BlackRock Pushes Into Private Markets With $3.2B Deal for Preqin

The BlackRock deal highlights a move by some of the world’s largest asset managers into the very private world of private markets investing. 

Photo of a BlackRock building
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The “shadow banks” that were blamed for much of the financial crisis may be stepping back into the limelight. 

Once a murky corner of the investing landscape, private investments that offer stakes in deals not available on traditional exchanges — like private equity, home lending, real estate, or infrastructure — are quickly becoming an area of increased focus for everyday investors. BlackRock’s $3.2 billion megadeal for the U.K-based alternative data and analytics provider Preqin highlights a massive push by some of the world’s largest asset managers into the very exclusive world of private markets.

Private Parts

The deal, announced on Monday, would fold Preqin’s reporting of some 190,000 private investments for 200,000 users into the firm’s global technology architecture. BlackRock, famed for its passive investing strategies in its iShares segment, also hinted at the ability to launch exchange-traded funds of private placements that will help give retail investors more transparency and suck up even more investment dollars. According to BlackRock, Preqin is expected to generate roughly $240 million in recurring revenue and has grown approximately 20% per year in the last three years. 

Preqin provides data on private investments, which have become popular tools in recent years. Private markets can outperform public investments over time, and can help boost diversification in client portfolios. Of course, the deals are also much less liquid than equities, meaning investors have to lock up their money for years or decades, and can often come with much greater risk:

  • Assets have more than tripled to $11.8 trillion in 2023 over the past decade, according to data from the World Economic Forum. 
  • Private markets were traditionally the realm of institutional investors, but many investments have now opened up to retail investors.
  • Growth is expected to continue, with assets topping $18.3 trillion by 2027.

Behind the Curtain: The Securities and Exchange Commission is aiming to pass sweeping regulations that would curtail private equity groups, hedge funds, and real estate investment firms. The hope is to bring oversight and transparency, although the plan is getting pushback and being labeled as a gross regulatory overstep.

Transparency is the No. 1 objective of the initiative, according to the Commission, which would require funds to actually provide detailed performance reports each quarter. What a novel idea.