BlackRock Aims to ‘Index the Private Markets’ After Preqin Deal

01/07/2024

Larry Fink, chairman and chief executive officer of BlackRock Inc., during a Bloomberg Television interview in New York, US, on Tuesday, March 26, 2024. Fink today said the US public debt situation "is more urgent than I can ever remember" and that the country needs to adopt policies to spur economic growth.

(Bloomberg) -- BlackRock Inc. Chief Executive Officer Larry Fink said its acquisition of data provider Preqin will allow the firm, best known for its index funds, to apply the format to fast-growing assets.

“We believe we could index the private markets,” Fink said on a call with investors and analysts on Monday after the New York-based money manager announced the £2.55 billion ($3.2 billion) deal. “Just as index has become the language of public markets, we envision we could bring the principles of indexing even iShares to the private markets.”

The deal to acquire the London-based private capital database provider accelerates BlackRock’s push to become a major player in alternative assets and follows the firm’s announcement that it would buy Global Infrastructure Partners for $12.5 billion.

Fink said indexes and data will ultimately drive “the democratization of all alternatives,” and Fink and senior executives on Monday said the Preqin deal is about the ability of data and analytics to broaden access to private assets in the coming years.

Private markets are the fastest-growing part of asset management, with alternative assets overall expected to reach nearly $40 trillion by the end of the decade, according to BlackRock’s statement. That’s prompting surging demand from investors for relevant data, with the total addressable market expected to reach $18 billion by 2030, up from around $8 billion today.

Fink said on Monday’s call that the rise of data, benchmarks and risk analytics software transformed public markets, made them more accessible to investors and increased transparency in performance and drivers of return.

“They’ve grown durable, high-growth revenue pools that are adjacent to asset management and they have generated enormous value for clients and shareholders,” he said. “Our aim is to do all of that in the far less mature data, analytics and index business for all the private markets.”

Preqin covers 190,000 funds, 60,000 fund managers and 30,000 private markets investors, according to a statement on Sunday. It’s used by money managers, insurers, pensions and wealth managers, among others, and has grown approximately 20% per year in the past three years.

The transaction is expected to close before the end of the year, subject to regulatory and other necessary approvals.

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