$14 trillion asset manager BlackRock unveils its newest weapon in Wall Street 'alts' talent war: profit sharing from private markets | Fortune

"BlackRock, the world's largest asset manager, is borrowing a page from the private equity industry's playbook, announcing this month that it will offer a slice of the profits from the firm's private markets funds to a select group of senior executives. The move could see execs eventually earn millions in payouts for BlackRock's top-paid private markets executives if funds perform exceptionally well over the next decade. (No figures have been disclosed yet and BlackRock won't say what its profit-sharing carry program is worth.)"

"Coming from a fund manager that built its business in large part on low-cost ETFs and index funds under the iShares brand, the move underscores its new head-to-head rivalry with Apollo, Blackstone, and KKR, in addition to other traditional asset managers, in competing for wealthier clients and more profitable asset classes in the private markets. The firms are vying not just for investors and funds, but for the best private markets athletes to manage and oversee investments."

"With the pay plan, BlackRock aims to lock down talent at the world's largest asset manager as it wages a fierce war with other firms for top private markets players. The bid to keep people in their seats is particularly acute, as the gargantuan company continues its massive strategic push into the alternative asset management gold rush. "There has been a flow of talent from the public company investment sector to the private company sector," said R.J. Bannister, partner and chief operating officer at compensation consulting firm Farient Advisors."

BlackRock will offer a slice of profits from its private markets funds to select senior executives through an executive carry program adopted Jan. 13. The program could produce multi-million-dollar payouts if private funds perform exceptionally well over the next decade, though BlackRock has not disclosed figures. The plan aims to retain and attract top private markets talent as BlackRock expands alternatives, which now represent $660 billion of its $14 trillion in assets under management. The move increases direct competition with Apollo, Blackstone, KKR and traditional asset managers for wealthier clients and more profitable asset classes.

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