⚠ Everyone Is Buying the Same Thing at the Same TimeHigh threat

BlackRock is not the only firm that read this table. Every large traditional asset manager has concluded that fee compression in public markets is permanent and that private markets are the answer, and most have been acquiring accordingly.

That does two things to the arithmetic. It raises the price of the assets being bought, because a scarce supply of established private-markets franchises is being bid for by a large number of well-capitalised buyers. And it compresses the returns of the thing being bought, because the same conclusion has drawn enormous capital into private credit and infrastructure, and more capital chasing the same deals means lower spreads.

The second effect is the one that matters over a decade. Private markets fee rates are high because the returns have been high and the capacity constrained. Remove the capacity constraint and the fee follows, on the same logic that took index fees to zero — slower, because the products are less comparable, but in the same direction.

BlackRock's specific position has an additional wrinkle. It arrived late, at scale, by acquisition, into a business where the incumbents have decades of relationships and track record, and it paid substantially in a currency — units of a subsidiary, exchangeable into stock — that ties the sellers' outcome to BlackRock's own share price.

The number that tests this is the private markets base fee rate, which BlackRock does not break out. In its absence, watch performance fees: $695 million from private markets in 2025¹ against $308 million the year before is the right direction, and a year in which it goes sideways while assets grow says the returns are compressing.