✦ HPS, GIP and the Hundred-and-Eighteen-Billion-Dollar TurnNarrow moat

BlackRock (BLK) — the future bets

Buying a private-markets franchise in a currency that dilutes, which is why reported earnings fell as revenue rose 19%.

In October 2024 BlackRock closed the acquisition of Global Infrastructure Partners, adding about $70 billion of client assets. On 1 July 2025 it closed HPS Investment Partners, adding about $118 billion. ElmTree followed in September with roughly $3 billion1.

The two earnings, both audited2024 reported EPS$42.01 — 2025: $35.31, down 16%2024 adjusted EPS$43.61 — 2025: $48.09, up 10%CauseSubco units — 7,614,515 exchangeableDiluted incl. units156.3m to 164.6m — Q2 2025 to Q2 2026
Revenue rose 19% and reported earnings per share fell, because the consideration sits outside net income while the revenue sits inside it.

The strategic logic is the fee-mix arithmetic. Alternatives are 3% of BlackRock's long-term assets and produce 17% of long-term base fees2 — the only category in the disclosure that earns several times its weight3. Moving assets in that direction is worth several times more per dollar than winning them anywhere else, and organic growth would have taken a decade.

The early evidence is in the performance fees. Private markets contributed $695 million in 2025 against $308 million in 20244, and the total performance fee line went from $1,207 million to $1,424 million5. There is also roughly $91 billion of unfunded, uninvested commitments waiting to be called at full fee rates6, which appears in no assets-under-management figure.

What makes this the most consequential of the four bets is the payment. HPS was bought substantially with Class B-2 units of a consolidated subsidiary, exchangeable one-for-one into BlackRock stock7 — 7,614,515 of them outstanding at the 2025 filing8. That structure is why reported earnings per share fell to $35.31 from $42.019 in a year when revenue rose 19%, while the as-adjusted figure rose to $48.09 from $43.6110.

The single number that settles it is the alternatives base fee rate over the next several years. If it holds while the assets grow, BlackRock bought a franchise. If it compresses in the way public-market fees did, it bought a larger version of the problem.

Moat trajectory: Widening

The assets arrived, the performance fees followed, and $91 billion of undrawn commitments sits behind them. The dilution is real and visible in a share count that rose from 156.3 million to 164.6 million, and the returns take fund cycles to settle.

The number that tests this moat
Reported
Diluted shares including Subco units
164.6M, from 156.3M

The HPS consideration was paid substantially in Class B-2 units of a consolidated subsidiary, exchangeable one-for-one into BlackRock stock, with 7,614,515 outstanding at the 2025 filing. The earnings are real; so is the dilution.

Source: BlackRock Form 10-Q, quarter ended June 30, 2026 ↗
References
  1. ReportedElmTree followed in September with roughly $3 billion
    BlackRock, Inc. Form 10-K, FY2025, acquisitions and equity — Aperio (approximately $41 billion of AUM, February 2021), Kreos (approximately $2 billion, August 2023), SpiderRock (approximately $4 billion, May 2024), Global Infrastructure Partners (approximately $70 billion, October 2024), Preqin (March 2025), HPS Investment Partners (approximately $118 billion, closed 1 July 2025) and ElmTree (approximately $3 billion, September 2025); the HPS consideration was paid substantially in Class B-2 common units of a consolidated subsidiary, BlackRock Saturn Subco, LLC, "which are exchangeable on a one-for-one basis into common stock of the registrant", with 7,614,515 such units included in the fully diluted share count on the cover of the Form 10-K — FY2025 · publ. February 2026 · source ↗
  2. ReportedAlternatives are 3% of BlackRock's long-term assets and produce 17% of long-term base fees — the only category in the disclosure that earns several times its weight
    BlackRock, Inc. Form 10-K, FY2025, Item 1 Business — assets under management of $14.0 trillion at 31 December 2025 (long-term $12,960,786M plus cash management $1,080,732M); equity $7,793,875M, fixed income $3,272,021M, multi-asset $1,223,625M, alternatives $423,614M, digital assets $78,435M, currency and commodities $169,216M; five-year AUM CAGR 10%, alternatives 22%, multi-asset 13%, equity 12%, currency and commodities 17%, fixed income 4%; by style, active $3,432,743M, non-ETF index $4,060,333M, ETFs $5,467,710M; approximately 24,900 employees in more than 30 countries serving clients in over 100 — FY2025 · publ. February 2026 · source ↗
  3. ReportedAlternatives are 3% of BlackRock's long-term assets and produce 17% of long-term base fees — the only category in the disclosure that earns several times its weight
    BlackRock, Inc. Form 10-K, FY2025, Item 1 Business — assets under management of $14.0 trillion at 31 December 2025 (long-term $12,960,786M plus cash management $1,080,732M); equity $7,793,875M, fixed income $3,272,021M, multi-asset $1,223,625M, alternatives $423,614M, digital assets $78,435M, currency and commodities $169,216M; five-year AUM CAGR 10%, alternatives 22%, multi-asset 13%, equity 12%, currency and commodities 17%, fixed income 4%; by style, active $3,432,743M, non-ETF index $4,060,333M, ETFs $5,467,710M; approximately 24,900 employees in more than 30 countries serving clients in over 100 — FY2025 · publ. February 2026 · source ↗
  4. ReportedPrivate markets contributed $695 million in 2025 against $308 million in 2024, and the total performance fee line went from $1,207 million to $1,424 million
    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 ↗
  5. ReportedPrivate markets contributed $695 million in 2025 against $308 million in 2024, and the total performance fee line went from $1,207 million to $1,424 million
    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 ↗
  6. ReportedThere is also roughly $91 billion of unfunded, uninvested commitments waiting to be called at full fee rates, which appears in no assets-under-management figure
    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 ↗
  7. ReportedHPS was bought substantially with Class B-2 units of a consolidated subsidiary, exchangeable one-for-one into BlackRock stock — 7,614,515 of them outstanding at the 2025 filing
    BlackRock, Inc. Form 10-K, FY2025, acquisitions and equity — Aperio (approximately $41 billion of AUM, February 2021), Kreos (approximately $2 billion, August 2023), SpiderRock (approximately $4 billion, May 2024), Global Infrastructure Partners (approximately $70 billion, October 2024), Preqin (March 2025), HPS Investment Partners (approximately $118 billion, closed 1 July 2025) and ElmTree (approximately $3 billion, September 2025); the HPS consideration was paid substantially in Class B-2 common units of a consolidated subsidiary, BlackRock Saturn Subco, LLC, "which are exchangeable on a one-for-one basis into common stock of the registrant", with 7,614,515 such units included in the fully diluted share count on the cover of the Form 10-K — FY2025 · publ. February 2026 · source ↗
  8. ReportedHPS was bought substantially with Class B-2 units of a consolidated subsidiary, exchangeable one-for-one into BlackRock stock — 7,614,515 of them outstanding at the 2025 filing
    BlackRock, Inc. Form 10-K, FY2025, acquisitions and equity — Aperio (approximately $41 billion of AUM, February 2021), Kreos (approximately $2 billion, August 2023), SpiderRock (approximately $4 billion, May 2024), Global Infrastructure Partners (approximately $70 billion, October 2024), Preqin (March 2025), HPS Investment Partners (approximately $118 billion, closed 1 July 2025) and ElmTree (approximately $3 billion, September 2025); the HPS consideration was paid substantially in Class B-2 common units of a consolidated subsidiary, BlackRock Saturn Subco, LLC, "which are exchangeable on a one-for-one basis into common stock of the registrant", with 7,614,515 such units included in the fully diluted share count on the cover of the Form 10-K — FY2025 · publ. February 2026 · source ↗
  9. ReportedThat structure is why reported earnings per share fell to $35.31 from $42.01 in a year when revenue rose 19%, while the as-adjusted figure rose to $48.09 from $43.61
    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 ↗
  10. ReportedThat structure is why reported earnings per share fell to $35.31 from $42.01 in a year when revenue rose 19%, while the as-adjusted figure rose to $48.09 from $43.61
    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