The U.K.’s competitions watchdog is inviting comments from interested parties on BlackRock’s deal to buy private markets data firm Preqin.
The Competition and Markets Authority said on Dec. 3 that it decided to investigate the $3.2 billion cash deal, announced in the summer.
The deal is set to expand BlackRock’s Aladdin technology and data platform capabilities, and to unlock an additional $8 billion in addressable market, the $11.48 trillion manager said at the time.
By Dec. 17, the CMA wants interested parties to submit initial views on the impact the deal could have on U.K. competition, and reiterated that it has not yet launched a formal investigation. “This invitation to comment is the first part of the CMA’s information-gathering process,” it added.
Data provider Preqin was founded in 2003 and is based in London. It has 16 offices across the globe, covers 190,000 funds, 60,000 money managers and 30,000 private markets investors.
The CMA is considering whether the deal, expected to close by year-end, “may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services,” the CMA said in a statement on its website.
Preqin and BlackRock declined to comment.
The CMA tracks activity to determine whether mergers may negatively impact competition in the U.K. If the watchdog believes competition concerns arise, it may decide to assess the situation through an investigation. The CMA is a non-ministerial government department under the U.K.'s Department for Business and Trade.
In an investor presentation at the time of the deal announcement, BlackRock said Preqin was a “premier private markets data provider,” with an expected about $240 million in annual recurring revenue in 2024. Its customer base is split across LPs, GPs and service providers, and it has more than 4,000 relationships.
Preqin has information on alternative asset classes at a global level, covering hedge funds, infrastructure, natural resources, private debt, private equity, real estate, secondaries and venture capital.
BlackRock said Preqin’s data and research tools would be brought together with its technology unit Aladdin in a unified platform, but that clients would be able to choose Aladdin, eFront — its private markets solution acquired in 2019 — or Preqin as stand-alone offerings or combined.
In an analyst call on July 1, BlackRock Chair and CEO Larry Fink said the acquisition could unlock the indexing of private markets.
In the call, it was noted that a large portion of Preqin’s customer base is probably BlackRock competitors within private markets.
In response to an analyst question on whether existing Preqin clients might be comfortable with the platform becoming part of BlackRock, Chief Operating Officer Rob Goldstein noted that the fastest-growing part of the Aladdin business is actually other asset managers.
“So this is something that we're quite accustomed to in terms of being a platform as a service and our broader technology business,” Goldstein said. “With regard to Preqin, in particular, we're very confident that clients will be the biggest beneficiary from the transaction. It increases our Aladdin client reach fivefold and if clients choose to, they'll have the opportunity to seamlessly manage public and private portfolios together across both workflow and data on a single unified platform.”
BlackRock has been on the acquisition trail of late, particularly in private markets where it sees the potential for huge growth. On Dec. 3, it confirmed the much-speculated-upon deal to acquire New York-based private credit specialist HPS Investment Partners in a $12 billion deal, and earlier this year said it would buy Global Infrastructure Partners in a $12.5 billion agreement.
