BlackRock to Acquire Preqin for $3.2 Billion to Expand in Private Markets
BlackRock Inc. has struck a deal to buy Preqin, a private capital database provider, for £2.55 billion ($3.2 billion) in cash as it cements its position in the alternative assets space. The deal is part of BlackRock’s current enormous effort in enhancing its ability to oversee risks and make the most of data, as the current fast-growing private asset markets shape up.
Making Data Work in Asset Management
The purchase of Preqin by BlackRock comes at a time when the investment giant has been touting data as a major driver of decision-making in everything from technology and capital formation to investing and risk management. According to Rob Goldstein, COO of BlackRock, data is the cornerstone on which innovation and efficiency are built in the financial services industry.
Growth in Private Markets
The current highest growth segment in the asset management sector, which coincidently is also projected to be valued at $40 trillion by the end of the this decade, is the private markets and alternative assets. To that effect, this demand for private asset data, indeed speaks to the value proposition gained through acquiring Preqin by BlackRock.
Strategic Acquisitions
The current venture into private markets by BlackRock, is part of a sector broader move and follows an acquisition made earlier in the year by Global Infrastructure Partners for about $12.5 billion. With a focus on diversifying its offerings beyond traditional stocks and bonds, BlackRock has been strategically investing in technology, risk management, and private debt capabilities to meet evolving client needs.
Unlocking Opportunities
The comprehensive coverage of funds, fund managers, and investors provided by Preqin, supplemented with the 20% growth rate on an annual compound basis over the last three years, makes it a valuable resource for quite a wide range of financial institutions. The transaction is expected to be finalized by the end of the year, pending regulatory approvals.
Advisory Partnerships
Barclays Plc and Skadden, Arps, Slate, Meagher & Flom advised BlackRock on the acquisition, while Goldman Sachs Group Inc. and Macfarlanes supported Preqin in the deal. The collaboration between these financial and legal experts highlights the strategic importance of this acquisition for both parties involved.
Competition and Collaboration
It has been widely expected that Preqin will eventually be competing head-to-head with firms such as Bloomberg LP in the future, which would further emphasize the competition within the financial data industry. In a world where BlackRock is increasingly dominant in private markets, collaboration and innovation will shape the future of asset management.
