Michael Sidgmore’s Post

🤑 Exciting news from BlackRock! They’re acquiring Preqin for $3.2 billion, marking a significant step into private markets data. 💰 This move enhances BlackRock’s Aladdin platform, combining data, research, and investment processes. Preqin's impressive growth—20% annually and $240 million in revenue—highlights the potential of private markets data. With alternative assets expected to reach $40 trillion by the end of the decade, the demand for standardized data and analytics is skyrocketing. This acquisition is a testament to the evolving landscape of investment management, where technology, data, and analytics play a crucial role. Let’s embrace these changes and continue to innovate in our industry! 🚀

BlackRock's Big Bet on Private Data: A Game Changer for Alternative Investments? Big news in the investment world! BlackRock's acquisition of Preqin for $3.2 billion marks a significant move for the world's largest asset manager. This strategic buy signals BlackRock's accelerated push into alternative assets, a market expected to reach nearly $40 trillion by the end of the decade. Why is this a game changer? Data is king: Preqin's data and research tools will be integrated with BlackRock's Aladdin platform, creating a powerhouse of information for private market investors. This could lead to more informed decision-making, better deal flow, and ultimately, higher returns. Unlocking private markets: Private markets, which include private equity, venture capital, and real estate, have traditionally been less transparent than public markets. By making this data more accessible, BlackRock could open up these lucrative investments to a wider range of investors. The rise of the alternatives: As traditional asset classes struggle, investors are increasingly looking to alternative assets for diversification and growth. BlackRock's move positions them as a leader in this growing space. Impact on the economy? Increased investment activity: Easier access to private markets could fuel a surge in investment, potentially leading to job creation and economic growth. Innovation boost: More capital flowing into private companies, particularly startups and early-stage ventures, could accelerate innovation across different sectors. Potential risks: Increased competition for deals could drive up valuations, and a concentration of power in the hands of large asset managers could raise concerns about systemic risk. Overall, BlackRock's acquisition of Preqin is a sign of the times. As the world of finance evolves, data-driven insights and alternative investments are becoming increasingly important. The long-term impact on the economy remains to be seen, but one thing is certain: this is a move with significant ramifications for the future of asset management. #BlackRock #AlternativeInvestments #PrivateMarkets #FinancialTechnology #InvestmentBanking

MarketsMedia - BlackRock Aims to Index Private Markets with $3.2b Preqin Deal “We envision we can bring the principles of indexing, and even iShares [BlackRock’s exchange-traded funds business], to the private markets,” Larry Fink, chairman and chief executive of BlackRock. “Aladdin models over 100,000 public market benchmarks that help investors make informed decisions and power world class portfolios,” Rob Goldstein, chief operating officer. “We envision a world where we bring that level of precision, discipline and transparency to private market portfolios.” “We anticipate indexes and data will be important future drivers of the democratisation of all alternatives, and this acquisition is the unlock.” “The longer term opportunity is leveraging our engines, Aladdin, indexing and our capital markets expertise to build the machine for the indexing of private markets,” Martin Small, chief financial. “We think we can bring new products to market based on this data and we have a strong track record of accelerating revenue growth by bringing firms into BlackRock.” https://lnkd.in/e-q8QQgb

This move marks a significant step as the world’s largest asset manager accelerates its push into alternative assets. As the financial landscape rapidly evolves, alternative investments are poised to become the next big wave, unlocking innovative avenues for growth and diversification! #AlternativeInvestments#PrivateEquity#Diversification

Private Data = Clean Data = Clearer results in #Alternatives with #GenerativeAI = #Tokenization of #RWA BlackRock's closing its $3.2bn Prequin acquisition is a case in point Crowning the firm's recent acquisition trifecta of Global Infrastructure Partners at $12.5bn Kreos at ~400m (Private debt) & eFront at ~$1.3bn (Private asset market software) #AI is a fast track to #tokenisation of real world assets in alts Increasing the pace of private debt which remains fixed in overdrive to supersede the traditional banking sector. https://lnkd.in/eJi8NmQg #RWA https://lnkd.in/eJi8NmQg

BlackRock's $3.2 billion acquisition of Preqin marks a significant expansion into the alternative investment space, where they have traditionally played a modest role. This strategic move showcases BlackRock's ambition to dominate private markets by harnessing Preqin's extensive data and analytics capabilities. A few takeaways:   A. Previously seen as an independent and unbiased data source, there are concerns about whether Preqin's integration into a massive firm like BlackRock will affect its objectivity. B. As BlackRock strengthens its presence, the demand for comprehensive data solutions will rise, potentially driving innovation and elevating industry standards. C. For financial professionals such as advisors and investment managers, staying ahead means embracing data-driven approaches and investing in cutting-edge technology to navigate the complexities of private markets while monitoring the evolving landscape of data integrity. For more details, you can read the full article on Bloomberg. #privatemarkets #secondaries #AlternativeInvestments

BlackRock is set to acquire Preqin for $3.22 billion. This acquisition will enhance BlackRock's already significant data capabilities. What does Preqin do? Preqin is a leading provider of data, analytics, and insights for the alternative assets industry. They specialize in private equity, venture capital, hedge funds, private debt, real estate, infrastructure, and natural resources. By offering comprehensive data and analysis, Preqin helps investors, fund managers, and financial professionals make informed decisions and stay ahead of market trends. Why is this significant? Strategic Expansion: This acquisition aligns perfectly with BlackRock's strategy to expand its private market operations, which are the fastest-growing segment of asset management. Data Analytics: Integrating Preqin’s extensive database with BlackRock’s Aladdin platform creates a preeminent private markets technology and data provider. Market Influence: Highlights the growing importance of data in investment strategies. Private markets are expected to reach nearly $40 trillion by the end of the decade. BlackRock will continue to offer Preqin as a stand-alone service while leveraging it within its proprietary Aladdin software, enhancing its already powerful suite of tools. This move is set to bolster BlackRock’s offerings in alternative assets, an area projected to see significant growth. #Finance #Investment #DataAnalytics #BlackRock #Preqin #AlternativeInvestments #FinancialServices

PRESS RELEASE -- BlackRock Teams With GeoWealth to Offer Custom Models Featuring Simplified Access to Private Markets: https://bwnews.pr/3RIYNxD BlackRock and GeoWealth to Deliver Automated Custom Models to Enable Access to Private Markets, Direct Indexing and Fixed Income SMAs in Addition to ETFs and Mutual Funds in a Single Account “By combining BlackRock’s portfolio design expertise with GeoWealth’s implementation platform, we will make it easier for advisors to build a models-based practice and enable broader access to private markets – one of today’s most sought-after asset classes,” said Eve Cout, Head of Portfolio Design & Solutions within BlackRock’s U.S. Wealth Advisory business. “This initiative supports our goal of helping more and more advisors meet the evolving needs of their clients, who increasingly seek more diversified, personalized and tax-efficient strategies.” Read the press release here: https://bwnews.pr/3RIYNxD

BlackRock, which is no stranger to m&a-led growth, has agreed to acquire Preqin for £2.55bn in cash with an implied acquisition multiple of 13x 2024E EV/Revenue to double down on private markets, market data and its platform push. My personal take on the deal, and what this portends for asset management at large: 1. Data-driven decision making: BlackRock's acquisition of Preqin highlights the increasing importance of data and analytics in investment decision-making, especially in private markets. 2. Convergence of public and private markets: The move suggests a growing trend of traditional asset managers expanding into alternative investments. 3. Technology as a competitive advantage: BlackRock is creating a comprehensive ecosystem for investors. This integration of data, research, and investment processes demonstrates how technology is becoming a key differentiator in asset management, and at the heart of our push at Smartkarma. 4. Valuation: 13x revenue multiple implies a high valuation for specialized financial data providers, reflecting the market's recognition of the critical role data plays in modern investment strategies; along with the emphasis on scale. 5. Anticipation of private market growth: The substantial investment indicates strong confidence in the onward growth of private markets, aligning with projections of alternative assets reaching $40t by the end of the decade. Returns might vary though. 6. Trend towards vertical integration: This acquisition allows BlackRock to offer a more comprehensive suite of services to its clients, showcasing a trend towards vertical integration in the industry. Could BlackRock have done better? 1. Strategic fit: The deal aligns well with BlackRock's goal to expand its presence in private markets and enhance its data capabilities. It's difficult to argue against the strategic rationale. 2. Price: 13x 2024E EV/Revenue seems high at first glance. However, given the scarcity of scaled high-quality data providers in private markets and Preqin's market-leading position, this premium might be justified. 3. Alternatives: BlackRock could have considered: a) Building similar capabilities in-house, which might have been cheaper but time-consuming and risky. b) Acquiring smaller, niche players and integrating them, which could have been less expensive but more complex. c) Partnering with Preqin instead of acquiring, which might have provided some benefits without the full cost. 4. Integration risks: As with any large acquisition, there are risks in integrating Preqin with BlackRock's existing systems and culture. What’s next? The acquisition will likely prompt responses from competitors, potentially triggering a wave of consolidation in the industry. I expect exchanges (old and new), as well as other scaled AMCs to sit up and take note. https://lnkd.in/gcP_wPPS

BlackRock is set to revolutionize private markets by indexing them, enhancing transparency and accessibility for investors. - 📈 Aims to index private markets - 🛠️ Utilizes Preqin's data and analytics - 🌐 Integrates with Aladdin platform - 🔍 Enhances transparency and risk management - 💡 Democratizes access to private investments #investment #fintech #innovation - 📊 Preqin's data will provide comprehensive insights into private market performance. - 🖥️ Aladdin platform integration will streamline risk management and decision-making. - 🌍 Global reach offers local connectivity and unique opportunities. - 📉 Indexing private markets aligns with BlackRock's strategy for holistic investment tools. - 🚀 Investor empowerment through enhanced access and transparency in private markets. BlackRock Aims to ‘Index the Private Markets’ After Preqin Deal https://lnkd.in/g5i-GvV6