multi-asset mutual funds		515		—		—		—		—		515
Total equity securities at FVTNI		537		—		—		—		—		537
Equity method:
Equity and fixed income mutual funds		140		—		—		16		—		156
Other		42		—		—		645		3		690
Total equity method		182		—		—		661		3		846
Federal Reserve Bank Stock		—		—		—		—		93		93
Carried interest		—		—		—		—		12		12
Other investments⁽³⁾		—		—		—		—		108		108
Total investments		719		178		2		661		429		1,989
Investments of consolidated VIEs:
Trading debt securities		—		939		—		—		—		939
Equity securities at FVTNI		736		—		—		—		—		736
Bank loans		—		20		125		—		—		145
Private equity⁽⁴⁾		—		—		9		33		78		120
Other		—		—		—		62		—		62
Carried interest		—		—		—		—		429		429
Total investments of consolidated VIEs		736		959		134		95		507		2,431
Other assets⁽⁵⁾		168		—		—		—		—		168
Separate account assets		69,029		27,001		—		—		777		96,807
Separate account collateral held under securities lending agreements:
Equity securities		12,113		—		—		—		—		12,113
Debt securities		—		6,333		—		—		—		6,333
Total separate account collateral held under securities lending agreements		12,113		6,333		—		—		—		18,446
Total	$	82,765	$	34,471	$	136	$	756	$	1,713	$	119,841
Liabilities:
Borrowings of consolidated VIEs⁽⁶⁾	$	—	$	—	$	142	$	—	$	—	$	142
Separate account collateral liabilities under securities lending agreements		12,113		6,333		—		—		—		18,446
Other liabilities⁽⁷⁾		—		7		168		—		—		175
Total	$	12,113	$	6,340	$	310	$	—	$	—	$	18,763

⁽¹⁾	^{Amounts are comprised of certain investments measured at fair value using NAV (or its equivalent) as a practical expedient.}

⁽²⁾

^{Amounts are comprised of investments held at cost, adjusted for observable price changes, investments held at amortized cost, carried interest and certain equity method investments, which include sponsored investment funds and other assets, which are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and liabilities under fair value measures; therefore, the Company’s investment in such equity method investees may not represent fair value.}

⁽³⁾	^{Amount includes $60 million of nonmarketable equity security, which due to observable price change, was revalued during the three months ended June 30, 2019 (a Level 2 input).}

⁽⁴⁾	^{Level 3 amounts primarily include direct investments in private equity companies held by private equity funds.}

⁽⁵⁾	^{Amount includes a minority investment in a publicly traded company.}

⁽⁶⁾	^{Borrowings of consolidated VIEs are classified based on significance of unobservable inputs, used for calculating the fair value of consolidated CLO assets.}

⁽⁷⁾	^{Amounts primarily include contingent liabilities related to certain acquisitions (see Note 14, Commitments and Contingencies, for more information).}

Assets and liabilities measured at fair value on a recurring basis

December 31, 2018 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Investments Measured at NAV⁽¹⁾		Other⁽²⁾		December 31, 2018
Assets:
Investments:
Debt securities:
Held-to-maturity securities	$	—	$	—	$	—	$	—	$	188	$	188
Trading securities		—		261		4		—		—		265
Total debt securities		—		261		4		—		188		453
Equity securities at FVTNI:
Deferred compensation plan mutual funds		34		—		—		—		—		34
Equity securities/Multi-asset mutual funds		418		—		—		—		—		418
Total equity securities at FVTNI		452		—		—		—		—		452
Equity method:
Equity and fixed income mutual funds		122		—		—		14		—		136
Other		—		—		—		642		3		645
Total equity method		122		—		—		656		3		781
Federal Reserve Bank Stock		—		—		—		—		92		92
Carried interest		—		—		—		—		18		18
Total investments		574		261		4		656		301		1,796
Investments of consolidated VIEs:
Trading debt securities		—		1,395		—		—		—		1,395
Equity securities at FVTNI		569		—		—		—		—		569
Bank loans		—		14		70		—		—		84
Private equity⁽³⁾		—		—		82		48		75		205
Other		—		—		—		58		—		58
Carried interest		—		—		—		—		369		369
Total investments of consolidated VIEs		569		1,409		152		106		444		2,680
Other assets⁽⁴⁾		122		—		—		—		—		122
Separate account assets		63,610		25,810		—		—		865		90,285
Separate account collateral held under securities lending agreements:
Equity securities		15,066		—		—		—		—		15,066
Debt securities		—		5,589		—		—		—		5,589
Total separate account collateral held under securities lending agreements		15,066		5,589		—		—		—		20,655
Total	$	79,941	$	33,069	$	156	$	762	$	1,610	$	115,538
Liabilities:
Borrowings of consolidated VIEs⁽⁵⁾	$	—	$	—	$	84	$	—	$	—	$	84
Separate account collateral liabilities under securities lending agreements		15,066		5,589		—		—		—		20,655
Other liabilities⁽⁶⁾		—		6		287		—		—		293
Total	$	15,066	$	5,595	$	371	$	—	$	—	$	21,032

⁽¹⁾	^{Amounts are comprised of certain investments measured at fair value using NAV (or its equivalent) as a practical expedient.}

⁽²⁾

^{Amounts are comprised of investments held at cost or amortized cost, carried interest and certain equity method investments, which include sponsored investment funds and other assets, which are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and liabilities under fair value measures; therefore, the Company’s investment in such equity method investees may not represent fair value.}

⁽³⁾	^{Level 3 amounts include direct investments in private equity companies held by private equity funds.}

⁽⁴⁾	^{Amount includes a minority investment in a publicly traded company.}

⁽⁵⁾	^{Borrowings of consolidated VIEs are classified based on significance of unobservable inputs, used for calculating the fair value of consolidated CLO assets.}

⁽⁶⁾	^{Amounts primarily include contingent liabilities related to certain acquisitions (see Note 14, Commitments and Contingencies, for more information).}

Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended June 30, 2019

(in millions)	March 31, 2019		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities		Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3		June 30, 2019		Total Net Unrealized Gains (Losses) Included in Earnings⁽²⁾
Assets:
Investments:
Debt securities:
Trading	$	—	$	—		$	2	$	—	$	—		$	—	$	—	$	2
Total investments		—		—			2		—		—			—		—		2
Assets of consolidated VIEs:
Bank loans⁽³⁾		123		—			2		—		—			—		—		125
Private equity		10		(1	)		—		—		—			—		—		9		(1	)
Total Assets of consolidated VIEs		133		(1	)		2		—		—			—		—		134		(1	)
Total Level 3 assets	$	133	$	(1	)	$	4	$	—	$	—		$	—	$	—	$	136	$	(1	)
Liabilities:
Borrowings of consolidated VIEs⁽³⁾	$	134	$	—		$	—	$	—	$	8		$	—	$	—	$	142	$	—
Other liabilities⁽⁴⁾		275		(13	)		—		—		(120	)		—		—		168		(13	)
Total Level 3 liabilities	$	409	$	(13	)	$	—	$	—	$	(112	)	$	—	$	—	$	310	$	(13	)

⁽¹⁾	^{Amounts include proceeds from borrowings of a consolidated CLO and contingent liability payments in connection with certain prior acquisitions.}

⁽²⁾	^{Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.}

⁽³⁾	^{Bank loans and borrowings of consolidated VIEs amounts are related to the consolidated CLO.}

⁽⁴⁾	^{Amounts include contingent liabilities in connection with certain acquisitions.}

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended June 30, 2019

(in millions)	December 31, 2018		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities		Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3⁽²⁾			June 30, 2019		Total Net Unrealized Gains (Losses) Included in Earnings⁽³⁾
Assets:
Investments:
Debt securities:
Trading	$	4	$	—		$	2	$	—	$	—		$	—	$	(4	)	$	2
Total investments		4		—			2		—		—			—		(4	)		2
Assets of consolidated VIEs:
Bank loans⁽⁴⁾		70		—			55		—		—			—		—			125
Private equity		82		(1	)		—		—		—			—		(72	)		9		(1	)
Total Assets of consolidated VIEs		152		(1	)		55		—		—			—		(72	)		134		(1	)
Total Level 3 assets	$	156	$	(1	)	$	57	$	—	$	—		$	—	$	(76	)	$	136	$	(1	)
Liabilities:
Borrowings of consolidated VIEs⁽⁴⁾	$	84	$	—		$	—	$	—	$	58		$	—	$	—		$	142	$	—
Other liabilities⁽⁵⁾		287		(19	)		—		—		(138	)		—		—			168		(19	)
Total Level 3 liabilities	$	371	$	(19	)	$	—	$	—	$	(80	)	$	—	$	—		$	310	$	(19	)

⁽¹⁾	^{Amounts include proceeds from borrowings of a consolidated CLO and contingent liability payments in connection with certain prior acquisitions.}

⁽²⁾	^{Amounts include an investment in a consolidated entity that no longer qualifies as an investment company and is no longer accounted for under a fair value measure.}

⁽³⁾	^{Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.}

⁽⁴⁾	^{Bank loans and borrowings of consolidated VIEs amounts are related to the consolidated CLO.}

⁽⁵⁾	^{Amounts include contingent liabilities in connection with certain acquisitions.}

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended June 30, 2018

(in millions)	March 31, 2018		Realized and Unrealized Gains (Losses)		Purchases		Sales and Maturities			Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3			June 30, 2018		Total Net Unrealized Gains (Losses) Included in Earnings⁽²⁾
Assets:
Investments:
Debt securities:
Available-for-sale securities⁽³⁾	$	26	$	—	$	—	$	—		$	—		$	—	$	(26	)	$	—
Trading		5		—		—		—			—			—		(5	)		—
Total investments		31		—		—		—			—			—		(31	)		—
Assets of consolidated VIEs - Private equity		116		—		—		(12	)		—			—		—			104
Total Level 3 assets	$	147	$	—	$	—	$	(12	)	$	—		$	—	$	(31	)	$	104	$	—
Liabilities:
Other liabilities⁽⁴⁾	$	242	$	3	$	—	$	—		$	(16	)	$	—	$	—		$	223	$	3

⁽¹⁾	^{Issuances and other settlements amount includes payment of a contingent liability in connection with a certain acquisition}

⁽²⁾	^{Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.}

⁽³⁾	^{Amounts include investments in CLOs.}

⁽⁴⁾	^{Amounts include contingent liabilities in connection with certain acquisitions.}

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended June 30, 2018

(in millions)	December 31, 2017		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3			June 30, 2018		Total Net Unrealized Gains (Losses) Included in Earnings⁽²⁾
Assets:
Investments:
Available-for-sale securities⁽³⁾	$	—	$	—		$	26	$	—		$	—		$	—	$	(26	)	$	—
Trading		—		—			5		—			—			—		(5	)		—
Total investments		—		—			31		—			—			—		(31	)		—
Assets of consolidated VIEs - Private equity		116		—			—		(12	)		—			—		—			104
Total Level 3 assets	$	116	$	—		$	31	$	(12	)	$	—		$	—	$	(31	)	$	104	$	—
Liabilities:
Other liabilities⁽⁴⁾	$	236	$	(3	)	$	—	$	—		$	(16	)	$	—	$	—		$	223	$	(3	)

⁽¹⁾	^{Issuances and other settlements amount includes payment of a contingent liability in connection with a certain acquisition.}

⁽²⁾	^{Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.}

⁽³⁾	^{Amounts include investments in CLOs.}

⁽⁴⁾	^{Amounts include contingent liabilities in connection with certain acquisitions.}

Fair Value of Financial Assets and Financial Liabilities

Disclosures of Fair Value for Financial Instruments Not Held at Fair Value. At June 30, 2019 and December 31, 2018, the fair value of the Company’s financial instruments not held at fair value are categorized in the table below:

	June 30, 2019				December 31, 2018
(in millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Fair Value Hierarchy
Financial Assets⁽¹⁾:
Cash and cash equivalents	$	3,920	$	3,920	$	6,302	$	6,302	Level 1	^{(2) (3)}
Cash and cash equivalents of consolidated VIEs	$	103	$	103	$	186	$	186	Level 1	^{(2) (3)}
Other assets	$	63	$	63	$	18	$	18	Level 1	^{(2) (4)}

Financial Liabilities:
Long-term borrowings	$	5,964	$	6,257	$	4,979	$	5,034	Level 2	⁽⁵⁾

⁽¹⁾	See Note 5, Investments, for further information on investments not held at fair value.

⁽²⁾	Cash and cash equivalents are carried at either cost or amortized cost, which approximates fair value due to their short-term maturities.

⁽³⁾

At June 30, 2019 and December 31, 2018, approximately $371 million and $173 million, respectively, of money market funds were recorded within cash and cash equivalents on the condensed consolidated statements of financial condition. In addition, at June 30, 2019 and December 31, 2018, approximately $13 million and $7 million, respectively, of money market funds were recorded within cash and cash equivalents of consolidated VIEs. Money market funds are valued based on quoted market prices, or $1.00 per share, which generally is the NAV of the fund.

⁽⁴⁾	Other assets include restricted cash and cash collateral deposited with certain derivative counterparties. The carrying values of other assets approximates fair value, due to their short-term maturities.

⁽⁵⁾

Long-term borrowings are recorded at amortized cost net of debt issuance costs. The fair value of the long-term borrowings, including the current portion of long-term borrowings, is determined using market prices at the end of June 2019 and December 2018, respectively. See Note 13, Borrowings, for the fair value of each of the Company’s long-term borrowings.

Investments in Certain Entities that Calculate Net Asset Value per Share

The following tables list information regarding all investments that use a fair value measurement to account for both their financial assets and financial liabilities in their calculation of a NAV per share (or equivalent).

June 30, 2019

(in millions)

Ref

Fair Value

Total

Unfunded

Commitments

Redemption

Frequency

Redemption

Notice Period

Equity method:⁽¹⁾

Hedge funds/funds of hedge funds

(a)

188

Daily/Monthly (27%)

Quarterly (20%)

N/R (53%)

1 – 90 days

Private equity funds

(b)

123

349

N/R

Real assets funds

(c)

334

142

Quarterly (64%)

N/R (36%)

60 days

Other

Daily/Monthly (73%)

N/R (27%)

3 – 5 days

Consolidated VIEs:

Private equity funds of funds

(d)

N/R

Hedge fund

(a)

—

Quarterly

90 days

Real assets funds

(c)

N/R

Total

756

608

December 31, 2018

(in millions)

Ref

Fair Value

Total

Unfunded

Commitments

Redemption

Frequency

Redemption

Notice Period

Equity method:⁽¹⁾

Hedge funds/funds of hedge funds

(a)

173

Daily/Monthly (30%)

Quarterly (18%)

N/R (52%)

1 – 90 days

Private equity funds

(b)

116

N/R

Real assets funds

(c)

353

Quarterly (68%)

N/R (32%)

60 days

Other

Daily (80%)

N/R (20%)

5 days

Consolidated VIEs:

Private equity funds of funds

(d)

N/R

Hedge fund

(a)

—

Quarterly

90 days

Real assets funds

(c)

N/R

Total

762

343

N/R – not redeemable

⁽¹⁾	^{Comprised of equity method investments, which include investment companies, which account for their financial assets and most financial liabilities under fair value measures; therefore, the Company’s investment in such equity method investees approximates fair value.}

^(a)

^{This category includes hedge funds and funds of hedge funds that invest primarily in equities, fixed income securities, distressed credit, opportunistic and mortgage instruments and other third-party hedge funds. The fair values of the investments have been estimated using the NAV of the Company’s ownership interest in partners’ capital. The liquidation period for the investments in the funds that are not subject to redemption is unknown at both June 30, 2019 and December 31, 2018.}

^(b)

^{This category includes several private equity funds that initially invest in nonmarketable securities of private companies, which ultimately may become public in the future. The fair values of these investments have been estimated using capital accounts representing the Company’s ownership interest in the funds as well as other performance inputs. The Company’s investment in each fund is not subject to redemption and is normally returned through distributions as a result of the liquidation of the underlying assets of the private equity funds. The liquidation period for the investments in these funds is unknown at both June 30, 2019 and December 31, 2018.}

^(c)

This category includes several real assets funds that invest directly and indirectly in real estate or infrastructure. The fair values of the investments have been estimated using capital accounts representing the Company’s ownership interest in the funds. The Company’s investments that are not subject to redemption or are not currently redeemable are normally returned through distributions and realizations of the underlying assets of the funds. The liquidation periods for the investments in the funds that are not subject to redemptions is unknown at both June 30, 2019 and December 31, 2018. The total remaining unfunded commitments to real assets funds were $152 million and $130 million at June 30, 2019 and December 31, 2018, respectively. The Company had contractual obligations to the real assets funds of $145 million at June 30, 2019 and $117 million at December 31, 2018.

^(d)

^{This category includes the underlying third-party private equity funds within consolidated BlackRock sponsored private equity funds of funds. The fair values of the investments in the third-party funds have been estimated using capital accounts representing the Company’s ownership interest in each fund in the portfolio as well as other performance inputs. These investments are not subject to redemption or are not currently redeemable; however, for certain funds, the Company may sell or transfer its interest, which may need approval by the general partner of the underlying funds. Due to the nature of the investments in this category, the Company reduces its investment by distributions that are received through the realization of the underlying assets of the funds. The liquidation period for the underlying assets of these funds is unknown at both June 30, 2019 and December 31, 2018. The total remaining unfunded commitments to other third-party funds were $11 million and $18 million at June 30, 2019 and December 31, 2018, respectively. The Company had contractual obligations to the consolidated funds of $22 million at both June 30, 2019 and December 31, 2018.}

Summary of Information Related to Assets and Liabilities of Consolidated CLO for which Fair Value Option was Elected

The following table summarizes information related to assets and liabilities of a consolidated CLO, recorded within investments and borrowings of consolidated VIEs, respectively, for which the fair value option was elected:

	June 30,		December 31,
(in millions)	2019		2018
CLO Bank loans:
Aggregate principal amounts outstanding	$	145	$	84
Fair value		145		84
Aggregate unpaid principal balance in excess of (less than) fair value	$	—	$	—

CLO Borrowings:
Aggregate principal amounts outstanding	$	142	$	84
Fair value	$	142	$	84