Why Is BlackRock Acquiring Preqin?

BlackRock, the global investment giant, is set to acquire Preqin, a private markets data provider, for $3.2 billion.

BlackRock, the world’s largest asset manager and a leading technology provider to capital markets firms, recently announced its plan to acquire private markets data provider Preqin for US$3.2 billion. But why?

For starters, bringing together Preqin’s data and research tools with BlackRock’s Aladdin platform, and in particular its private markets solution eFront, would significantly bolster BlackRock’s alternative investment data and technology offerings and expand its client base.

It would also help to lock in BlackRock’s position as a leader in the growing private markets space, which, according to BlackRock, is the fastest growing segment of asset management, with alternative assets expected to reach nearly US$40 trillion by the end of the decade. 

Datos Insights believes the acquisition shines a light on several key industry themes:

  1. Expanding alternative data capabilities: Preqin’s comprehensive database covering private equity, venture capital, hedge funds, real estate, infrastructure, and private debt provides benefits to BlackRock from its position as an asset manager as well as a technology provider and data aggregator at a time when demand for private markets data continues to grow unabated. 
  2. Enhancing client offerings: Following integration of Preqin’s data and research, BlackRock will be able to provide its institutional and wealth management clients with deeper insights into alternative investments, increasing BlackRock’s competitive advantage with Aladdin competitors, such as those highlighted in Datos Insights Matrix: Front-to-Back Platforms.
  3. Growing importance of private markets: Despite the increased role of alternative assets in investment portfolios for both institutional and wealth investors, challenges remain around overall access to private markets as well as data transparency, availability, and standardization.
  4. Demand for front-to-back platforms: The acquisition and subsequent integration of Preqin’s offerings—with the capabilities of eFront and the Aladdin platform—further BlackRock’s strategy to make Aladdin the most comprehensive whole portfolio platform on the market.
  5. Market consolidation: The deal represents ongoing consolidation in the private markets financial data and analytics sector, as large players seek to expand their offerings through strategic acquisitions. Past examples include MSCI’s acquisition of private markets data and technology provider Burgiss in 2023, State Street’s acquisition of private markets investment data management platform provider Mercatus in 2021, and Morningstar’s acquisition of private markets data and analytics provider PitchBook in 2016.

Assuming the acquisition goes through, it will be interesting to see how quickly and easily BlackRock is able to leverage and integrate Preqin’s data and research tools into its own offerings and if, and for how long, BlackRock offers Preqin’s solutions as a stand-alone offering, which it reportedly plans to do.

Looking ahead, Datos Insights will continue to monitor how this acquisition impacts the competitive landscape for private markets data offerings (at this point all of the large independent providers have been acquired) as well as the landscape for holistic front-to-back investment platforms, such as BlackRock’s Aladdin.

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