How Private Markets Competition Is Reshaping Talent Strategies Across the Asset Management Industry

The battle for investment talent is heating up across Wall Street, and it’s fundamentally reshaping how major asset managers think about compensation. BlackRock, the world’s largest asset manager with $14 trillion in assets under management, just launched an executive carry program designed to compete directly with private equity firms for the best talent. But this isn’t just about one company’s move—it signals a broader industry transformation driven by the explosive growth of private markets as a crucial segment of modern investing.

Private Markets Have Become Too Big to Ignore

To understand why BlackRock is taking such an aggressive approach to compensation, you need to grasp the sheer scale of what’s happening in private markets. These alternative investments now account for $660 billion of BlackRock’s portfolio, and the entire sector is on track for explosive expansion. Industry forecasters predict that private markets assets will surge from $15 trillion in 2022 to over $24 trillion by 2028—a trajectory that Bank of New York has called an “alternatives renaissance.”

The stakes are even higher when you look at wealth management. Institutional investors are anticipating that assets dedicated to private wealth in private markets will triple from $4 trillion to $12 trillion in the coming years. This isn’t gradual change—it’s a fundamental reshaping of how investment portfolios are constructed. For firms like BlackRock, Vanguard, and State Street, having world-class talent managing these assets is no longer optional. It’s essential to survival.

“There’s substantial profit potential, which is the main motivator,” explains Steven Kaplan, a finance professor at the University of Chicago Booth School of Business. “But there’s also strong demand, as these assets represent a large segment of the market. To provide a comprehensive portfolio, firms must participate in this space.”

The Talent Migration: Why Private Equity Is Winning

For years, asset managers have watched their best people walk out the door to join private equity shops like Apollo Global Management, Blackstone, and KKR. The reason is simple: money. Private equity firms offer compensation structures that traditional asset managers simply can’t match, and the difference isn’t subtle.

Top executives at leading private equity firms can receive carry allocations valued between $150 million and $225 million over a fund’s lifetime, assuming strong performance. Compare that to investment bank CEOs, who typically earn $30 million to $40 million annually. The gap is staggering, and it’s been fueling a steady exodus of talent from asset management to private markets.

This shift has a name in the industry: carried interest. It works like this: investors in private markets funds put up capital and expect a minimum annual return—typically 7% to 8%, known as the hurdle rate. Once that threshold is met, the firm keeps 20% of the profits above that level. A portion of those profits is then distributed to the investment professionals who managed the fund, creating the potential for enormous payouts tied directly to performance.

The beauty of this structure, from an employee’s perspective, is the tax treatment. Carried interest is classified as a partnership interest, which means it’s typically taxed at around 20%. Compare that to regular compensation, which can be taxed at rates up to 37%, and you begin to understand the appeal.

“This structure is highly appealing to employees, as it treats them more like owners within the investment entity,” notes Eric Hosken, a partner at Compensation Advisory Partners. It’s a psychological shift as much as a financial one—professionals feel like they have true skin in the game.

BlackRock’s Answer: The Executive Carry Program

BlackRock launched its response on January 13, 2026: an executive carry program that would allow select senior leaders to share in profits generated from the company’s private markets funds. This wasn’t entirely new territory for the firm. CEO Larry Fink had already been granted a similar arrangement in February 2025, giving him a slice of carry distributions from ten flagship private markets funds.

What’s notable about BlackRock’s broader program is that it fundamentally aligns the company’s approach with private equity models. Selected executives will receive shares of profits from BlackRock’s flagship private markets funds—vehicles that typically raise over $1 billion each and span asset classes including infrastructure, private debt, private equity, and real estate.

BlackRock has been aggressive in building out this capability. In 2024, the company acquired Global Infrastructure Partners in a major move. In 2025, BlackRock doubled down by acquiring HPS Investment Partners and Preqin—the data provider—for a combined value exceeding $15 billion in cash and stock, with Preqin alone commanding $3.2 billion.

“2026 will mark our first full year operating as a unified platform with GIP, HPS, and Preqin,” Larry Fink announced. “Clients worldwide are seeking to expand their relationship with BlackRock.” The company reported $24.2 billion in revenue in its latest fiscal year, and leadership has set an ambitious target: $400 billion in private markets fundraising by 2030.

The Board Takes Notice: Changing Peer Groups for Executive Compensation

Here’s where things get really telling about industry shifts: BlackRock’s board of directors made a strategic decision to change the peer group used for executive compensation benchmarking. Historically, the board compared BlackRock’s pay packages against traditional asset managers like Goldman Sachs, State Street, and T. Rowe Price.

Not anymore. The new peer group now includes Apollo Global Management, Blackstone, and KKR—pure-play private equity companies. This shift reflects a fundamental truth: BlackRock no longer sees itself competing primarily with other diversified asset managers. It’s competing with private equity for the same talent, the same capital, and the same deal flow.

Yet despite this repositioning, the compensation gap remains real. A survey by Magellan Advisory Partners found that 29% of asset management leaders expect to lose key staff members due to increased poaching by private equity competitors, organizational changes, and reduced bonuses. More than half of respondents indicated they plan to hire additional executives this year to counteract these losses—a clear sign of the intensity of the current talent war.

The Golden Handcuffs: Strict Rules to Keep Talent in Place

BlackRock’s program isn’t just generous—it’s also designed to make departure costly. The executive carry program includes strict provisions that essentially serve as golden handcuffs. If a participant joins a competitor, starts a rival fund, or engages in any activity deemed competitive, their entire stake in the carry program is forfeited. This applies to both vested and unvested portions, making the consequences particularly severe.

“These rules are designed to keep key people in place,” explains R.J. Bannister, a partner and chief operating officer at Farient Advisors. “Leaving means giving up substantial value.”

Notably, BlackRock’s program features a backloaded vesting schedule—executives don’t begin vesting until the third year of a five-year period. This means key team members have strong incentives to stick around until distributions actually begin.

While forfeiture clauses are common across the industry, it’s less typical for both vested and unvested carry to be forfeited simultaneously. Steffen Pauls, founder of Moonfare, described this approach as “unusual but investor-friendly,” as it ensures continuity of key team members through critical periods.

Goldman Sachs Joins the Trend: When Entire Sectors Transform

BlackRock isn’t alone in this strategy. Goldman Sachs introduced a similar carried interest program for CEO David Solomon and select senior leaders in 2025. Goldman’s program covers seven alternative funds launched in 2024, including buyout and private equity vehicles, and notably reduces base cash compensation for eligible executives.

Goldman’s approach includes its own forfeiture provisions for both vested and unvested carry if executives join competitors. There’s also a capital contribution requirement: top executives must invest $1 million of their own money in the funds, while other participants contribute $50,000. This structure ensures that leadership literally has skin in the game.

These developments at both BlackRock and Goldman Sachs aren’t aberrations—they’re harbingers of a broader transformation. As private equity, venture capital, infrastructure investments, private credit, and real estate become increasingly central to investment strategy, entire compensation models are being rebuilt around these asset classes.

The Reshaping of Asset Management’s Future

What’s happening now is fundamentally about the “market portfolio”—the full spectrum of investable assets available to institutions and individuals. Alternative investments and private markets now represent a substantial portion of that portfolio, and investors expect access to these opportunities.

For traditional asset managers, the choice is stark: adapt or risk losing talent and capital to more specialized competitors. BlackRock’s aggressive moves in private markets—the acquisitions, the data platform consolidation, the $400 billion fundraising target, and now the executive carry program—represent a coordinated bet that the future of asset management is inseparable from private markets expertise.

The war for talent in private markets is reshaping not just individual firms’ compensation strategies, but the entire competitive landscape of global asset management.