⚠ Dry Powder Is an Industry Problem, Not a BlackRock AdvantageModerate threat

BlackRock (BLK) — threat to the moat

Committed capital chasing the same deals is how vintage years go bad, and BlackRock has goodwill on the balance sheet urging it to deploy.

BlackRock's $91 billion of undrawn commitments1 is a small share of a very large industry total. Private credit, infrastructure and private equity managers collectively hold committed capital measured in the trillions, all of it under pressure to be deployed.

Private markets performance fees ($m)$308m2024$695m2025$63mH1 2025$369mH1 2026BlackRock Form 10-K FY2025 and BlackRock Form 10-Q, Q2 2026
Performance fees are rising now; they depend on realisations, which crowded deployment would delay.

That is a description of a crowded market. Capital seeking deals raises asset prices and compresses spreads, which lowers the returns the funds eventually produce, which lowers the performance fees and makes the next fundraise harder. It also creates a temptation to deploy into weaker transactions in order to start the fee clock, which is the mechanism by which vintage years go bad.

There is a second-order effect on BlackRock specifically. Having arrived in private markets late and at scale through acquisition, it needs those franchises to deploy and perform to justify the goodwill on its balance sheet. That is exactly the wrong incentive to have in an environment where the disciplined answer is to wait.

The honest counterweight is that BlackRock's private-markets businesses were established franchises with their own long-standing discipline before it bought them, and the fee structure rewards eventual returns rather than deployment speed.

The number to watch is the private markets performance fee: $695 million in 2025 against $308 million in 20242. That line reflects funds actually clearing their hurdles. A stall in it while assets and commitments keep growing would say the capital is being deployed into returns that no longer justify the fee.

References
  1. ReportedBlackRock's $91 billion of undrawn commitments is a small share of a very large industry total
    BlackRock, Inc. Form 10-K, FY2025, Item 1 Business — alternatives AUM $423,614M at 31 December 2025, growing at a five-year rate of 22% a year against 10% for total AUM; "approximately $91 billion of non-fee paying, unfunded, uninvested commitments to deploy, primarily for institutional clients, which is not included in AUM"; alternatives net inflows led by infrastructure, private credit and private equity, with liquid alternatives net inflows of $3 billion; BlackRock "is among the world's largest managers of pension plan assets with $3.9 trillion, or 62%, of long-term institutional AUM managed for defined benefit, defined contribution and other pension plans for corporations, governments and unions" — FY2025 · publ. February 2026 · source ↗
  2. ReportedThe number to watch is the private markets performance fee: $695 million in 2025 against $308 million in 2024
    BlackRock, Inc. Form 10-K, FY2025, MD&A — total revenue $24,216M against $20,407M in 2024; base fees and securities lending $19,179M against $16,100M, including securities lending revenue of $705M against $615M; performance fees $1,424M against $1,207M, of which private markets $695M against $308M and liquid alternatives $558M against $680M; technology services and subscription revenue $1,981M against $1,603M, an increase of $378M "reflecting the sustained demand for Aladdin technology offerings and approximately $210 million of revenue related to the Preqin Transaction"; distribution fees $1,355M; advisory and other revenue $277M; annual contract value growth of 31% including Preqin and 16% excluding it; employee compensation and benefits $8,446M — FY2025 · publ. February 2026 · source ↗
Sources
Generated September 23, 2026