BlackRock has stepped up its risk management part of the company by acquiring “alternative” asset management industry for $1.3bn, clearly demonstrating its desire to become the lead provider of analytics for the global investment industry. BlackRock will buy eFront for 1.3bn$ from its private equity owner Bridgepoint.
eFront was acquired by Bridgepoint back in 2015 for $300M and the company has increased its offerings since then. eFront’s software can provide professional help to any type of investors and financial consumers, by analyzing their performance and fundraising along with communicating them the data collected from their portfolios.
This deal clearly shows that BlackRock, which specializes in overseeing assets in indexed products, is looking for broadening its perspectives to enhance its technology business. Most likely BlackRock will utilize eFront technologies paired with its own analytics platform Aladdin which overlooks, manages and offers solutions to other asset managers and institutional investors such as pension and sovereign wealth funds. However, people who are close to the deal have previously mentioned that eFront will continue to operate as normal for its current clients after the purchase.
It is not the first attempt of BlackRock to build up an alternative businesses. Last year, after the group has purchased Los Angeles-based private credit manager Tennenbaum Capital Partners LLC, they announced the plan to raise new funds for buying new stakes in companies. (Bloomberg)
“Technology and illiquid alternatives are two pillars of BlackRock’s growth, and this transaction provides a unique opportunity to accelerate our positioning in both,” Laurence Fink, chairman of BlackRock, said in the statement. “We’re particularly excited about eFront’s global footprint, including its headquarters in Paris, which is a key market on the continent for BlackRock.”- Bloomberg
It should also be mentioned that even though the technology part of the company is dwarfed by its asset management side, business is growing at an exceptionally high pace. The firm’s Solutions division increased its revenues by 20 per cent to $785m last year.
Aladdin, which overlooks Asset Liability and Debt and Derivatives Investment Network, is utilized primarily by investors in stocks and bonds. As mentioned by Rob Goldstein, BlackRock’s chief operating officer “eFront vastly expands Aladdin’s alternatives capabilities and further distinguishes it as the most comprehensive investment operating platform in the world”
According to a study by Morgan Stanley and Oliver Wyman, it is estimated that Alternative Investment will make up 40% of all revenues by 2023.This may stand as a solid explanation for BlackRock’s interest in eFront. “Broader adoption of private markets within investor portfolios is spurring alternatives growth,” as mentioned by the report. “We view building capabilities in alternatives as critical for any asset manager seeking to grow revenues.”
Vladimer Chogoshvili
eFront was acquired by Bridgepoint back in 2015 for $300M and the company has increased its offerings since then. eFront’s software can provide professional help to any type of investors and financial consumers, by analyzing their performance and fundraising along with communicating them the data collected from their portfolios.
This deal clearly shows that BlackRock, which specializes in overseeing assets in indexed products, is looking for broadening its perspectives to enhance its technology business. Most likely BlackRock will utilize eFront technologies paired with its own analytics platform Aladdin which overlooks, manages and offers solutions to other asset managers and institutional investors such as pension and sovereign wealth funds. However, people who are close to the deal have previously mentioned that eFront will continue to operate as normal for its current clients after the purchase.
It is not the first attempt of BlackRock to build up an alternative businesses. Last year, after the group has purchased Los Angeles-based private credit manager Tennenbaum Capital Partners LLC, they announced the plan to raise new funds for buying new stakes in companies. (Bloomberg)
“Technology and illiquid alternatives are two pillars of BlackRock’s growth, and this transaction provides a unique opportunity to accelerate our positioning in both,” Laurence Fink, chairman of BlackRock, said in the statement. “We’re particularly excited about eFront’s global footprint, including its headquarters in Paris, which is a key market on the continent for BlackRock.”- Bloomberg
It should also be mentioned that even though the technology part of the company is dwarfed by its asset management side, business is growing at an exceptionally high pace. The firm’s Solutions division increased its revenues by 20 per cent to $785m last year.
Aladdin, which overlooks Asset Liability and Debt and Derivatives Investment Network, is utilized primarily by investors in stocks and bonds. As mentioned by Rob Goldstein, BlackRock’s chief operating officer “eFront vastly expands Aladdin’s alternatives capabilities and further distinguishes it as the most comprehensive investment operating platform in the world”
According to a study by Morgan Stanley and Oliver Wyman, it is estimated that Alternative Investment will make up 40% of all revenues by 2023.This may stand as a solid explanation for BlackRock’s interest in eFront. “Broader adoption of private markets within investor portfolios is spurring alternatives growth,” as mentioned by the report. “We view building capabilities in alternatives as critical for any asset manager seeking to grow revenues.”
Vladimer Chogoshvili