Financial services giant BlackRock has made a significant move into the UK private markets data space by acquiring Preqin for £2.55bn in cash. This acquisition marks BlackRock’s entrance into the financial information provision sector, as the $10.5tn asset manager continues to expand its presence in alternative assets.
The purchase of Preqin comes as part of a trend in the financial industry, where data providers are becoming increasingly sought after by private equity groups, asset managers, and larger information businesses. Institutions are racing to meet investors’ demands for detailed information on various financial markets, including private equity, infrastructure, and hedge funds.
BlackRock’s acquisition of Preqin follows a string of similar deals in recent years, including S&P Global’s takeover of IHS Markit for $44bn in 2020. The trend has seen buyout groups targeting smaller players like Permira’s acquisition of Reorg, valuing the distressed debt and bankruptcy information provider at about $1.3bn.
This move by BlackRock represents their second major acquisition in private markets in six months, following a $12.5bn deal to buy Global Infrastructure Partners in January. The transaction, which is set to close in the third quarter, aligns with BlackRock CEO Larry Fink’s focus on alternative assets and the company’s technology arm, which offers risk and data management services to asset managers in both public and private markets.
Founded 20 years ago, Preqin specializes in tracking the performance of private equity and hedge funds, boasting about 200,000 users and supplying data on 60,000 fund managers and 30,000 investors. The company’s annual revenue has seen consistent growth of over 20% in the past three years, benefiting from the ongoing growth in private capital markets expected to exceed $40tn by the end of the decade.
BlackRock’s acquisition of Preqin includes plans to keep it as a separate offering while integrating its data feeds into the company’s risk management platforms. The deal, set to be finalized later this year, also involves Preqin’s founder, Mark O’Hare, taking on a role as vice-chair at BlackRock. This strategic move emphasizes the increasing importance of data, technology, and analytics in the evolving landscape of portfolio construction and risk management within the financial industry.