In 2002, Mark O’Hare filed a public information request with the Massachusetts Pension Reserves Investment Management Board seeking information on the performance of his private equity investments.
The state pension fund initially defended the British businessman’s move, claiming the data was a trade secret, but a civil servant sided with O’Hare and helped him overcome an early hurdle in his plan to build a business selling valuable information about the secretive buyout sector. .
The 65-year-old crystallized that bet on Monday with a £2.55bn cash deal to sell his company Preqin to asset management group BlackRock, catapulting him to one of Britain’s richest people.
“This is a fantastic result for a great entrepreneur,” said Anand Sanwal, co-founder of financial data provider CB Insights. “It’s an overnight success that’s been 22 years in the making.”
Preqin has grown to become a key data provider for thousands of customers across investment and advisory groups, giving them access to information on performance tracking, fundraising, deals and terms for asset classes including private equity and venture capital.
Its rise has mirrored the growth of private equity over the past two decades into a multitrillion-dollar market, as buyout firms like Blackstone and KKR have become behemoths that dominate deal-making and underpin institutional investors’ portfolios.
Financial data companies have become a prized asset as investors seek more and more information to make decisions. S&P Global bought data research company Visible Alpha this year, while the London Stock Exchange Group spent $27 billion to acquire data provider Refinitiv in 2019.
Other big-money deals in recent years include Reorg and Leveraged Commentary and Data, while London-based energy and commodities data provider Argus Media was valued at $4.6 billion including debt in a January deal in which its CEO took a majority share.
Growth has been particularly strong in the private equity understanding market, especially recently, when tepid activity in equity markets has led companies to stay in private hands longer.
“There is a lot of interest in private markets. . . and there aren’t that many data assets at scale,” said Hiten Patel, global director of financial infrastructure, technology and services at Oliver Wyman. “There is rare asset value in the space as a whole.”
Preqin has faced competition from the likes of CB Insights, as well as PitchBook, which research group Morningstar bought in 2016 in a deal that valued the company at $225 million.
BlackRock paid 13 times Preqin’s expected 2024 revenue of $240 million. When PitchBook was acquired, the deal valued the company at nearly seven times its most recent annual revenue, though it has since become Morningstar’s biggest contributor to growth, with revenue rising about 23 percent to $552 million last year.
Preqin users say it stands out for the depth of information it offers about private market fundraising and returns.
“You have to pay a strategic premium for quality assets,” Patel said. “Especially assets that have rare value.
The acquisition of Preqin by previously uninvested BlackRock will make O’Hare and his wife Linda billionaires based on their 80 percent ownership of the company through their investment vehicle Valhalla Ventures, which is domiciled in the UK for tax purposes. but owned by Jersey parent.
The rest is owned by several hundred of the company’s 1,500 employees, who will share in around £500m from the sale.
O’Hare, a casual pilot who survived a plane crash in his seven-seater plane in 1999, ran the business as a family business. When he stepped down as CEO in 2022, he handed over the management of the company to his son-in-law Christoph Knaack. Lindy O’Hare is still a director of Preqin.
Preqin’s lack of outside investors has allowed O’Hare, who declined to be interviewed, more flexibility in how he runs the business.
He and his wife took out a £2.3m loan from Preqin to help finance their £2.8m purchase of a farm in Suffolk in 2018. British corporate filings due last year indicate it is not yet fully repaid.
Valhalla Ventures is funding the nearby Thorington Theatre, which the O’Hares built in a World War II bomb crater with wood from their own chestnut trees.
Preqin was sold in a competitive auction held by bankers Goldman Sachs, with interest from S&P Global and Bloomberg, as its price beat initial estimates. It is chaired by Sir Bradley Fried, who was also the chairman of Goldman Sachs International until April.
New York-based BlackRock, the world’s largest asset manager, expects the Preqin deal to expand its reach into private markets, which are estimated to have nearly $40 trillion in assets by the end of the decade.
The $10.5tn money manager wants to create indexes and eventually offer private equity tracker funds and other alternatives, expanding the reach of its iShares beyond stocks and bonds.
“We believe we could index the private markets,” BlackRock CEO Larry Fink told analysts on Monday. “We envision indices and data to be important future drivers of the democratization of all alternatives, and this acquisition is an unlock.”
But the deal comes as private equity managers warn they face years of lower returns after a decade of easier profits.
O’Hare will become vice chairman of BlackRock, a role with external responsibility for clients and customers. He previously served as a BlackRock fund manager from 2011 to 2014, and since 2016, BlackRock has been Preqin’s data customer.
Before founding Preqin, O’Hare launched Citywatch, a stock information service for shareholders, in 1993, which he sold to Reuters five years later. This came along with an early stint as a manager at the Boston Consulting Group.
O’Hare noticed a growing industry that provides financial data. And it soon caught on, especially in Europe, with family offices and institutional investors putting money into private equity funds.
“Mark is a very well-liked person in the industry,” said one person familiar with the financial data market, adding that O’Hare saw himself as someone “who would be a partner in the industry and stand alongside him”.
Some industry executives questioned whether private fund managers would continue to work with Preqin because BlackRock manages nearly $250 billion of its own alternative funds. The Preqin acquisition comes after the asset manager boosted its private market offering with a $12.5 billion deal to buy investment group Global Infrastructure Partners.
But BlackRock COO Rob Goldstein told analysts that “we’re actually quite confident in the ability to really grow” Preqin’s reach because BlackRock’s technology arm already worked directly with many fund managers who trusted it to protect their data.
“This deal makes strategic sense,” Deutsche Bank analyst Brian Bedell wrote in a note to clients, adding that combining Preqin’s data with BlackRock’s existing risk management technology should expand the market for both.
More reporting by Euan Healy and Will Louch