Wealth advisers at banks and independent brokerages have collected billions of dollars in private capital fees by directing individual investors into private market funds, a Financial Times analysis of regulatory filings has found. The reporting lands as many retail investors try to pull money back out of those same vehicles.
According to the FT, sixteen semi-liquid funds, including products managed by Blackstone, Blue Owl, Apollo and KKR, generated more than $2 billion in servicing fees for wealth advisers since 2017, a figure that does not include the larger upfront commissions advisers can also earn. Large banks such as Morgan Stanley, UBS and Bank of America Merrill Lynch, along with independent wealth managers, benefited from a wave of private funds aimed at individual investors before inflows began to slow.
How the private capital fees are structured
Much of the growth has come from semi-liquid, or “evergreen,” vehicles, which let investors add and withdraw money at scheduled intervals rather than locking it up for years. The recurring servicing fee paid to advisers can reach about 0.5 percent of a client’s initial investment, with some funds capping the combined fee around 0.85 percent. On top of that, brokerages can charge upfront commissions of up to 3.5 percent, though advisers may waive them; people familiar with the arrangements told the FT the commission averages roughly 2 percent. Independent advisers typically forgo per-fund commissions and instead charge a flat percentage of a client’s total assets.
Blackstone, a leader in evergreen private credit and real estate funds, was the largest payer of servicing fees and commissions. Its property fund Breit and lending vehicle Bcred have together drawn more than $100 billion in net assets since 2020, and the two paid brokers a combined $280 million in servicing fees in the most recent year disclosed.
The fee-and-return trade-off
Higher fees can erode investor returns. The FT noted that Blackstone’s lowest-fee Breit share class returned more than 9.3 percent annually since 2017, against about 8 percent for higher-fee classes, with a similar gap on its credit fund. Comparable spreads between high- and low-fee share classes appear at managers including Blue Owl and Ares. Blackstone responded that its evergreen funds have delivered strong net returns, outperforming public benchmarks since inception, and that most of its evergreen assets sit in share classes that charge no commissions or servicing fees. Banks said their advisers operate under a fiduciary duty to recommend suitable investments and are not driven by fees; Morgan Stanley said it had harmonised its fee structure so advisers are not steered toward any one fund.
Why it matters now
The fee disclosures arrive during a sharp reversal in retail appetite for private markets. Through early 2026, investors moved to redeem money from semi-liquid private credit and related funds, prompting several managers to limit or gate withdrawals as redemption requests mounted, as reported by CNBC and Fortune. That backdrop sharpens questions about how products sold heavily to individuals through fee-paying advisers perform when many holders want their cash at once.
What to watch
Several of the figures above come from company disclosures and a single news analysis rather than audited industry-wide data, so totals may shift as more filings are examined. Net-of-fee performance, the share of assets in fee-bearing versus fee-free classes, and the pace of redemptions are the metrics most worth tracking. Prospective investors generally benefit from asking how an adviser is paid on a given product, comparing share-class fees, and understanding the liquidity terms before committing capital. This article summarises reporting and is not investment advice.
