Investment data has come a long way from tickers, and next up is private market data.
Bettman Archive
All investors, including family offices, are increasingly turning to private markets in the evolving landscape of alternative investments. The relevance of data in this traditionally opaque area cannot be overstated, as almost every report says allocations to alternative assets are increasing.
BlackRock’s recently announced acquisition of Preqin, a leading provider of alternative market data, is a development that promises to reshape the investment strategies of family offices around the world. This may indicate that, in addition to the immediate benefits, there will also be an increased demand for other types of investors and investment data in the future.
Big data revolution in alternative investing
BlackRock’s agreed $3.22 billion acquisition of Preqin is poised to bring major changes to the way private markets are understood and operated. Preqin’s comprehensive data on private equity, real estate, hedge funds, and infrastructure will enable BlackRock to create indexes for private markets that are similar to public markets. “Just as indexes have become the language of public markets, we are committed to bringing the principles of indexing to private markets,” BlackRock Chairman and CEO Larry Fink said recently. I’m planning it,” he said.
The move underscores a broader trend in which data is becoming the basis of investment strategies. For family offices investing in alternative assets, having access to detailed and reliable data is invaluable. This enables better-informed decision-making, risk management, and performance benchmarking. By acquiring Preqin, BlackRock is taking a major role in private market data that can be relevant to pricing, sourcing, secondaries, risk management, and more.
Future Opportunities: The Intersection of Technology and Private Markets
The acquisition also highlights future opportunities at the intersection of technology and private markets. Sudhir Nair, Global Head of Aladdin, said: “Working with Preqin allows us to make investing in private markets easier and more accessible while building a closer platform for investors and fund managers. “This is a huge opportunity to bridge the transparency gap between public and private markets.” The integration of Preqin’s data with BlackRock’s Aladdin platform is a strategic move to enhance data collection, create benchmarks, and provide comprehensive tools for asset allocation and performance analysis.
Leveraging advanced analytics and seamlessly managing both public and private portfolios on a unified platform can be extremely valuable. Artificial intelligence will further support this trend, making the investment environment easier to navigate and more efficient. As private markets become less opaque, family offices stand to benefit from the increased transparency and education essential to democratizing alternatives.
Growth synergies and market integration
The acquisition of Preqin is not just an isolated event. This is part of BlackRock’s broader strategy. The company’s acquisition of Global Infrastructure Partners and integration of eFront earlier this year highlights a concerted effort to create an end-to-end private markets technology ecosystem.
Market consolidation will also play a key role in this transformation, as the private market landscape is currently fragmented and crowded with many small, local, niche boutiques. Consolidation makes accessing data faster and easier, making the goal of creating a comprehensive index more achievable.
Navigating competitive dynamics
One of the challenges highlighted in the call with analysts was the potential discomfort of Preqin’s existing customers, many of whom are BlackRock’s competitors. However, BlackRock Chief Operating Officer Rob Goldstein said the integration prioritizes the interests of customers and will maintain Preqin as a standalone service while expanding the reach of BlackRock’s Aladdin platform. It reassured me.
“Every acquisition has been an opportunity to strengthen our capabilities for our clients. In fact, we have been a client of Preqin for many years and look forward to welcoming the talented Preqin team to BlackRock,” said Goldstein. .
Goldstein also said he believes data is empowering the industry across technology, capital formation, investments and risk management. A commitment to protecting data and being transparent about how it is used is key to success.
Positioning for the future
The acquisition of Preqin is a strategic milestone for BlackRock and reinforces the company’s commitment to putting private markets at the core of its investment and technology strategies. For family offices, this development offers an opportunity to enhance their investment approach with robust data and sophisticated tools. As BlackRock continues to drive innovation in private markets, family offices can look forward to a future where data-driven insights and technology pave the way for more informed and effective investment strategies.
In summary, BlackRock’s acquisition of Preqin is more than just a business deal. This is a step toward transforming the private market landscape. For family offices, that means a future where data, technology and strategic insights come together to unlock new investment opportunities and drive growth in the alternative asset space.
