A former director at BlackRock's Long Term Private Capital fund is suing the world's largest asset manager for $12.4 million, alleging the firm reneged on promised compensation.
Neal Dignum, who worked at BlackRock from November 2021 to February 2023, claims the company never formalized a compensation agreement that included carried interest, a form of profit-sharing typically given as a performance incentive to investment fund managers. Dignum's lawyers allege that BlackRock "deliberately never put pen to paper to create a promised compensation agreement" and "decided it did not want to keep its end of the bargain."
Carried interest often constitutes a significant portion of compensation for fund managers, sometimes making up over 90% of their total earnings at larger firms, according to a 2021 survey. The lawsuit, filed in New York State Supreme Court, states that BlackRock used the offer of carried interest "as a means of inducing him to accept the Firm’s offer."
The complaint is currently sealed due to Dignum's concerns about a potential retaliatory counterclaim from BlackRock, citing the firm's "signature aggression." Dignum's legal team argued that the firm's non-disclosure agreement is "extremely broad in scope."
Dignum is seeking to make the lawsuit's details public, requesting that BlackRock be compelled to appear in court if it wishes to have any part of the filing permanently sealed or redacted. To keep the complaint sealed, BlackRock would need to argue that it contains trade secrets, confidential business information, or proprietary information. If this argument fails, the firm's compensation structure could be revealed.
According to court filings, BlackRock has possessed a draft of Dignum's complaint for nearly three months without responding. The sealed complaint also reportedly contains information about the approximate growth of the LTPC fund during Dignum's tenure. The fund began winding down in 2024, and Dignum's legal team argues that these details should not be withheld from the public.
BlackRock, headquartered in New York City, manages over $15.3 trillion in assets.