BlackRock (BLK), the world's largest asset manager, announced late Sunday that it will buy U.K.-based private markets data provider Preqin for approximately $3.2 billion in cash.
BlackRock's Aladdin platform provides technology solutions to more than 1,000 clients. The combination of Preqin with eFront, Aladdin's private markets solution will bring "together the data, research, and investment process for fund managers and investors across fundraising, deal sourcing, portfolio management, accounting, and performance," BlackRock said.
"Together with Preqin, we can make private markets investing easier and more accessible while building a better-connected platform for investors and fund managers," Sudhir Nair, global head of Aladdin, said in a statement. "This presents a substantial opportunity for Aladdin to bridge the transparency gap between public and private markets through data and analytics."
Private markets are the fastest growing segment of asset management, and private markets data is expected to see its total addressable market grow at a rate of 12% per year and reach $18 billion by 2030, BlackRock said.
"As clients increasingly evolve their focus from choosing products to constructing portfolios, this shift requires technology, data, and analytics that create a 'common language' for investing across both public and private markets," said BlackRock Chief Operating Officer Rob Goldstein in a statement. "We see data powering the industry across technology, capital formation, investing, and risk management."
The transaction is subject to regulatory approvals and other customary closing conditions, BlackRock said. If all goes as planned, the deal is expected to close before the end of 2024.
Is BlackRock stock a buy, sell or hold?
Wall Street is bullish on the financial stock. According to S&P Global Market Intelligence, the average analyst target price for BLK stock is $913.53, representing implied upside of about 17% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Jefferies is one of the bullish outfits on the blue chip stock with a Buy rating and $908 price target, and it sees the acquisition of Preqin as a positive for BlackRock.
"The combination of Preqin with Aladdin and eFront will allow BLK to integrate private markets investment workflows with proprietary data that touches all aspects of private markets including fundraising, deal sourcing, portfolio monitoring, accounting, and performance," Jefferies analyst Daniel Fannon said in a July 1 note. "Preqin will also expand BLK's client base adding 4,000+ relationships across general partners, limited partners, and service providers."
