BlackRock to Acquire Preqin: Dominating Private Markets Data
Published: July 1st, 2024.
In a landmark deal, BlackRock, Inc. (NYSE: BLK), a global investment management corporation, announced their acquisition of Preqin, a premier independent provider of private market data, for £2.55 billion, or approximately $3.2 billion in cash. This acquisition is set to integrate Preqin’s extensive data and research tools with BlackRock’s Aladdin platform, creating a powerhouse in the private market technology and data sector.
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A Booming market segment
Private markets represent the fastest-growing segment within asset management. Alternative assets are projected to nearly double, reaching $40 trillion by the decade's end. Increased allocations from institutional and wealthy investors seeking to diversify their portfolios with alternatives drive this surge. BlackRock’s strategic acquisition of Preqin positions them to capitalize on this growth by enhancing their private markets franchise, providing clients with standardized data, benchmarks, and analytics necessary for informed investment decisions.
Private markets data, estimated at an $8 billion total addressable market and growing at 12% annually, is expected to reach $18 billion by 2030. This burgeoning market underscores the critical need for robust data solutions to support investment strategies.
Preqin’s expertise and reach
Founded over twenty years ago, Preqin has established themselves as a leading private market data provider. Their comprehensive database covers 190,000 funds, 60,000 fund managers, and 30,000 private market investors. Preqin’s tools and insights serve more than 200,000 users globally, including asset managers, insurers, pensions, wealth managers, and banks. Preqin is anticipated to generate around $240 million in highly recurring revenue in 2024, reflecting a consistent growth rate of approximately 20% per year over the past three years.
By joining forces with Preqin, BlackRock aims to enhance their Aladdin platform, already utilized by over 1,000 clients. Integrating Preqin’s data will augment Aladdin’s private market solutions, covering aspects such as fundraising, deal sourcing, portfolio management, accounting, and performance evaluation. Despite the integration, Preqin will continue to operate as a standalone solution, maintaining their independent service offerings.
Leadership and vision
Rob Goldstein, BlackRock’s Chief Operating Officer, emphasized the strategic alignment of this acquisition with BlackRock’s vision. “BlackRock’s goal has always been to integrate investments, technology, and data to provide comprehensive solutions for our clients’ portfolios. Adding Preqin allows us to bridge the transparency gap between public and private markets, creating a unified ‘common language’ for investment.”
Sudhir Nair, Global Head of Aladdin, highlighted the significance of this move in making private market investing more accessible and transparent. He pointed out that collaborating with Preqin would enhance Aladdin’s ability to provide critical data and analytics to fund managers and investors.
Preqin’s founder, Mark O’Hare, who will join BlackRock as a vice chair post-acquisition, expressed his enthusiasm for the partnership. “BlackRock is renowned for its excellence in investment management and financial technology. Together, we can accelerate the delivery of superior private market data and analytics to our clients at scale.”
Transaction Details & Future Outlook
The acquisition deal stipulates that BlackRock will acquire 100% of Preqin’s business and assets. Pending regulatory approvals and customary closing conditions, the transaction is expected to close before the end of 2024. Barclays served as BlackRock's lead financial advisor, while Skadden, Arps, Slate, Meagher & Flom acted as legal counsel. Goldman Sachs International and Macfarlanes provided financial and legal advisory services to Preqin, respectively.
Teleconference and webcast
To discuss the transaction, BlackRock will host an investor call on July 1, 2024, at 8:30 a.m. ET. Interested parties can participate via teleconference or a live webcast on BlackRock’s investor relations website. A replay of the webcast will be accessible by 11:30 a.m. ET the same day.
About BlackRock & Preqin
BlackRock’s mission is to help people achieve financial well-being. As a fiduciary and leading financial technology provider, BlackRock simplifies investing for millions of people globally.
Preqin, the Home of AlternativesTM, equips financial professionals with essential data and insights to confidently navigate the global alternative market.
Forward Outlook
In summary, BlackRock’s acquisition of Preqin represents a significant strategic move to dominate the private market data segment, enhancing its ability to provide comprehensive data-driven solutions to a growing market of alternative asset investors.