Investor Presentation
June 30, 2024
Acquisition of Preqin
Transforming BlackRock private markets, technology and data
BlackRock to acquire Preqin for £2.55B (approximately $3.2B) in cash
Increasing | Enables first end-to-end provider in the private markets, with BlackRock | |
access to private | delivering capabilities across investments, technology and data | |
markets | • Combination of Preqin with Aladdin and eFront positions us to integrate private markets investment | |
workflows with private markets data - across fundraising, deal sourcing, portfolio monitoring, accounting | ||
and performance | ||
• Industry-leading private markets data will serve a larger set of client needs across the whole portfolio | ||
Strategic | Expands BlackRock technology into fast-growing market data segment, | |
expansion to | tripling our desktop reach and moving into adjacent TAM1 | |
fast-growing | • Private markets data TAM predicted to reach $18B by 2030, growing at 12% per year2 | |
private markets | • Expands BlackRock's client base, bringing 4,000+ relationships with GPs, LPs and service providers3 | |
data segment | • Delivers high-quality benchmarks for asset allocation, performance monitoring and investment to foster | |
growth of private markets | ||
• Supports opportunities to create new products, including additional private markets data sets, analytics | ||
and indices | ||
Attractive | Accelerates annual contract value (ACV) and adds highly recurring revenue | |
long-term | • Preqin is expected to add ~$240M of revenue, and has grown ~20% in last three years4 | |
strategic value | • Expected to accelerate the growth and revenue contribution of our technology business, which is highly | |
and synergies | recurring revenue that is less sensitive to capital markets fluctuations | |
• Implied acquisition multiple of 13x 2024E P/Revenue reflects high-growth profile and is in-line with | ||
previous transactions of leading financial technology and data assets | ||
• Opportunity for meaningful revenue synergies, primarily from increased distribution via BlackRock's | ||
complementary networks and partnership channels5 | ||
• Value creation potential of identified synergies results in an estimated IRR of ~18%, well in excess of cost | ||
of capital, and modest as-adjusted EPS dilution in 2025, in line with eFront acquisition5 |
Note: For footnoted information, refer to slide 10.
3
Growth of alternatives sector expected to drive increasing demand for private markets data
Significant demand for alternatives projected
over the next decade…1
Alternatives AUM, $T | 14% | $39T |
CAGR | ||
10%
CAGR$25T
Against this growth backdrop, the private markets landscape has a clear need for more
and new types of data…
+ Rapidly growing, complex industry |
$12T
$16T
+ | Gap between public and private markets |
data availability and transparency |
2020 | 2023 | 2028E | 2030E |
…leading to substantial expected growth for private markets data spend2
Private markets data TAM, $B
$18B
$8B
$11B
$4B
20242030E
Total addressable market | Serviceable available market |
Note: For footnoted information, refer to slide 10.
- Demand for new types of data and analytics to enable decision-making
- No consistent standards for alternatives data reporting
- Opportunity to bridge gaps in the whole portfolio
4
BlackRock's vision for the evolution of private markets
Private markets can be difficult to access
and incorporate into portfolios at scale
No common data, standard calculations
or best-practice workflows
Limited transparency into fund performance, risk and portfolio company valuations
End-to-end investment and fundraising processes
are not scaled - fragmented technology and data
landscape creates disconnected workflows
Long investment periods with limited to no
interim options for liquidity
Private markets move closer to the center of portfolios for both institutional and wealth
Standard data with broad industry adoption, consistent calculation methodologies, and overall more standardized processes
Detailed investment data widely available, increasing valuation transparency, enabling advanced analytics and improving benchmarks
Technology and data connecting GPs, LPs
and service providers - making it easier to
invest, onboard investors and monitor / report
Broader set of private market investment products that provide options for liquidity and more scaled secondaries markets
5
Preqin overview
Preqin is a leading independent provider of private markets data1
Premier private markets data provider with ~$240M in annual recurring revenue expected in 20242
Comprehensive global coverage of 190,000 funds,
60,000 fund managers and 30,000 private markets
investors3
20%+ growth across all segments over last three years and a track record of scaling margins4
Long-standing and growing relationships across the
private markets landscape, with 4,000+ clients and
200,000+ desktops3
Highly recurring revenue base (99%) which is less linked to market movements3
Note: For footnoted information, refer to slide 10.
Highly diversified customer base
30% | 28% |
2023 | |
ARR5 | |
42% | |
LPs GPs | Service providers6 |
99% | 20%+ | 1B+ | ||||
recurring | revenue growth | alternatives | ||||
revenue3 | in last 3 years7 | datapoints3 | ||||
92% | of the top 100 alternatives managers8 | |||||
75% | of the top 100 alternatives investors8 | |||||
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Advancing BlackRock's private markets capabilities at the
intersection of data, technology and investments
Highly compelling growth levers
Further accelerates core strategy of Aladdin to offer the most comprehensive whole portfolio platform
Connecting Preqin and eFront to grow a best-in-classintegrated alternatives workflow and data process, while continuing to offer Preqin as a standalone product
Launching BlackRock into the fast-growing data market, with opportunity to innovate data products and deliver better client outcomes
Enabling AI across Preqin's offerings to support increased scale and further client use cases
Strong BlackRock track record of integrating and scaling acquisitions1
2x | ACV growth |
since acquisition | |
+23% | Organic asset growth |
since acquisition | |
Bringing investments, technology and data together for the whole portfolio
Private Markets
Multi-alternative | Unified investment and | End-to-end alternatives | Comprehensive private markets |
investment manager | risk management platform | investment management | data and research platform |
Note: For footnoted information, refer to slide 10.
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Opportunities for significant growth synergies
Leverage | Build a more | Integrate data | Indexing and | Harness the | ||||
combined reach | comprehensive | and workflow | efficient access | combined scale | ||||
to infuse data | fund and | into a unified | to private | of BlackRock | ||||
across the | deal-level | platform to | markets | and Preqin | ||||
industry | database and | better serve | ||||||
innovate new | clients | |||||||
products | ||||||||
Use BlackRock's scale
and relationships to distribute Preqin products through key partnership channels
Drive further data
collection and
redistribution through
combined,
complementary
networks
Bring together Preqin's
data and research
tools with eFront and Aladdin's workflow capabilities
Deliver high-quality
private markets
benchmarks and data for asset allocation, performance metrics and investing
Increased scale and
efficiency with
AI and automation, while safeguarding GP/LP data through information barriers
Note: For footnoted information, refer to slide 10.
8
Long-term value creation for BlackRock shareholders
Consideration1 | • | Total consideration of £2.55B (approximately $3.2B) in cash at closing | |
• | Transaction to be funded by up to $3B of incremental debt, and available cash | ||
• | Expect Debt/EBITDA ratio to increase to ~1.4x2 | ||
Indicative valuation
- Acquired business expected to add ~$240M of highly recurring revenue (99% recurring) that is not directly tied to capital markets fluctuations3
- Implied acquisition multiple of 13x 2024E P/Revenue reflects high-growth profile and is in-line with previous transactions of leading financial technology and data assets
- Preqin founder Mark O'Hare to join BlackRock as a vice chair after closing of transaction
Financial | • Expect to be modestly dilutive to as-adjusted earnings and operating margin in 2025, |
impact | excluding one-time transaction costs; in-line with eFront transaction4 |
• Value creation potential of identified synergies results in an estimated IRR of ~18%, well | |
in excess of cost of capital4 | |
Timing | • Expected to close before year-end 2024, subject to regulatory approvals and other |
customary closing conditions | |
Note: For footnoted information, refer to slide 10.
9
End notes
These notes refer to the financial metrics and/or defined term presented on:
Slide 3 - Transforming BlackRock private markets, technology and data: BlackRock to acquire Preqin for £2.55B, approximately $3.2B, in cash
- Source: Preqin and BlackRock; desktops based on number of users. Data as of December 31, 2023.
- Source: Preqin and BlackRock estimates.
- Source: Preqin. Clients as of December 31, 2023.
- Source: Preqin. Revenue based on 2024 forecast. Growth measured as ACV (Annual Contract Value) CAGR from 2021 - 2023.
- Source: BlackRock forecasts. Synergies, accretion / dilution analysis and IRR shown for illustrative purposes only. Earnings per share and operating margin metrics shown on an as-adjusted basis and exclude certain transaction-related costs. Forward-lookingnon-GAAP measures are estimated consistent with the relevant definitions and assumptions. Actual results could differ materially from those anticipated in statements and future results could differ materially from historical performance.
Slide 4 - Growth of alternatives sector expected to drive increasing demand for private markets data
- Source: Preqin Future of Alternatives 2028 report, Preqin estimates.
- Source: Preqin and BlackRock estimates.
Slide 6 - Preqin overview
- Based on 2023 revenue, or best available estimated revenue for privately held competitors.
- Source: Preqin. Revenue based on 2024 forecast.
- Source: Preqin. Data as of December 31, 2023.
- Growth measured as ACV (Annual Contract Value) CAGR from 2021 - 2023.
- ARR defined as annual recurring revenue as of 2023.
- Service providers include consultants and advisors (e.g. legal, financial).
- Source: Preqin. Growth measured as revenue CAGR from 2021 - 2023.
- Source: Preqin. Top 100 alternatives managers based on total alternatives capital raised. Top 100 alternatives investors based on alternatives allocations.
Slide 7 - Advancing BlackRock's private markets capabilities at the intersection of data, technology and investments
1. Source: BlackRock. eFront ACV growth from April 30, 2019 - May 30, 2024, and Aperio organic asset growth from February 1, 2021 - March 31, 2024.
Slide 9 - Long-term value creation for BlackRock shareholders
- Shown for illustrative purposes only.
- Excluding lease liabilities and other customary rating agency adjustments. Shown for illustrative purposes only. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. Debt/EBITDA ratio represents pro forma estimates. Includes BlackRock debt as of March 31, 2024, and $3B of incremental debt associated with the Preqin transaction. EBITDA represents 2024 estimates for BlackRock, GIP and Preqin. We have not provided a reconciliation of EBITDA and the ratio of debt to EBITDA because the information needed to reconcile these measures is unavailable due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred. Additionally, estimating such GAAP measures and providing a meaningful reconciliation consistent with the BlackRock's accounting policies for future periods requires a level of precision that is unavailable for these future periods and cannot be accomplished without unreasonable effort. Forward-lookingnon-GAAP measures are estimated consistent with the relevant definitions and assumptions.
- Source: Preqin forecasts. Revenue based on 2024 forecast. Gross retention rates based on fiscal year 2023.
- Source: BlackRock and Preqin forecasts. Synergies, accretion / dilution analysis and IRR shown for illustrative purposes only. Metrics shown on an as-adjusted basis and exclude certain transaction-related costs. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
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BlackRock Inc. published this content on 01 July 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 July 2024 14:07:04 UTC.