BlackRock Inc. BLK has completed the acquisition of Preqin, a premier independent provider of private markets data, solidifying its private markets capabilities to cater to the rising demand among clients.
 
Despite this, BLK’s shares fell 1.2% during Monday’s trading session on broader market weakness.

Details of BlackRock’s Acquisition

The deal, announced in June 2024, for almost $3.2 billion (£2.55 billion) in cash, reflected a significant milestone in BlackRock’s strategy to enhance its private markets capabilities by integrating investments, technology and data across the entire portfolio.

From the start, Preqin will expand BlackRock’s technology offerings, ensuring clients can continue using the former with the same level of expertise. It will remain a standalone solution, while joint customers will immediately benefit from product integrations like access to Preqin benchmarks within Aladdin.

Over time, BlackRock will integrate Preqin’s proprietary data and research tools into Aladdin and eFront. The integration will transform the landscape of private markets investing across fundraising, deal sourcing, portfolio management, accounting and performance reporting.

Mark O’Hare, founder of Preqin, has joined the BlackRock board as a vice chair upon the completion of the deal.

Sudhir Nair, global head of Aladdin, stated, “We are on a journey to make private markets more accessible and transparent for clients through data and technology. We accelerated this ambition in 2019 with our acquisition of eFront, enhancing private markets investment technology and, in combination with Aladdin, enabling the whole portfolio across public and private assets. Today, this ambition takes another leap forward with the addition of Preqin’s data, benchmarks and analytics capabilities.”

Rationale Behind BlackRock’s Buyout

Private markets are the fastest-growing segment of global investing. This is demonstrated by the rising demand among investors. Institutional and wealth investors have been increasing their portfolio allocations toward private markets to generate higher returns and optimize returns through diversification benefits. However, these allocations have been limited due to transparency concerns.

With Preqin, BLK aims to address this concern, positioning its private markets platform to deliver investments, technology and data holistically to power next-generation investment solutions for clients.

The acquisition significantly enhances BlackRock’s investment technology capabilities, marking a strategic expansion into the rapidly growing private markets data segment.

Rob Goldstein, chief operating officer of BlackRock, said, “Today, clients are seeking a ‘common language’ for investing that requires better data to drive investment decisions, manage risk and construct portfolios. With Preqin, a part of BlackRock, we will seek to meet this need, accelerating clients’ ability to allocate to the growth of private markets and furthering our aspirations to deliver greater value across their whole portfolios.”

The move aligns with BlackRock’s inorganic growth strategy to boost its presence domestically and globally. In December 2024, the company announced a deal to acquire HPS Investment for $12.1 billion to expand into the private credit market. In October 2024, it acquired Global Infrastructure Partners to enhance its infrastructural offerings and origination capabilities, while in May, it completed the buyout of the remaining 75% stake in SpiderRock to strengthen its separately managed accounts offerings.

BlackRock’s Zacks Rank & Price Performance

Over the past year, shares of BlackRock have gained 16.9%, underperforming the industry’s 19.7% growth.

Image Source: Zacks Investment Research

Currently, BLK carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Similar Steps by Other Finance Firms

Last month, Old Second National Bancorp, Inc. OSBC agreed to acquire Bancorp Financial, Inc. and its wholly-owned subsidiary, Evergreen Bank Group. The transaction is valued at roughly $197 million. The consideration will be paid in 75% stock and 25% cash.

The deal is anticipated to be roughly 16% accretive to OSBC’s 2026 earnings per share, assuming the execution of cost savings. Further, the company projects a common equity tier 1 capital of 11.7% at closing and a 20% internal rate of return.

Similarly, Apollo Global Management Inc. APO agreed to acquire Bridge Investment Group Holdings Inc. as it seeks to expand its real estate offerings. An all-stock transaction has an equity value of $1.5 billion.

The transaction is expected to be immediately accretive to APO’s fee-related earnings upon closing, which is expected in the third quarter of 2025. Further, the deal will nearly double Apollo’s real-estate assets under management to more than $110 billion.

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This article originally published on Zacks Investment Research (zacks.com).

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