BlackRock has announced its plan to acquire Preqin, a UK-based private markets data provider, for £2.55 billion ($3.2 billion) in cash.
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BlackRock will pay £2.55 billion ($3.2 billion) in cash for Preqin. The transaction is set to close later this year, pending regulatory approval. BlackRock outbid other major players including S&P Global and Bloomberg, in acquiring Preqin.
This acquisition represents BlackRock’s focus on alternative investments which include private equity, infrastructure and hedge funds.
Preqin’s data will be integrated into BlackRock’s Aladdin and eFront platforms enhancing the firm’s capabilities in risk and data management services for private and public market asset managers.
The deal comes during a surge in demand for detailed financial information driven by investors’ increasing interest in alternative assets.
Founded 20 years ago by Mark O’Hare, Preqin is a leading provider of data on private equity and hedge funds with approximately 200,000 users and data on 60,000 fund managers and 30,000 investors.
Preqin’s revenue has grown over 20% annually in recent years driven by the boom in private capital, which is projected to reach over $40 trillion by the end of the decade.
The asset management company is paying 13 times Preqin’s expected 2024 revenue of $240 million. Preqin is forecasted to generate about $240 million in recurring revenue in 2024.
Preqin’s data will bolster the asset management company’s private markets capabilities, providing fund managers and investors with improved data and tools.
The integration is expected to bridge the transparency gap between public and private markets enabling better-informed investment decisions.
The integration of Preqin’s data with BlackRock’s Aladdin platform will create a more robust solution for investment professionals, enhancing portfolio management, deal sourcing and risk management capabilities.
Preqin’s data will complement BlackRock’s existing offerings allowing for a more suite of financial information services.
By acquiring Preqin, BlackRock positions itself as a leader in the alternative assets space, staying ahead of competitors in the financial information sector.
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The acquisition cements BlackRock’s status as a player in the financial data industry, leveraging its scale to offer unparalleled services to its clients.
The interest in alternative assets has been growing as investors seek diversified portfolio options beyond traditional stocks and bonds.
The private capital market is on an upward trajectory with projected assets surpassing $40 trillion by 2030.
The acquisition of Preqin follows a trend of deals in the financial data sector, including S&P Global’s $44 billion takeover of IHS Markit and the London Stock Exchange Group’s $27 billion acquisition of Refinitiv.
The market for financial data is consolidating as major players seek to acquire specialized firms to enhance their data and analytics capabilities.
This is BlackRock’s second acquisition focused on private markets within six months. In January, BlackRock acquired Global Infrastructure Partners for $12.5 billion.
Preqin, founded in 2003, specializes in data for the alternative investment industry. It has seen a growth rate of approximately 20% per year over the past three years.
Preqin is expected to generate about $240 million in recurring revenue in 2024 and serves over 4,000 relationships with a global reach in more than 90 countries. Mark O’Hare, the founder of Preqin, will join BlackRock as a vice chair post-acquisition.
Private markets are the fastest-growing segment of asset management, with alternative assets expected to reach nearly $40 trillion by the decade’s end.
The private markets data segment is valued at $8 billion and it is anticipated to grow at 12% annually reaching $18 billion by 2030.
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