✦ The Future BetsNarrow moat

BlackRock (BLK) — the future bets

Four attempts to answer one question: can the price of managing money be stopped from falling?

Everything BlackRock has done with its balance sheet since 2023 is an answer to one question: can the price of managing money be stopped from falling?

Client assets and data bought, 2024-25$118bn AUMHPS$70bn AUMGIP$3bn AUMElmTree$3.2bn paid, cashPreqinEquity rose from $39.3bn to $55.9bn over the two years; ROE fell to 10.7%
Four purchases in under two years, all aimed at one question: whether the price of managing money can be stopped from falling.

The public-markets answer is no. Index exposure is a commodity manufactured by four capable firms, one of which is structurally incapable of wanting a profit, and the reference price has been heading toward zero for twenty years. BlackRock has won that fight in the sense that it kept the assets. It lost it in the sense that revenue was $19.4 billion in 2021 and $17.9 billion in 20231 while the assets grew.

So the bets all point at parts of the industry where the price is set differently. Private markets, where fees are several times public-market rates and BlackRock spent roughly $30 billion of stock and cash buying its way in. Data, where owning the reference source for an opaque asset class is a position that gets more valuable as the class gets larger. Digital assets, where a genuinely new category was won outright in about two years. And the retirement system, where the ambition is to put private-market exposure inside the default fund of a defined contribution plan — the largest and stickiest pool of capital in existence.

They are not equally advanced. Two are done and being integrated. One is working and small. One is a regulatory argument that has not been won.

The rating is narrow and widening. These are sensible responses to a real structural problem, executed with a balance sheet few competitors could match, and the early evidence — private markets performance fees rising from $308 million to $695 million in a year2 — points the right way. What they are not is proof. The acquisitions are visible in an equity base that grew 42% in two years3 and a return on equity that fell to 10.7%4, and the case for them will take several fund cycles to settle.

Moat trajectory: Widening

Two of the four are done and integrating, one is working at small scale, and the early evidence is in the numbers — private markets performance fees more than doubled in a year. What is not yet proven is whether $30 billion of equity bought a franchise or a larger version of the same fee problem.

The number that tests this moat
Reported
Equity added by the acquisitions
$39.3B to $55.9B in two years

A 42% increase in shareholders' funds, nearly all goodwill and intangibles from GIP, HPS, Preqin and ElmTree. That is what the mix improvement cost, and the return on it is what the next several fund cycles will decide.

Source: BlackRock Form 10-K, fiscal year 2025 ↗
✦ Future bets — beyond today's moat
✦ FUTURE BET 01
HPS, GIP and the Hundred-and-Eighteen-Billion-Dollar Turn
Buying a private-markets franchise in a currency that dilutes, which is why reported earnings fell as revenue rose 19%.
✦ FUTURE BET 02
Preqin and Indexing the Unindexable
The only bet here that would change what BlackRock is rather than what it sells.
✦ FUTURE BET 03
Digital Assets: Seventy-Eight Billion, Then Forty-Nine
Half a percent of the assets, and the best evidence available that the machine can still win a category from a standing start.
✦ FUTURE BET 04
Putting Private Assets Inside the 401(k)
The largest prize in the company, guarded by a fiduciary standard designed to stop exactly this.
References
  1. ReportedIt lost it in the sense that revenue was $19.4 billion in 2021 and $17.9 billion in 2023 while the assets grew
    BlackRock, Inc. Form 10-K, FY2025, consolidated financial statements — revenue $24,216M (2024 $20,407M, 2023 $17,859M, 2022 $17,873M, 2021 $19,374M); base fees and securities lending $19,179M / $16,100M / $14,399M; performance fees $1,424M / $1,207M / $554M; technology services and subscription $1,981M / $1,603M / $1,485M; distribution fees $1,355M / $1,273M / $1,262M; advisory and other $277M / $224M / $159M; operating income $7,045M at a 29.1% margin (2024 37.1%, 2023 35.1%, 2022 35.7%, 2021 38.5%); net income $5,553M (2024 $6,369M); diluted earnings per share $35.31 (2024 $42.01, 2023 $36.51, 2022 $33.97, 2021 $38.22); as adjusted, operating income $9,600M at 44.1%, net income $7,736M and diluted EPS $48.09 against $43.61; total stockholders' equity $55,888M (2024 $47,495M, 2023 $39,347M) — FY2025 · publ. February 2026 · source ↗
  2. ReportedThese are sensible responses to a real structural problem, executed with a balance sheet few competitors could match, and the early evidence — private markets performance fees rising from $308 million to $695 million in a year...
    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 ↗
  3. Moat Explorer calcThe acquisitions are visible in an equity base that grew 42% in two years and a return on equity that fell to 10.7%, and the case for them will take several fund cycles to settle
    BlackRock, Inc. Form 10-K, FY2025, consolidated financial statements — revenue $24,216M (2024 $20,407M, 2023 $17,859M, 2022 $17,873M, 2021 $19,374M); base fees and securities lending $19,179M / $16,100M / $14,399M; performance fees $1,424M / $1,207M / $554M; technology services and subscription $1,981M / $1,603M / $1,485M; distribution fees $1,355M / $1,273M / $1,262M; advisory and other $277M / $224M / $159M; operating income $7,045M at a 29.1% margin (2024 37.1%, 2023 35.1%, 2022 35.7%, 2021 38.5%); net income $5,553M (2024 $6,369M); diluted earnings per share $35.31 (2024 $42.01, 2023 $36.51, 2022 $33.97, 2021 $38.22); as adjusted, operating income $9,600M at 44.1%, net income $7,736M and diluted EPS $48.09 against $43.61; total stockholders' equity $55,888M (2024 $47,495M, 2023 $39,347M) — FY2025 · publ. February 2026 · source ↗
  4. Moat Explorer calcThe acquisitions are visible in an equity base that grew 42% in two years and a return on equity that fell to 10.7%, and the case for them will take several fund cycles to settle
    BlackRock, Inc. Form 10-K, FY2025, consolidated financial statements — revenue $24,216M (2024 $20,407M, 2023 $17,859M, 2022 $17,873M, 2021 $19,374M); base fees and securities lending $19,179M / $16,100M / $14,399M; performance fees $1,424M / $1,207M / $554M; technology services and subscription $1,981M / $1,603M / $1,485M; distribution fees $1,355M / $1,273M / $1,262M; advisory and other $277M / $224M / $159M; operating income $7,045M at a 29.1% margin (2024 37.1%, 2023 35.1%, 2022 35.7%, 2021 38.5%); net income $5,553M (2024 $6,369M); diluted earnings per share $35.31 (2024 $42.01, 2023 $36.51, 2022 $33.97, 2021 $38.22); as adjusted, operating income $9,600M at 44.1%, net income $7,736M and diluted EPS $48.09 against $43.61; total stockholders' equity $55,888M (2024 $47,495M, 2023 $39,347M) — FY2025 · publ. February 2026 · source ↗
Sources
Generated September 23, 2026