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CNBC
6 days ago
- Business
- CNBC
Why BlackRock's smallest deal of 2024 may end up being its most consequential
BlackRock CEO Larry Fink has sent a clear message to investors: The world's largest asset manager's smallest acquisition last year could end up its most consequential. During an industry conference in March, the long-time executive said BlackRock's $3.2 billion purchase of alternatives asset data provider Preqin — its smallest of the four deals announced in 2024 — is "probably the most significant thing we have done in terms of expanding the profile of private markets." It could be a big deal for investors, too. For starters, Preqin can bring what BlackRock currently does best — offer investors index products like exchange-traded funds (ETF) for public markets — to the opaque world of private markets. That would add revenue and earnings diversification that's less tied to the daily fluctuations of the stock and bond markets, BlackRock CFO Martin Small said when announcing the deal in July 2024. "Through strong organic growth and scaling of our private markets and investment technology platforms, both of which fuel stable earnings growth," Small added. "We believe we can drive multiple expansion for our shareholders." BLK YTD mountain BlackRock (BLK) year-to-date performance The acquisition, which closed on March 3 , integrates Preqin's private markets data into BlackRock platforms such as its portfolio management system Aladdin and investment software eFront. This gives BlackRock clients – mostly institutional investors who pay for access to these platforms – more visibility into non-public investment areas like infrastructure, private equity, private credit, and more. They will get valuation and performance data on more than 190,000 funds and 60,000 managers, according to BlackRock. "Preqin effectively does for private markets what Zillow did for housing," CEO Fink said in his 2025 annual chairman letter . "If you're buying a home, you want to know if you're paying a fair price, and there are ways to do that. You can check neighborhood benchmarks, recent sales, or historical appreciation trends; companies like Zillow have made this simple. But today, investing in private markets feels a bit like buying a house in an unfamiliar neighborhood before Zillow existed, where finding accurate prices was difficult or impossible." "This lack of transparency discourages investment," he added. The new venture could take some of the pressure off BlackRock's index business, which manages trillions of dollars and makes up a significant portion of its overall revenues. Although the firm has profited immensely as a traditional asset manager and has become an industry leader for ETFs, the division's revenue streams are still at the mercy of the stock market's volatility. BlackRock also has to pay fees to third-party providers like S & P Global and MSCI to use their underlying data in BlackRock funds. The longer-term goal is for BlackRock to create its own private-market benchmarks and sell more accessible private index products. Fink has also said private market investments could play a role within retirement accounts like IRAs, touting them as offering higher returns. "Not that we're making a pivot, we just see the blending of public and private markets coming together and [it's] probably happening faster than I ever envisioned," Fink said at RBC Global Financial Institutions Conference in March. There are signs that the Preqin deal is already starting to pay off. Preqin added roughly $20 million to first-quarter revenue — even though it was owned for less than a third of the period — and contributed to the firm's 30% year-over-year increase in annual contract values, or ACV, Small said during the company's April earnings call. The CFO said this new "growth reflects sustained demand" from Preqin and that the trend shouldn't die down anytime time. "We remain committed to low to mid-teens ACV growth over the long term," he said. ACV is a financial metric that represents the average annual revenue from a customer contract. Offering retail investors access to private market investments doesn't come without risk. Moody's has warned that selling funds to retail investors could result in "reputation loss, heightened regulatory scrutiny and higher costs" for asset managers, the Wall Street Journal reported Tuesday. "If growth outpaces the industry's ability to manage such complexities, such challenges could have systemic consequences," Moody's analysts wrote. However, in his annual chairman letter, Fink wrote that "private markets don't have to be as risky. Or opaque. Or out of reach." He added: "Not if the investment industry is willing to innovate—and that's exactly what we've spent the past year doing at BlackRock." There's more to like about the Preqin acquisition. The deal should attract more clients and deepen its existing relationships. The competition for private markets data providers is limited, and Preqin has one of the most comprehensive data sets available. That could result in more valuable contracts with its existing clients and an increase in sales. We see this in the impact of similar acquisitions on BlackRock's financials. Since BlackRock's eFront acquisition in 2019, for example, BlackRock has doubled the annual contract value of the business. As these BlackRock platforms get bigger and integrate more data, they should retain customers and lure new ones in from rival asset managers. "In our thesis about demand for a whole portfolio view combining Aladdin and eFront capabilities, it's driven new sales for both Aladdin and eFront," Small said last July. "We'll look to repeat this success with Preqin and have a business plan that we believe can generate significant synergies resulting in an 18% [internal rate of return]." Better client relationships also means Preqin can create a flywheel effect within BlackRock. Clients who use Preqin could be more inclined to tap BlackRock for its other services as well. "Preqin just makes [these platforms] better and crowds out competition and drives growth in all [BlackRock's] businesses," Evercore analyst Glenn Schorr told CNBC recently. "What's probably even more appealing to this amazing asset manager is the insights [Preqin] can bring on where and how it can grow in the future as an asset manager, and then the value that [the deal] can bring to their large LPs that they manage money for," Schorr said. "I think that's the mindset that Larry probably had when he was talking about how important of a business this could be for them." And lastly, BlackRock's Preqin buy further expands the firm into the fast-growing world of private markets, which have grown enormously over the past several years as investors look for alternatives. It follows the firm's other recent moves in the space. BlackRock closed a $12.5 billion deal for infrastructure investment firm Global Infrastructure Partners in October. The firm is also expected to complete its purchase of private credit manager HPS Investment Partners for $12 billion as well in 2025. "There are few people that would disagree that private markets are a continued very large growth opportunity for any good asset manager, any good wealth management firm [or] any good bank as well," Schorr said. (Jim Cramer's Charitable Trust is long BLK. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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Yahoo
26-05-2025
- Business
- Yahoo
BlackRock vs. Blackstone: Which Asset Management Giant Has the Edge?
BlackRock BLK and Blackstone BX are leading U.S.-based asset management firms. While BLK focuses on public market investments and exchange-traded funds (ETFs), BX specializes in alternative assets like private equity and real estate. The asset management industry is currently benefiting from investors' shift toward higher-yielding investment vehicles like equity funds, alternative assets and long-term bond funds. Also, deregulation is expected to open up access to cryptocurrencies and the previously untapped retirement market. Further, the growing adoption of tokenized assets – the tokenization of traditional assets, such as real estate and equities, is attracting investor interest. Together, these trends are expected to drive continued growth in assets under management (AUM). In this evolving landscape, BLK and BX seem to be well-positioned to capitalize on these the question arises: which asset manager, BlackRock or Blackstone, deserves a place in your portfolio? Let's examine their fundamentals, financial performance and growth prospects to determine which stock presents a more compelling opportunity right now. BlackRock, one of the world's largest asset managers (total AUM of $11.58 trillion as of March 31, 2025), has been expanding its footprint in domestic and global markets through acquisitions. Since 2024, the company has acquired the remaining 75% stake in SpiderRock Advisors, Global Infrastructure Partners (GIP) and London-based Preqin. Additionally, in December 2024, it announced a deal to acquire HPS Investment, which has almost $148 billion in AUM. These deals represent a strategic expansion of BlackRock's Aladdin technology business into the rapidly growing private markets data BlackRock has been focusing on diversifying its product suite and revenue mix, which, along with strategic acquisitions, has been contributing to its AUM's growth over the years. AUM witnessed a five-year (2019-2024) compound annual growth rate (CAGR) of 9.2%, with the uptrend persisting in the first quarter of 2025 amid macroeconomic headwinds. The momentum will likely continue as efforts to strengthen iShares unit (offering more than 1,400 ETFs globally) and ETF operations (it received approval for spot Bitcoin and ether ETFs), and increased focus on the active equity business are expected to offer efforts are likely to bolster BLK's revenue mix, reduce top-line concentration risk and allow it to serve a broader range of clients, aiding AUM growth. The company's GAAP revenues witnessed a CAGR of 7% over the last five years ended 2024, with momentum persisting in the first quarter of 2025. Moreover, the combination of HPS Investment, Preqin and GIP data with the company's alternative asset management platform, eFront, will drive solid revenue growth. Image Source: Zacks Investment Research However, the uncertainties surrounding the impact of tariff policies and geopolitical risks are likely to weigh on BlackRock's revenues to some extent. Blackstone, one of the world's largest alternative asset managers (total AUM of $1.17 trillion as of March 31, 2025), has been successfully raising money despite several near-term headwinds. Fundraising for the global private equity and real estate funds resulted in the company's 'dry powder' or the available capital of $177.2 billion as of March 31, 2025. With substantial investable capital, Blackstone is well-positioned to take advantage of market dislocations. The company maintains a strong long-term conviction in key sectors such as digital infrastructure, energy and power, life sciences, alternatives and the recovery in commercial real estate. Additionally, accelerating growth in India and Japan offers attractive opportunities, supporting a strategic deployment of in April, Wellington, Vanguard and Blackstone announced the formation of an alliance to develop simplified multi-asset investment solutions combining public and private markets. Aiming to broaden investor access to institutional-quality portfolios, the collaboration leverages each firm's strengths to address long-term diversification and return challenges in wealth and asset tighter credit markets, higher-for-longer interest rates, slower deal activity in private equity and real estate, reduced realizations adversely impacting performance fees and concerns about exit opportunities are expected to hamper Blackstone's near-term prospects. Additionally, the biggest factor influencing its financials will likely be the ongoing uncertain operating backdrop because of the Donald Trump administration's trade believes that deal activities are expected to remain muted for the time being as the tariff plans have led to heightened ambiguity. This has also resulted in caution in the IPO market. Hence, it will not be easy for Blackstone to record growth in transaction advisory revenues and net realized performance income in the near term. Image Source: Zacks Investment Research The Zacks Consensus Estimate for BLK's 2025 and 2026 earnings indicates a 2.9% and 12.5% growth for 2025 and 2026, respectively. Over the past week, earnings estimates for 2025 and 2026 have been revised upward. This indicates analysts' bullish sentiments. Image Source: Zacks Investment Research Likewise, analysts are optimistic about BX's prospects. The consensus mark for 2025 and 2026 earnings suggests a 3% and 33.2% increase. Also, over the past seven days, earnings estimates for both years have been revised north. Image Source: Zacks Investment Research While 2025 started on a positive note, the operating backdrop gradually turned pessimistic as the year progressed because of Trump's trade policy ambiguity and its adverse impact on the economy and the Federal Reserve's monetary policy. As such, this year, shares of BlackRock and Blackstone have declined. Image Source: Zacks Investment Research Valuation-wise, BLK is currently trading at a price-to-book (P/B) of 3.10X, higher than its five-year median of 2.97X. The BX stock, on the other hand, is currently trading at a P/B of 5.37X, which is higher than its five-year median of 3.85X. Image Source: Zacks Investment Research Therefore, BlackRock is inexpensive compared to BX's return on equity (ROE) of 19.84% is above BLK's 15.57%. So, Blackstone uses shareholder funds more efficiently to generate profits than BlackRock. Image Source: Zacks Investment Research BlackRock appears to be the stronger pick for 2025 given its diversified growth strategy, robust AUM expansion and momentum in ETF and private market offerings. Strategic buyouts like GIP, Preqin and HPS Investment will enhance its data and alternatives platform, while the exposure to spot crypto ETFs and strong iShares presence position it well to capture evolving investor demand. Its consistent revenue and earnings growth also suggest resilience in uncertain macro while still a formidable player in alternatives, faces near-term headwinds from tighter credit conditions, muted deal activity and geopolitical uncertainties. Despite strong fundraising and sizable investable capital, deployment challenges may delay monetization. While its ROE outpaces BLK's, BlackRock's broader product suite and valuation advantage make it a more compelling buy for present, BLK carries a Zacks Rank #3 (Hold), while BX has a Zacks Rank #4 (Sell).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Blackstone Inc. (BX) : Free Stock Analysis Report BlackRock (BLK) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Business Wire
21-05-2025
- Business
- Business Wire
Passthrough and BlackRock's Aladdin® Collaborate to Enhance Investor Experience on the eFront Platform
NEW YORK--(BUSINESS WIRE)--Passthrough, a leader in fund workflow automation, and Aladdin ®, BlackRock's technology business, today announced a partnership that integrates Passthrough's digital subscription technology within the eFront platform to offer a unified investor experience. The collaboration enables common clients – from general partners to asset servicers – to digitize their investor onboarding process and deliver scalable investor relations solutions for their clients. 'BlackRock continues to set new standards for how institutional investors participate in the private markets ecosystem at large,' said Tim Flannery, Co-founder and CEO of Passthrough. 'With this integration, together, we're removing friction from the moment investors log in - giving them one clear, intuitive path from interest to investment.' Now live, the integration enables eFront users to streamline and automate onboarding and fund closings for their investors. Using Passthrough's technology, it's now easier to distribute and execute subscription documents electronically, accelerating subscription workflow and reporting. Over time, the two companies will collaborate further to embed Passthrough's full onboarding flow – including subscription agreements, tax forms, and AML requests – within eFront's investor experience. "This is an additional proof point in our journey to make private markets more accessible and transparent through data and technology. Our collaboration with Passthrough enhances our private markets technology capabilities for the benefit of our common eFront clients - including BlackRock - by optimizing the investor experience through the investment lifecycle,' said Kamya Somasundaram, Managing Director, Global Head of Aladdin Partnerships. Through this partnership, BlackRock will also leverage Passthrough's technology to streamline onboarding for clients in its private markets business. About Passthrough Passthrough automates investor onboarding and compliance workflows for private funds. From subscription documents and tax forms to AML and KYC processes, Passthrough eliminates friction for both investors and fund managers. The platform connects directly to CRMs, investor portals, and fund admin systems to provide a seamless, API-first experience across the investor lifecycle. Learn more at
Yahoo
04-03-2025
- Business
- Yahoo
BlackRock Acquires Preqin, Boosts Private Markets Offerings
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. 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 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 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 O'Hare, founder of Preqin, has joined the BlackRock board as a vice chair upon the completion of the 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.' 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 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 acquisition significantly enhances BlackRock's investment technology capabilities, marking a strategic expansion into the rapidly growing private markets data 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. 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. 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% 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 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 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. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BlackRock (BLK) : Free Stock Analysis Report Apollo Global Management Inc. (APO) : Free Stock Analysis Report Old Second Bancorp, Inc. (OSBC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Associated Press
03-03-2025
- Business
- Associated Press
BlackRock Establishes Preeminent Private Markets, Technology, and Data Provider with Close of Preqin Acquisition
BlackRock Inc. (NYSE:BLK) today announced the successful completion of its acquisition of Preqin, a premier independent provider of private markets data. This strategic transaction strengthens BlackRock's ability to serve clients' whole portfolios — across public and private markets — by combining investment, technology, and data solutions in one platform. Private markets are the fastest-growing segment of global investing, with alternative assets projected to reach $30 trillion by the end of the decade, according to Preqin data. As capital markets evolve, private markets are playing an increasingly important role in financing global growth. Institutional and wealth investors continue to increase allocations to these markets as they seek to optimize returns and diversify their long-term capital, yet these allocations have been artificially limited by a lack of transparency. With Preqin, BlackRock takes a major step forward to address this need, positioning its private markets platform to deliver investments, technology, and data holistically to power next-generation investment solutions for clients. Rob Goldstein, BlackRock's Chief Operating Officer, said, 'BlackRock is a perpetual reinvention machine, evolving continuously to stay ahead of our clients' rapidly changing needs. 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.' Mark O'Hare, Founder of Preqin, said, 'For decades, investors in private markets have lacked the robust data they need to make fully informed decisions and incorporate private assets into their portfolios at scale. By marrying Preqin with BlackRock's technology offering, we are even better placed to tackle this challenge and help clients build more diverse, resilient portfolios by delivering the transparency and insights they seek.' Preqin, a part of BlackRock From the outset, Preqin will extend BlackRock's suite of technology offerings, with clients continuing to use Preqin with the same level of expert service. Preqin will remain available as a standalone solution, while joint customers will benefit immediately from product integrations, such as access to Preqin benchmarks within Aladdin. Over time, BlackRock will integrate Preqin's proprietary data and research tools with Aladdin and eFront. This unification of data, research, and investment processes will transform private markets investing across fundraising, deal sourcing, portfolio management, accounting, and performance reporting. Sudhir Nair, Global Head of Aladdin, commented, '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.' The acquisition significantly enhances BlackRock's investment technology capabilities, marking a strategic expansion into the rapidly growing private markets data segment, which is expected to grow to an $18 billion total addressable market by 2030. With a history spanning over 20 years, Preqin is an industry-recognised independent data solutions provider in private markets, empowering investors to make informed decisions by providing data and insights that enhance transparency and access across the global alternatives market. Its platform covers 210,000 funds and has over 220,000 users, including asset managers, insurers, pensions, wealth managers, banks, and other service providers. Following the transaction, Preqin founder Mark O'Hare has joined BlackRock as a Vice Chair. Barclays served as lead financial advisor to BlackRock, with Skadden, Arps, Slate, Meagher & Flom acting as legal counsel. About BlackRock BlackRock's purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit About Preqin, a part of BlackRock Preqin empowers financial professionals who invest in or allocate to private markets with essential data and insight to make confident decisions. It supports them throughout the entire investment lifecycle with critical information and leading analytics solutions. Preqin has pioneered rigorous methods of collecting private data for over 20 years, enabling more than 200,000 professionals globally to streamline how they raise capital, source deals and investments, understand performance, and stay informed. Acquired by BlackRock in 2025, Preqin complements the existing Aladdin technology platform to provide investment solutions for the whole portfolio. For more information visit SOURCE: BlackRock Copyright Business Wire 2025. PUB: 03/03/2025 06:52 AM/DISC: 03/03/2025 06:51 AM
