Global assets management and financial services company BlackRock (NYSE: BLK) is to acquire London-based private markets data company Preqin for £2.55 billion ($4.8 billion).
BlackRock plans to combine Preqin with its Aladdin business, which provides private markets data platform eFront.
The vendors are Valhalla Ventures, the family holding company of Preqin founder Mark O’Hare, plus Preqin management and employees.
Announcing the deal on 30 June, BlackRock said: “Bringing together Preqin’s data and research tools with Aladdin’s complementary workflow capabilities in a unified platform will create a preeminent private markets technology and data provider. The acquisition adds a highly complementary data business to BlackRock’s investment technology, marking a strategic expansion into the fast-growing private markets data segment.”
Preqin chief executive Christoph Knaack said the deal reflected the continuing evolution of private markets and would take the business and its employees into a new growth phase.
Private markets are the fastest growing segment of asset management, with alternative assets expected to reach nearly $US40 trillion by the end of the decade.
The addressable market for private markets data is estimated at $US8 billion. Allowing for estimated growth of 12% a year, that will reach $US18 billion by 2030.
Servicing demand from clients, BlackRock has been building is own private markets franchise with Aladdin but it said it was increasingly important to standardise data, benchmarks and analytics to enable investors to better incorporate private asset classes into portfolios and to provide fund managers with better data and tools.
Over 20 years, Preqin has built up global coverage of 190,000 funds, 60,000 fund managers and 30,000 private markets investors. The firm has more than 200,000 users including asset managers, insurers, pension funds, wealth managers, banks and other service providers.
Aladdin’s eFront platform has around 1,000 clients.
Under BlackRock’s ownership, customers will still be able to subscribe to the Preqin platform separately from eFront.
BlackRock chief operating officer Rob Goldstein said, as the firm’s clients evolved their focus from choosing products to constructing portfolios, they were becoming more dependent on technology, data and analytics that create a ‘common language’ for investing across both public and private markets.
“We see data powering the industry across technology, capital formation, investing and risk management,” he said.
Global head of Aladdin, Sudir Nair, said: “Together with Preqin we can make private markets investing easier and more accessible while building a better-connected platform for investors and fund managers.”
According to BlackRock, Preqin has grown its revenue by around 20% a year over the last three years and should generate revenue of around $240 million over the current year.
Preqin founder Mark O’Hare is to join BlackRock as a vice chair after the acquisition transaction closes.
Barclays served as lead financial adviser to BlackRock with Skadden, Arps, Slate, Meagher and Flom acting as legal counsel. For Preqin, Goldman Sachs International served as financial adviser and Macfarlanes as legal counsel.
Image: Preqin founder Mark O’Hare.