Navigating the reefs and shoals of private markets is more important than ever, given the billions of dollars flowing into these sometimes opaque and illiquid assets.

Preqin, which provides tools and insights for the alternative investments sector, has launched Transaction Intelligence, a  solution helping investment professionals navigate private markets.

The offering is available to clients via the Preqin Pro platform or as a standalone product. It provides aggregated and anonymized transaction data at the deal and asset-level. The solution uses data from more than 6,500 funds.

Investors, intermediaries and regulators are trying to grasp private markets’ performance as billions of dollars continue to flow into the sector, as regularly recounted by this publication. (See an example here.) Private markets – covering equity, debt, infrastructure, real estate and others – have boomed on the back of a decade-plus of ultra-low interest rates (which squeezed listed markets’ yields) and a structural shift from public to unquoted company ownership.

Unquoted firms typically aren’t required to disclose as much information as a business listed on the Nasdaq or London Stock Exchange, for example, which means that tracking these investments is more laborious.

To illustrate what Transaction Intelligence can show, Preqin said it found that since January 2018, across five major industries (consumer discretionary, financial and insurance services, healthcare, industrials, and IT), industrials showed strength with only 17 per cent of deals below invested capital ($10 billion out of $214 billion). Consumer discretionary had the biggest write-downs at $32 billion and 24 per cent loss-making deals ($358 billion invested).

The surge
Preqin reckons that global alternatives assets under management are expected to reach $24.5 trillion by the end of 2028, from an estimated $16.3 trillion at the end of 2023. 

Transaction Intelligence can offer the following features, Preqin said: 

-- Demonstrate a fund’s strategy and returns against the market at a deeper level; 
-- Create benchmarks with custom criteria and accurate, timely transaction data; 
-- Ensure valuation models are using relevant peer transactions conducted in the private markets instead of public data measures; 
-- Identify attractive sectors and strategies based on transacted deals, while underwriting assumptions for investment committees; 
-- Help investors refine selection criteria and diligence processes; and 
-- Understand where losses are occurring within portfolios.