Laurence D. Fink, Chief Financial Officer, Gary S. Shedlin, President, Robert S. Kapito, and General Counsel Christopher J. Meade. All lines are being placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. If you like to ask a question during this time, simply press star and then number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Mr. Meade, you may begin your conference.
Thank you. Good morning, everyone. I'm Christopher J. Meade, the General Counsel of BlackRock. Before we begin, I'd like to remind you that during the course of this call, we may make a number of forward-looking statements. We call your attention to the fact that BlackRock's actual results may, of course, differ from these statements. As you know, BlackRock has filed reports with the SEC, which lists some of the factors that may cause the results of BlackRock to differ materially from what we say today. BlackRock assumes no duty and does not undertake to update any forward-looking statements. With that, I'll turn it over to Gary.
Thanks, Christopher , and good morning, everyone. I hope everyone and their families are remaining safe and healthy. It's my pleasure to present results for the first quarter of 2021. Before I turn it over to Laurence to offer his comments, I'll review our financial performance and business results. While our earnings release discloses both GAAP and as-adjusted financial results, I'll be focusing primarily on our as-adjusted results. BlackRock's platform has been built over time to help clients meet their objectives regardless of market environment or risk appetite. We've invested for years to develop industry-leading franchises in high-growth areas such as ETFs, private markets, technology, and more recently, sustainable investing, so we can help clients construct resilient whole portfolios that leverage both active and index capabilities.
While few of us could have predicted that we would still be confronting the human and economic challenges of the COVID-19 pandemic a year later, the events of the past year have only strengthened our resolve to continue to invest for future growth in order to evolve our business, live our purpose, and meet the needs of all of our stakeholders, including clients, employees, shareholders, and the communities in which we operate. The investments BlackRock has consistently made to build a best-in-class investment and technology platform centered around a fiduciary mindset where clients always come first in a collaborative and unifying one BlackRock culture that encourages emotional ownership, are driving incredible momentum across our entire business.
BlackRock generated record net inflows of $172 billion in the first quarter, our fourth consecutive quarter with over $100 billion in quarterly inflows, representing 8% annualized organic asset growth and 14% annualized organic base fee growth. Strong performance from our entire active franchise once again contributed to this quarter's robust organic fee growth. Over the last 12 months, our broad-based platform, pairing diverse investment capabilities with best-in-class technology and rigorous risk management, has now generated over $525 billion of total net inflows, representing 14% organic base fee growth, well in excess of our 5% long-term target. First quarter revenue of $4.4 billion increased 19% year-over-year, while operating income of $1.5 billion rose 21% and reflected the impact of approximately $180 million of costs associated with the launch of the nearly $5 billion BlackRock Innovation and Growth Trust, our largest closed-end fund ever, in late March.
Earnings per share of $7.77 was up 18% compared to a year ago, also reflecting lower non-operating income and a higher effective tax rate, partially offset by a lower diluted share count in the current quarter. Non-operating results for the quarter included $8 million of net investment income, as gains in our co-investment portfolio were largely offset by the mark-to-market impact of our minority stake in Envestnet. Our as-adjusted tax rate for the first quarter was approximately 21% and included $39 million of discrete tax benefits related to stock-based compensation awards, the best in the first quarter of each year. We continue to estimate that 23% is a reasonable projected tax run rate for the remainder of 2021, though the actual effective tax rate may differ as a consequence of non-recurring or discrete items or potential changes in tax legislation during the year.
First quarter base fee and securities lending revenue of $3.6 billion was up 18% year-over-year, primarily driven by strong organic base fee growth and the positive impact of market beta and foreign exchange movements on average AUM, partially offset by higher discretionary money market fee waivers, lower securities lending revenue, and the effect of one less day in the current quarter, and strategic pricing investments over the last year. Sequentially, base fee and securities lending revenue was up 6%. On an equivalent day count basis, our effective fee rate was essentially flat compared to the fourth quarter, as strong organic base fee growth driven by our higher fee active businesses more than offset higher discretionary money market fee waivers and lower securities lending revenue in the current quarter.
Performance fees of $129 million were up significantly from a year ago, reflecting strong performance in our liquid alternative and long-only investment platforms and the impact of COVID-related market volatility a year ago. Quarterly technology services revenue increased 12% from a year ago. Annual contract value or ACV increased 16% year-over-year, reflecting particularly strong growth from the first quarter of 2020, which was impacted by slower sales and contracting disruption in the early days of the pandemic. We remain committed to low- to mid-teens growth in ACV over the long term. Aladdin's resilience has been a key differentiator throughout the COVID crisis. Client demand remains strong. As Laurence will discuss in more detail, we see a tremendous opportunity to continue building out Aladdin's Climate and sustainability risk analytics and data capabilities, making it central to constructing sustainable portfolios of the future.
Advisory and other revenue was down $33 million year-over-year, primarily reflecting the absence of PennyMac equity method earnings following the charitable contribution of our remaining equity stake in the first quarter of 2020, as well as lower transition management revenue in the current quarter. Total expense increased 17% versus the year-ago quarter, driven primarily by higher compensation, direct fund, and non-core G&A expense. Employee compensation and benefit expense was up 24%, primarily reflecting higher incentive compensation driven by higher operating income and performance fees, and higher deferred compensation reflecting additional grants and the mark-to-market impact of certain deferred compensation programs relative to depressed levels a year ago. Approximately 80% of the increase in our compensation-to-revenue ratio year-over-year was attributable to this mark-to-market impact on certain deferred compensation programs. Direct fund expense increased 16% year-over-year, primarily reflecting higher average index AUM.
G&A expense was up $32 million year-over-year and $111 million sequentially, reflecting approximately $180 million of previously disclosed closed-end fund launch costs. Recall that we exclude the impact of these product launch costs when reporting our as-adjusted operating margin. Year-over-year G&A comparisons were also impacted by approximately $155 million of non-core G&A expense in the first quarter of 2020, which included closed-end fund launch costs, contingent consideration, fair value adjustments, and costs related to certain legal matters. On a core basis, quarterly G&A expense was essentially flat year-over-year as higher portfolio services and technology expense was offset by lower T&E, marketing spends, and professional fees. Quarterly G&A expense also benefited from a delay in planned spending in a number of areas, which we expect to incur over the remainder of the year.
Intangible amortization expense increased $9 million year-over-year as a result of the acquisition of Aperio, which closed on February 1st. Our first quarter as-adjusted operating margin of 44.4% was up 270 basis points from a year ago, benefiting in part from significantly lower levels of non-core G&A expense versus a year ago, and the delayed timing of certain investment spend in the current quarter. As we stated in January, our business has never been better positioned to take advantage of the opportunities before us, and we remain committed to optimizing organic growth in the most efficient way possible. We continue to see numerous opportunities to invest for growth, including sustainable investing, private markets, technology, and China, and intend to pursue these opportunities responsibly.
Our capital management strategy remains first to invest in our business and then to return excess cash to shareholders through a combination of dividends and share repurchases. We continue to invest through prudent use of our balance sheet to best position BlackRock for continued success through seed and co-investments to support organic growth and through tactical M&A and strategic minority investments to accelerate our growth ambitions. During the first quarter, we closed our acquisition of Aperio and, as Laurence will discuss in more detail, announced a partnership with Temasek to co-invest in innovative decarbonization technology. We previously announced a 14% increase in our quarterly dividend to $4.13 per share of common stock and also repurchased $300 million worth of common shares in the first quarter.
While we will remain opportunistic with respect to additional share repurchases during the year, there is no change to the minimum repurchase guidance we provided to you earlier this year. As you will also hear from Laurence, BlackRock has never been better positioned to deliver for clients as we leverage our unique insights, guidance, and solutions to help them meet their long-term investment needs. Record net inflows of $172 billion in the first quarter, including $133 billion of long-term flows, reflect the strength of our broad-based franchise with positive flows across every asset class, investment style, client channel, and region. Our iShares and BlackRock ETFs generated net inflows of $68 billion, representing 10% annualized organic asset and base fee growth. Results highlight the diversity of the product segments within our ETF franchise, with growth led by continued strength in core equity and sustainable ETFs.
We also saw strong flows into our higher-fee , liquid, markets-driven precision exposures as clients continued to re-risk, particularly in international equities, and tactically position their portfolios for the reopening of economies worldwide. First-quarter fixed-income ETF flows of $1.6 billion reflected demand for shorter-term and floating-rate bond exposures, which was largely offset by outflows from longer-duration ETFs, especially LQD, as investors reacted to the most significant steepening in the yield curve since 2013. These inflows, even with the drag from longer duration products, speak to the diversity of our fixed income ETF franchise, which will continue to benefit from strong long-term secular growth. Record retail net inflows of $37 billion, representing 17% annualized organic asset growth and 25% annualized organic base fee growth, were positive in both the U.S. and internationally and across all major asset classes, including fixed income.
Inflows reflected broad-based strength across the entirety of our top-performing active platform, which is well-positioned to capture resurging demand for active equities and investor appetite for yield, where a diversified fixed income range, including unconstrained, high yield, international, and broad market strategies are positioned to meet client demand in any rate environment. BlackRock's institutional active franchise generated $17 billions of net inflows, led by continued growth into our LifePath target date and alternatives platforms. Institutional index net inflows of $11 billion once again reflected equity net outflows, which were more than offset by fixed income net inflows as clients rebalanced portfolios after significant equity market gains or sought to immunize portfolios through LDI strategies. As previously discussed in January, we expect a large U.S. public pension client to transition approximately $55 billions of low fee index assets to another investment manager.
This transition is likely to occur during the second quarter of 2021 and will have a de minimis impact on our organic base fee growth for the year. Across our retail and institutional client businesses, we generated a record $21 billions of active equity net inflows, representing our eighth consecutive quarter of positive flows in this category. Flows were led by top-performing franchises in technology and mid-cap growth, which benefited from the previously mentioned launch of the BlackRock Innovation and Growth Trust. We remain well-positioned for future growth in our active businesses, with over 80% of fundamental active equity, scientific active equity, and taxable fixed income assets performing above their respective benchmarks for peer medians for the trailing five-year period.
Demand for alternatives also continued, with nearly $9 billion of net inflows into liquid and illiquid alternative strategies during the quarter, driven by infrastructure, private equity solutions, and liquid alternatives funds. Fundraising momentum remains strong, and we have approximately $27 billion of committed capital to deploy for institutional clients in a variety of alternative strategies, representing a significant source of future base and performance fees. Finally, BlackRock's cash management platform continued to grow and outperform peers, generating almost $40 billion of net inflows in the first quarter and topping $700 billion in assets under management for the first time.
During the first quarter, we incurred approximately $78 million of gross discretionary yield support waivers and expect such discretionary fee waivers to persist for the near term, especially in light of the recent growth in our US Government Fund franchise and the supply-demand dynamics in the short-dated U.S. Treasury and repo markets. Future levels of discretionary fee waivers will be impacted by several factors, including the level of AUM in funds with existing waivers, gross yields, and competitive positioning. Our strong performance over the last 12 months is a testament to our purpose, the strong execution of our strategy, the confidence our clients place in us, and the hard work, commitment and resilience of our employees. We will continue to invest responsibly from a position of strength to meet the needs of all of our stakeholders over the coming years. With that, I'll turn it over to Laurence.
Thanks, Gary. Good morning to everyone, and I want to thank all of you for joining the call. I hope you and your loved ones are continuing to stay healthy and safe. We are reporting earnings today from our headquarters in New York City, and I'm incredibly energized by being all together as a group, as a team, as partners. I'm cautiously optimistic for a return to normalcy in the coming months as vaccinations roll out, and I'm looking forward to seeing all of our stakeholders in person again. The strong results BlackRock saw this quarter are the outcome of multi-year investments we've made in our asset management and technology platform to better serve our clients worldwide. More than ever before, we are seeing the benefits of these long-term investments resonating. We have stronger results and deeper relationships with clients across their entire portfolios.
We generated $527 billion of net inflows and a record 14% organic base fee growth over the last 12 months, including a very strong 2021. Over a decade ago, we acquired iShares based on our conviction in the value proposition of ETFs. Our continuous investments in our platform since then to help more clients use ETFs to build better portfolios have fueled iShares growth from $385 billion during the acquisition to more than $2.8 trillion today. We began expanding our alternative platform more than five years ago. Today, we manage nearly $200 billion in these strategies for all our clients. Our leadership in alternatives has only just begun. We're seeing momentum accelerate as we scale our offerings, as we source our capabilities, and our integration of data and technology into the management of private market assets.
We've been investing in all aspects of our Aladdin technology to better serve our clients' needs. We saw demand for a unified whole portfolio technology, we enhanced Aladdin with eFront to offer portfolio construction and risk analytic capability in one view across all public and all private markets. We created an end-to-end platform that enables straight-through processing between the asset owners, the asset managers, the custodians through Aladdin Provider. We created Aladdin Wealth to help financial advisors build better portfolios for millions of clients around the world. We recognize the growing impact of sustainability risks and the opportunities on our clients' portfolios. As I will discuss in more detail later on, we are investing to systematically integrate climate and broader sustainable factors across all our investment offerings and risk management processes. We manage over $200 billion in long-term sustainable assets today.
More recently, as wealth clients increasingly focus on the importance of after-tax returns in their investment, we acquired Aperio to enhance BlackRock's ability to meet these clients' needs. The investments we made and continue to make in our platform enable BlackRock to have a holistic perspective and a voice that resonates with our stakeholders. More clients than ever before are turning to BlackRock for insights and for guidance. They want to hear from us on topics such as how to position their portfolios for rising interest rates and inflation, how should they think about the U.S. deficits, how to think about the potential opportunities from new infrastructure policies, and how to invest for a net zero world. We're vocal on issues that are important to our stakeholders, like cultural issues that impact our employees, policies that impact our communities. We speak loudly and work for all our stakeholders.
The benefits of BlackRock's differentiating approach are clear in the strength and consistency of our results. As Gary told you, our total net inflows of $172 billion in the first quarter were diversified across all client types, asset classes, investment styles, and regions, and represented an 8% annualized organic asset growth and a record 14% annualized organic base fee growth. As the COVID-19 vaccine rollout continues and restrictions are eased, a significant acceleration of economic activity is anticipated, despite the consistently high numbers of cases around the world and now the introduction of many new variants. Investors are navigating their portfolio through uncertainty, such as the strength of the reopening, structural changes to the economies and fiscal policy, and consequences for growth and inflation when activity is more fully restored.
Interest rates coming off historically lower levels have put pressure on fixed income assets and led to a rotation within equity from growth to value. Unlike the taper tantrum of 2013, however, the recent rise in rates has been gradual as investors look for greater compensation for holding longer duration bonds, and investor appetite for risk assets remains very strong. There's a lot of money in motion today. The level of fiscal support we have seen over the past year is four times that of a global financial crisis. Many investors continue to keep significant amounts of cash on the sidelines. To reach their investment goals, they will need to deploy that money in solutions that provide yield and preservation of their assets. BlackRock has deliberately built our industry-leading fixed income business to meet clients' needs regardless of the rate environment.
Changing rates that manifest in rotating within fixed income and BlackRock's diversified platform and strong active performance with 84% of our taxable fixed income assets above benchmark or peer median for a three-year period, were well-positioned for the demand. We saw $17 billions of net inflows in active fixed income driven by unconstrained total return municipals, international, and high-yield bond funds. Client demand for active strategies continued to accelerate at BlackRock. BlackRock generated $59 billion of active net inflows across asset classes in the first quarter, including another record quarter for active equities. Strong active flows included the nearly $5 billion launch of the BlackRock Innovation and Growth Trust, the second-largest-ever closed-end fund launch in the U.S. By innovating in product structure, generating strong investment performance, and offering strategies aligned with the needs of our clients, we are leading the turnaround of the closed-end fund IPO market.
BlackRock's strong active performance and flows are a direct result of these investments that I spoke about to build a platform with collaborative intelligence, advanced data, and technologies in a whole portfolio approach. We have never, ever been better positioned to deliver durable alpha for our clients, and I am confident we will continue to capture more demand for active strategies as we further strengthen our platform and invest in our platform. In liquid alternatives, we are seeing the magnitude of client flows increase every year. In the first quarter, we generated a record $11 billion of inflows and commitments. Results spanning from private credit to infrastructure to private equity solutions, including the final close of our inaugural $3 billion private equity secondary fund.
Infrastructure investments will be a key component of long-term returns in client portfolios as governments launch long-overdue infrastructure products and projects to restart their economies and build for a more resilient future. The $2 trillion infrastructure plan in the U.S. will create significant opportunities for putting capital to work in this asset class. Within infrastructure, renewables represent more than 50% of the transactions globally, and BlackRock is well-positioned with one of the industry's largest renewable power franchises. We recently closed the third vintage of our Global Renewable Power Fund, raising nearly $5 billion, which is more than the first and second vintages combined. iShares in BlackRock ETFs generated $68 billion of net inflows in the first quarter, the strongest start to a year in our history.
Flows reflect the diversity of our ETF platform and the benefits of strategic investments we made over time to support the adaptation of ETFs, the evolution of new uses, the reduction in barriers like commissions, and growth in areas such as model portfolios. The work we are doing to expand our sustainable iShares business is a great example of how we continue to innovate ahead of our clients' needs. We generated $17 billion of net inflows in the quarter across the sustainable iShares spectrum, from screens to thematic strategies. We recently crossed $100 billions of AUM in this category, up from $26 billion just a year ago. The global transition to a net-zero economy will impact every company's growth prospects. BlackRock believes that they are adapting and pivoting their strategies and business models ahead of this tectonic shift that will outperform over the long term.
Every investor will need to position their portfolios accordingly. BlackRock is investing to provide clients with more choice as we become a leader in sustainable and climate-aware investing. We launched two low-carbon transition readiness ETFs last week, raising a total of nearly $2 billion, representing the largest ETF launch in U.S. history. Traditionally, climate products have been backward-looking with a focus on reported greenhouse gas emissions. Using advanced data and analytics and research driven by insights, BlackRock developed a forward-looking, active climate investment strategy in a transparent, active ETF vehicle. These active ETFs are the first of their kind and a great example of how BlackRock is innovating to expand access to sustainable strategies for more investors worldwide. In total, BlackRock manages $353 billion in sustainable investments, including cash. We believe this category will grow to more than $1 trillion by 2030.
Sustainable investing presents opportunities for BlackRock, not only in terms of AUM growth, but in the demand for industry-leading technology and data. As sustainability becomes a critical building block in portfolios, investors need a clear understanding of how sustainable related risks and opportunities impact their portfolio. One of the newest opportunities for BlackRock is powering portfolios to a new sustainable standard with Aladdin because climate risk is investment risk. Our ambition to make Aladdin Climate the standard for assessing this risk with investors' portfolios and helping clients navigate and capture investment opportunity presented by the transition to a net-zero economy. Investments we have made into Aladdin over the years to serve more clients with better risk analytics, end-to-end operating systems, and the benefit of scale drove a 12% year-over-year growth in technology services revenues.
We consistently hear from clients that poor quality or availability of ESG data and analytics is the biggest barrier to deeper and broader implementation of sustainable investing. That is why we're evolving Aladdin Sustainability to help clients better assess their exposures and their positions across all their portfolios. Our minority investment in Clarity AI will integrate analytics and data covering 30,000 companies and nearly 200 companies within Aladdin. Our partnership with RepRisk will give clients the ability to identify ESG risk exposures in private investments and create a holistic view of risk across their portfolios. Advancing towards a net-zero economy by 2050 will require more than better data and analytics. It will require transformational innovation in carbon reduction and eliminating technologies. BlackRock has partnered with Temasek to establish Decarbonization Partners to invest in innovative decarbonization solutions to help accelerate global efforts.
This initiative will provide clients with an opportunity to participate in a net- zero transition by complementing BlackRock's existing renewable power and energy infrastructure investment platform. In line with our strategic focus on technology and sustainability, we nominated Hans Vestberg, Chairman and CEO of Verizon, to our board of directors for his deep experience in international markets, technology, and sustainability. At the same time, I want to thank Mathis Cabiallavetta for his passion and his dedication to BlackRock and its shareholders over the last 13 years. He will not stand for re-election at BlackRock's annual meeting next month. He will be missed by our entire board , by me and the entire leadership team at BlackRock. Our results and the speed of our forward momentum underscore the importance of BlackRock's fiduciary approach and culture. I truly believe our culture is what sets BlackRock apart.
It drives our performance, it pushes us to innovate, it pushes us to stay ahead of our clients' needs, and it guides our decisions and our behaviors. Critical to our culture is building an environment of inclusivity, belonging, trust, and creating a safe environment. More than ever before, BlackRock's leadership team and I are focused on instilling this culture with all of our 16,700 employees around the world, and evolving it to ensure that every employee, I want to underscore every employee, feels a sense of belonging. Our global scale and our unique client interactions give us a greater ability to invest in our clients' future and ultimately for the benefit of our shareholders.
I see tremendous opportunities ahead for BlackRock's focus remaining on embracing change, investing for the long term so we best serve all our stakeholders, and I look forward to executing on our ambitious plans in the years ahead. With that, operator, let's please open it up for questions.
At this time, I would like to remind everyone in order to ask a question, please press star and then number one on your telephone keypad. If you do ask a question, please take your phone now as per the speaker setting and use the handset to avoid any potential feedback. Please limit your sound to one question, and if you have a follow-up, please re-enter the queue. We pause for just the moment to compile the [question] process. Your first question comes from Brian Bedell with Deutsche Bank. Your line is open.
Hey, Brian.
Thank you. Hey, good morning. Congrats on a fantastic quarter again. Just a two-part question on sustainable investing. Just first wanted to make sure I get the numbers correct. I heard $353 billion in sustainable AUM, and I thought I heard you say $200 billion. I just wanted to make sure.
Right
What those two numbers were. In the 1Q flows, we had $17 billion of iShares, but what additional flows would be coming into other sustainable products? The broader question would be on the Temasek partnership and more broadly for carbon transition, obviously a huge evolving field. Have you thought about what the asset management TAM might be in that field and how you might tackle that through not only this partnership, but obviously through the ETFs you launch and other products as well?
Well, first, I apologize if we created any confusion. Let's start up. We do have $200 billion in sustainable long-term assets. The difference is we have a broad-based cash management space that is becoming more and more sustainable. If you add the cash side or the short-term cash, it comes up to that $300 billion number. I hope I answered that question properly now.
Yeah.
Two, I think the opportunity in transition is amazing. It is estimated we need to spend $50 trillion to have a decarbonized world. To do that is investing in new technologies. We are very pleased at having a partner in Temasek, and we have had many conversations with them related to how can we bring the world closer to a decarbonized world without a premium or without a green premium. This is specifically so relevant, not just in the United States, but it's so relevant in the emerging world. The emerging world's still growing and still has a greater need for electricity, greater need for building. The emerging world is just at the beginning of their economic growth.
If we are going to get to a net- zero world, the need for innovation and investing for green hydrogen to bring that premium down to zero, for biofuels, for sequestering carbon at a very inexpensive price. All of these are going to require new technologies. For agriculture produces over close to 15% of the carbon footprint related to that. We have many areas where it is going to require new technologies. I truly believe we are going to have many young people, instead of going into data and technology related to the social side of technology, I believe many innovations are going to come from young, startup, innovative companies. I would also say, I am very bullish on our traditional hydrocarbon and chemical companies as they pivot. I've had conversations recently with the CEO of a very large oil and gas company.
Just yesterday, I had a conversation with a CEO of a very large chemical company. We are actually talking to them about how can BlackRock invest with them side by side on technologies for decarbonization. The science and technology that our existing companies have in terms of the understanding of carbon and understanding the science of transforming it to a more decarbonized world is great. We are very encouraged about investing in startups, and that's what our Temasek BlackRock Decarbonization Fund is. We actually are having many conversations about investing with our infrastructure teams, with our private teams, with our debt teams to finance this. We've had numerous conversations with companies related to biofuels. When our employees are flying around the world, that we could have a footprint that is net zero. All of these are great opportunities for us and the investors worldwide.
Brian, it's Gary, just to quickly just capture what Laurence was talking about in terms of long-term and total. The flow number in terms of sustainable strategies for the quarter was $24 billion long-term. That broke down into $17 billion in ETFs and $7 billion in what we would call active. I would basically say that that was very broad-based across the platform, and primarily equity, but also in fixed income, multi-asset, and alt. That represents, in the aggregate on a long-term basis, about 50% annualized organic growth rate inflows .
Your next question comes from Dan Fannon with Jefferies. Your line's now open.
Thanks. Good morning. Laurence, I was hoping you could expand upon the institutional backdrop today in terms of risk profile, and how those conversations are evolving with the rate backdrop, and what's going on with fixed income, and how we should think about re-risking or de-risking in this kind of backdrop.
Well, hi Dan. Thank you. There's not one consistent conversation going on institutionally. Obviously, the question of inflation, the question of do deficits matter, are prominent conversations with our fixed income investors now. Some fixed-income investors are looking to de-risk, but de-risking by going into low-duration or unconstrained strategies. Some of them are looking to say, "I need more credit," or "I need more coupons to take on that duration risk." We still see demand in high yield evidenced by our flows. I don't think there's one specific trend. I would say the narrative around the question of inflation and deficits are becoming a very prominent part of our conversations. Obviously, many questions related to equity valuations, the rotation from growth to value. Is that overdone at this moment? Especially if the vaccinations are going to take longer, and other questions on that.
Those are probably the dominant conversations. If anything, Dan, as we said in some of the prepared remarks, there's incredible pools of cash on the sidelines. I would say overall, our clients are still sitting with big pools of money. Overall, they're still under-invested. Now, I would say as a 10-year Treasury rises in rates, their liabilities become less burdensome. If there is any continuing rising of the 10-year rate, the need for extending duration is no longer as necessary. The dialogues are very robust now. Many clients are putting and allocating more and more to private and alternatives. Many clients now are using ETFs for active exposures. That's accelerating, not decelerating. I would say there's nothing that's prominent in any one conversation except one thing, the conversation around sustainability.
There's not a conversation today with an institutional client on how should they think about climate risk, how should they think about transition risk. As I just said in the prior question, what we are trying to have our clients focus on, not the fear of transition, not the enormous need for transition, but the opportunities that transition will entail to get it right. The investment technologies to make sure that we don't have this green premium, or the net-zero world will not happen, especially in the emerging world. This is the beauty of, I would say, capitalism. This is the beauty of capital markets, that more and more clients are looking to be more prepared for this long-term trend. Many clients are asking the question, what role should their portfolio play in this long-term trend?
Your next question comes from Michael Cyprys with Morgan Stanley. Your line's now open.
Hey, good morning. Thanks for taking the question. I just want to circle back to some of the investment spend commentary you guys were articulating here. I'm just hoping maybe you could elaborate a little bit on how you're thinking about investing here, where specifically, and maybe if you could just maybe focus a little bit more on how would you characterize the pace of investment spend here in 2021 versus maybe the last couple of years. Does that accelerate just given the market uplift? How are you thinking about pacing that?
Thanks, Mike. I think, as we indicated previously, we're definitely accelerating our pace of investment spend into 2021. I think that's a combination of a couple things. I think the first thing is that I think it's really critical to know and look back at our results not only for this quarter, but the momentum for the last year, how that effectively reflects the fact that we have consistently spent in our business to stay ahead of clients' needs, and across the franchise. Without that consistent level of investment to try and stay ahead of those needs, we don't generate $525 billion of flows and 14% organic base fee growth, with four quarters over $100 billion.
We believe, and you've heard Laurence reaffirm it, that our business has never been better positioned to take advantage of those opportunities, whether it's sustainable, Laurence's been talking about a lot this morning, private markets, technology, China. We are going to pursue those opportunities responsibly. That being said, we obviously remain margin aware all the time. We're focusing on managing that entire discretionary expense base as always. We're committed to optimizing growth in the most efficient way possible. Our accelerated spend this year is really a function of what I just said, which is all the opportunities that we see before us, and the reality that we just didn't spend what we thought we were going to spend in 2020.
We made a strong commitment to our employees not to reduce our headcount, and I think that was a good thing because we saw the work units and the volumes increase throughout the year. We didn't really turn the hiring spigot back on until the second half, and frankly, late in the second half of last year. A lot of what we're doing this year is catching up to our business. We went into a year with a very specific budget in terms of our discretionary spend, whether that was in hiring or spending on G&A, and we have made no changes to that since we last chatted. Obviously, I think between beta and our organic growth, we're ahead of where we thought in terms of the business. Our intent is to continue to spend throughout the year as to the original budget.
We definitely got off to a little bit of a slower start in terms of tech and M&P spend. We're obviously anticipating some pickup in T&E towards the end of the year. It's full speed ahead in terms of our plans for the year.
Your next question comes from Craig Siegenthaler with Credit Suisse. Your line's now open.
Hi, Craig.
Hey, good morning, Laurence. My question is on Aladdin. If we look at the 16% year-on-year growth in annual contract revenues, can you talk about the components of the growth between the core operating system platform provider, Aladdin and Aladdin Wealth? I also wanted to hear how the portfolio analytics and risk management tools are now encompassing ESG and helping investors to build better portfolios across factors like sustainability.
Craig, I'll take the first, and then I'll let Laurence jump in and talk about our investment across the platform in terms of sustainability analytics and some of the things we're up to. We talked about the fact that we did have 12% year-over-year growth in revenue. I think, as always, the large preponderance of our technology services revenue today remains what we would call kind of the institutional Aladdin component. Obviously, we have other parts of that in terms of a variety of different, whether it's Aladdin Wealth or accounting or a bunch of other things. The majority of that growth is still year-over-year tied to the institutional business. Some of the component adds that we're basically anticipating growth in over time are still at the early stages.
There's no question that as we begin to grow out things like Aladdin Climate, which is really just getting started, we think that's going to be having a much more significant impact on our year-over-year growth. There's no question that we believe that the demand for integrated and resilient investment management technology is increasing. The pandemic has increased awareness on the importance of technology.
We're seeing industry consolidation, shifting product usage, and regulatory requirements creating the need for more holistic and flexible solutions. Our pipeline for the remainder of the year is strong. Again, continue to feel very good about that business. As I mentioned, the ACV of 16% is probably a little ahead of where we normally anticipate that, just by virtue of the comparison to a year ago. We feel really, really good about our positioning in that business, especially given our whole portfolio view across public and private markets.
I would just add that if you think about the growth of Aladdin from a platform that was just analyzing bonds to where we are today, the demand from our clients in terms of having an operating system that is end-to-end, an operating system that is connected to their custodial bank like Aladdin Provider, an operating risk management system that not only connects public markets but private markets. We built those platforms around that. Then, with the need of more information at the financial advisor's fingertips so they could provide deeper, broader risk analytics to their clients, and that's Aladdin Wealth. We've built Aladdin around the needs of our clients to offer a better experience, better outcomes.
I can't think of a better and more important time when Aladdin was necessary, when we were all working remotely and still are working remotely, and having an operating system that is connected worldwide. Our clients worldwide have actually become more enthusiastic about how Aladdin shapes and helps their business. We believe Aladdin actually improved their performance. There's research by third parties that suggest those who have Aladdin have better financial performance. When you think about climate risk and transition risk, that is going to encompass from cash to the most long-dated privates across the entire portfolio, across all products, across all regions, the need for Aladdin Climate and having data and analytics to justify the investments. We have to live under the Department of Labor rule of remaining to be a fiduciary.
We have to justify as a fiduciary that climate risk is investment risk. More than ever before, I believe Aladdin is as well-positioned because of how we navigated to making it end-to-end through the custodian to the wealth manager. Publics and privates, and then importantly, now with sustainability, really speaks about the resiliency of the operating system and why we continue to have deeper, broader conversations with more clients.
Your next question comes from Alexander Blostein with Goldman Sachs. Your line's now open.
Good morning, Alex.
Hey, Laurence. Good morning. Good morning, everybody. I was hoping we could spend a minute on BlackRock's initiatives in private markets specifically. I guess looking back over the last couple of months, you guys raised a $3 billion secondary fund, and I think I saw a $5 billion renewable power fund. What else is in the fundraising pipeline over the next, call it, 12-18 months? What areas, I guess, within private markets do you want to lean into more, both organically and inorganically, given that space continues to experience pretty significant growth?
We've had a focus on our alternatives business for the last several years. While we haven't raised $20 billion in one fund, we've raised $2 billion in 10 funds, those continue to grow. Our current focus will be on credit, which is where our clients are looking to invest. As Laurence mentioned, in sustainable, we are looking at renewable energy, which we just raised one very large fund. We will be following very closely the infrastructure bill and figure out how we can raise assets that we can deliver to our clients for infrastructure, which for many of our clients who would like long-duration type assets, infrastructure fits very well. We'll probably go in that direction a bit more.
Simply seeing how the private equity market evolves and where our clients can earn alpha drove our secondary and liquidations fund, as some of the older vintages come due from some of the stable private equity companies that are looking to start new funds but liquidate what is left in the older funds. What we're trying to do is really have a very careful eye on where we think the next value chain is, and can that be described both in a liquid form and an alternatives fund. What I would tell you is that our general theme is alternatives are going to become less alternative. We are following that very carefully. Currently, we are very focused on how that compares with what our team thinks about sustainability and ESG going forward, and how we combine the two.
Your next question comes from Robert Lee with KBW. Your line's now open.
Great, thanks. Hey, how's everyone doing? Hope everyone's doing well. I'm curious to know, how are you thinking about, or clients starting to think about, I guess it's a popular thing now, but digital assets. I don't mean crypto per se, but how are you starting to think about digital assets as a potential new asset class or investment class? I guess as part of that, maybe being a little facetious, but are we going to see Aladdin digital in two years, on one of these calls?
A, Aladdin is all digital, let me throw out there. In our dialogue with our clients are asking questions related to what the role of crypto or digital assets is related to part of their portfolio. As you suggested, Robert, it is perceived as a possibly new asset class, similar to maybe commodities or gold. We don't believe it is a substitute for currencies, but I do believe we're going to have the digitization of currencies. It's a conversation we are investigating on how we could create different products if there's client demand related to crypto. Let me just frame it. I think one of the reasons for our success with our clients over the last 33 years has been our consistency of focusing on long-term investing.
It is not about the markets and the behaviors of the markets and the ins and outs of the markets. Much of the dialogue today related to, whether it's a GameStop or what goes on with Reddit, it is about the TikTok and the day trading. The activities around Bitcoin and other crypto, we're fascinated about it. We're excited about it, as more people are enjoying looking at it. The most of it is about trading and the ins and outs of the marketplace. In our dialogues with our clients worldwide, it is not a major question that is being asked. It is not a major conversation related to how does that fit into their portfolio. With some, it does. Does it fit into their portfolio as a long-term investor?
I would just say overall, the actions around products that are around trading and the navigation of markets and new asset classes, it's just not about the whole foundation of our platform, about long-term investing. If somebody really wanted to build a big, deep dialogue related to this, they're probably going to go to another source, and that is just not a large foundation of the conversations we're having now. The conversations we're having on sustainability is greater today than it was the last time we spoke to you.
The conversation we're having about transition opportunities, so much greater than it was a quarter ago. I believe the momentum there, I believe the opportunity there is so much larger than, how is a crypto asset a long-term asset? I don't want to diminish anything related to crypto and digital ideas. I'm fascinated about it. I think it is going to be an asset class. We'll see how it performs over the long term , and it may be a great asset class, but let's wait and see.
Ladies and gentlemen, we have reached the allotted time for questions. Mr. Fink, do you have any closing remarks?
Thank you, operator. I want to thank all of you for joining us this morning and for your continued interest in BlackRock. Our first quarter results, again, are a direct result of our steadfast commitment to serving our clients. We are spending all our time trying to position our firm to stay in front of their needs, to try to anticipate their needs, so we can be the first conversation with every client. I believe we're fulfilling that. We're fulfilling a need in the entire financial services industry by focusing consistently on the long-term. We're not here to talk about the TikTok of the market and the ups and downs. It is about focusing on items like retirement, focusing on items like sustainability, and stakeholder capitalism.
These are the things that we believe are building resiliency to the BlackRock business model but also building long-term wealth for our clients and serving our clients well. Our job is to build a better future for our clients so they can build savings and make investing easier, making investments more affordable, helping advance sustainability investing, and contributing in our communities to have a more resilient economy. I believe our first quarter results truly illuminate our positioning with our clients, our positioning in the community, and we're winning more share of mind, more share of wallet with our clients than ever before. We will continue to invest, as Gary said, for our future to stay in front of our clients' needs. Have a good quarter. We'll talk to you later. Bye now.
This concludes today's teleconference. You may now disconnect.