A former director at BlackRock's Long Term Private Capital fund has filed a $12.4 million lawsuit against the world's largest asset manager, accusing it of promising him a share of investment profits it never put in writing and never paid. Neal Dignum, who worked at the firm from November 2021 to February 2023, is also asking a New York judge to unseal the case entirely, setting up a fight that could pull back the curtain on how BlackRock pays its top private equity dealmakers.
Dignum's lawsuit landed in New York State Supreme Court on Monday, according to court documents cited by the New York Post, which first reported the filing. The complaint alleges BlackRock failed to pay Dignum's promised carried interest despite giving him an offer letter and term sheet detailing the arrangement, but the company never followed through with a formal written compensation agreement, the documents state.
Carried interest is a share of an investment fund's profits typically paid out as a performance incentive to the executives who manage it, and the stakes attached to it are enormous. In private equity, carried interest traditionally represents a 20% performance fee on fund net profits, paid to managers only after limited partners recoup their full invested principal plus a typical 8% annualized preferred return, according to Masterworks. A 2021 Heidrick & Struggles survey found carried interest accounts for at least 84% of managing partners' average total compensation, and can climb to well over 90% at larger firms, per the same Post report.
A Fund Built to Outlast Traditional Buyouts
Dignum joined BlackRock's Long Term Private Capital, or LTPC, team as a director in November 2021 after nearly a decade in private equity, including a stint as principal at Charlesbank Capital Partners and a senior associate role at Apax Partners, according to PE Hub. He holds an MBA from The Wharton School and a bachelor's degree from Middlebury College.
LTPC launched in 2019 under former CPPIB executive André Bourbonnais with a mandate to raise up to $12 billion for direct private equity investments designed to hold companies for seven to eight years or longer, according to the Institutional Investor. The idea was to challenge the traditional three-to-five-year private equity exit cycle. During its active investment period, the fund acquired major stakes in luxury fragrance maker Creed, outsourced insurance claims platform Alacrity Solutions, and brand management firm Authentic Brands Group, before BlackRock opted not to raise a second LTPC fund and began winding it down in 2024, Business Insider has reported.
The Fight Over Keeping the Complaint Sealed
The complaint remains sealed for now, but Dignum wants that to change. He's asking the court to order BlackRock to justify, in a public hearing, why the filing should stay permanently sealed or redacted rather than made available to the public.
New York law makes that a steep climb for BlackRock. Under Section 216.1 of the Uniform Rules for New York State Trial Courts, civil court records are presumptively open to the public and cannot be sealed without a specific written judicial finding of good cause, according to the New York State Unified Court System. To meet that bar, a party generally must present sworn evidence showing that disclosure would reveal genuine trade secrets or proprietary business plans causing real competitive harm, per guidance from Schlam Stone & Dolan LLP, rather than simply general commercial sensitivity or embarrassment.
Dignum's lawyers have described BlackRock's employee nondisclosure agreement, which he signed as part of his employment contract, as extremely broad in scope. But established New York appellate case law holds that private confidentiality agreements between employers and employees do not bind the judiciary or automatically override the public's presumptive right to court access, according to the Reporters Committee for Freedom of the Press. That means BlackRock would need to independently convince a judge the complaint contains trade secrets, confidential business information, or other proprietary material worth shielding, rather than pointing to Dignum's NDA alone.
What's at Stake for Both Sides
The sealed complaint reportedly includes information about the approximate growth of the Long Term Private Capital fund during Dignum's tenure — details that, if unsealed, could offer a rare public look at how one of BlackRock's flagship private equity vehicles performed. Dignum's attorney, Lauren Zimmerman, said his legal team would seek to vindicate his rights in court and that BlackRock decided not to honor its compensation bargain with him, according to the same Post report.
Dignum has said he fears BlackRock could respond with a retaliatory counterclaim. The company has reportedly possessed a draft of his complaint for nearly three months but has not responded to it, and it did not immediately respond to the Post's request for comment on the lawsuit.
BlackRock, headquartered at 50 Hudson Yards in New York City, operates as the world's largest asset manager, with more than $15.3 trillion in assets under management and nearly 25,000 employees across 70 offices globally, according to Wikipedia. The lawsuit arrives as the firm has been reshaping its private markets business, spending roughly $12.5 billion to acquire Global Infrastructure Partners and $3.2 billion for data firm Preqin in 2024, per ESG Dive, even as it stepped back from the direct buyout strategy that once employed Dignum.
The firm's private markets division has also faced other liquidity pressures this year. BlackRock capped quarterly redemptions at 5% for its $26 billion HPS Corporate Lending Fund after a surge in withdrawal requests, Hoodline previously reported. Whether Dignum succeeds in unsealing his complaint now rests with a New York judge, who must weigh the state's strong presumption of public court access against whatever evidence BlackRock offers to keep its pay structure out of view.
