The transaction will be a cash deal, the US asset management group said.

(Updates with Morningstar commentary.)

Asset management titan BlackRock (with more than $10.5 trillion in AuM) is to buy alternative asset management data provider Preqin for £2.55 billion (about $3.2 billion) in cash. 

The deal, once completed, will combine Preqin’s data and research tools with Aladdin’s workflow capabilities in a unified platform, BlackRock said. The move also signals the US-listed group’s determination to push further into the private markets space, which BlackRock expects to reach nearly $40 trillion by the end of the decade.

“There is an even greater need for standardized data, benchmarks, and analytics that enable investors to better incorporate private asset classes into portfolios and provide fund managers with better data and tools to deliver outcomes for clients,” BlackRock said in a statement yesterday. “Private markets data is estimated to be an $8 billion total addressable market and growing 12 per cent per year, reaching $18 billion by 2030.”

Founded two decades ago, Preqin covers around 190,000 funds, 60,000 fund managers and 30,000 private markets investors, reaching more than 200,000 users, including asset managers, insurers, pensions, wealth managers, banks, and other service providers. BlackRock said that in 2024, Preqin is expected to generate about $240 million of “highly recurring” revenue and it has grown approximately 20 per cent per year in the last three years.

Through the Aladdin platform, BlackRock provides technology solutions to more than 1,000 clients. The combination of Preqin with eFront, Aladdin’s private markets solution, brings together the data, research, and investment process for fund managers and investors across fundraising, deal sourcing, portfolio management, accounting, and performance, BlackRock said.

Preqin will also continue to be offered as a standalone solution, the US firm continued. 

“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. We see data powering the industry across technology, capital formation, investing, and risk management,” Rob Goldstein, BlackRock chief operating officer, said.

Morningstar asked how BlackRock can use its Preqin acquisition to index- based products - such as iShares ETF offerings - to investors looking for access to the private capital markets.

"Alternative assets have historically only been open to institutional and other `sophisticated' investors, with the industry struggling for more than a decade to create retail products that would not only be attractive to investors, but also acceptable to the SEC, which requires a greater level of transparency and liquidity in retail products than private capital funds typically offer," Gregory Warren, CFA, strategist, Morningstar, said in a note. 

"The acquisition fits with management's goal of enhancing its private-market capabilities, with BlackRock looking to integrate Preqin's data and research tools with its own Aladdin enterprise system, much as it did with eFront. Preqin's subscription-based business is currently bringing in around $240 million in annual recurring revenue, with the firm's top line growing 20 per cent annually on average for the past several years," Warren said.