Preqin Acquisition: Key Details, Impact, and What Comes Next

BlackRock's acquisition of Preqin, valued at $3.2 billion, marks a significant move in the private markets data industry. This strategic purchase aims to integrate Preqin's extensive data capabilities with BlackRock's Aladdin platform, enhancing data-driven investment strategies. The deal underscores the growing importance of comprehensive data solutions in the evolving landscape of alternative investments.

What Is Preqin?

Preqin, a company specializing in alternative assets data, solutions, and insights, was founded in 2003. Its core offerings include comprehensive data services that cater to private equity, hedge funds, real estate, infrastructure, and private debt markets. Preqin differentiates itself through its extensive and specialized data coverage, providing valuable insights and analytics that support informed decision-making in the alternative investment space.

Who Acquired Preqin?

BlackRock is a global leader in investment management, providing a wide range of investment, advisory, and risk management solutions. The company's key products include mutual funds, ETFs (iShares), and private market investments. BlackRock also offers advisory services and risk management through its Aladdin platform. Known for its commitment to sustainability and corporate governance, BlackRock holds significant influence in the financial markets, with a strong presence across the U.S., Europe, Asia, and Latin America.

When Was Preqin Acquired?

BlackRock announced its acquisition of Preqin on June 30, 2024. This move comes at a pivotal time when private markets are experiencing rapid growth, with alternative assets projected to reach nearly $40 trillion by the end of the decade. The acquisition aligns with BlackRock's strategy to expand its Aladdin platform into the private markets data segment, addressing the increasing demand for standardized data, benchmarks, and analytics driven by institutional and wealth investors.

Why Was Preqin Acquired?

• Market Expansion: The acquisition of Preqin represents a strategic expansion of BlackRock's Aladdin tech business into the fast-growing private markets data segment. This move unlocks an additional $8 billion total addressable market, with private markets data expected to grow to $18 billion by 2030. Additionally, it brings in $240 million in recurring revenue for 2024 and expands BlackRock's client base by adding over 4,000 relationships across general partners, limited partners, and service providers.
• Technology Integration: The integration of Preqin’s data and research tools with Aladdin’s workflow capabilities will create a unified platform, enhancing BlackRock’s private markets technology and data offerings. This integration aims to provide a comprehensive solution for fund managers and investors across various functions such as fundraising, deal sourcing, portfolio management, accounting, and performance. It also aims to bridge the transparency gap between public and private markets through data and analytics.
• Competitive Advantage: By acquiring Preqin, BlackRock is set to become a dominant player in the private markets data segment. The integration of Preqin's data with the Aladdin platform will drive standardization and transparency in private markets, which have traditionally been less accessible and more opaque compared to public markets. This move is expected to set a new benchmark for data-driven investment strategies, influencing how other asset managers approach private markets and enabling better-informed decisions, risk management, and performance benchmarking for family offices and other investors.

Acquisition Terms

• Acquisition Price: $3.2 billion
• Payment Method: The acquisition will be paid in cash
• Key Conditions or Agreements:
  • BlackRock will acquire 100% of the business and assets of Preqin.
  • The transaction is expected to close before the end of 2024, subject to regulatory approvals and other customary closing conditions.
  • Preqin founder Mark O’Hare will join BlackRock as a Vice Chair after the close of the transaction.
  • Preqin will continue to be offered as a standalone solution.
  • The U.K. Competition and Markets Authority (CMA) is conducting a formal investigation to assess potential anti-competitive effects, with a decision due by February 12 on whether to escalate the case for a more in-depth probe.

Impact on Preqin

The acquisition of Preqin by BlackRock is set to bring significant changes to Preqin's operations and management. Preqin will be integrated with BlackRock’s Aladdin platform, enhancing its private markets capabilities while continuing to operate as a standalone solution. This integration aims to create a unified platform combining Preqin’s data and research tools with Aladdin’s workflow capabilities. Additionally, Preqin founder Mark O’Hare will join BlackRock as a Vice Chair, ensuring continuity and leadership during the transition.

In terms of product offerings and services, the acquisition will enhance Preqin’s data capabilities, providing comprehensive tools for fund managers and investors. The combined platform will offer improved data collection, benchmarks, and advanced analytics, driving transparency and accessibility in private markets. Employee reactions have been generally positive, with Preqin’s CEO expressing excitement about growth opportunities. However, some existing clients, particularly those who are BlackRock’s competitors, have shown discomfort. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly, ensuring a smooth and efficient transition.