Private Market Data Is So Hot Right Now

Blackrock buys Preqin for $3.2B and gives away all of their data for free (almost)

Happy post-holiday weekend! Seasonal reminder that you’re going to end up working on vacation no matter how witty your OOO auto-response email is. And that’s ok. Speaking of which - last week, BlackRock bought Preqin as they continue to build out their private market offerings and decided to give most of their data away for free. Some thoughts on both those moves and links to other Sandhill content below.

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I’ve talked about this a decent amount in the past, but the BlackRock purchase of Preqin feels like another point on the board for private markets getting better faster than public markets (or going public more specifically) becomes less of a shit show. The official line from BlackRock about the purchase was:

"In the long range ... we have a great platform in iShares to be able to take some of this data, use it, and create investable indices through ... things like exchange traded products.”

Is “in the long range” something people say? I don’t think so. Anyways:

With BlackRock AUM up over $10T (lol) they’re active across basically everything, but this points to the continued demand they see from the client side for Alternatives (which includes our niche of choice, Venture). Products like the investable indices and exchange traded products that they mention would be a big step up for privates as the space continues to mature. More specifically, these types of products make it easier for big money to move into the space without the operational lift of building a portfolio yourself.

More money in Private Markets via these products would continue to accelerate the trend of “Why would I go public if I can raise privately?” that I’ve touched on in the past.

The opposite side of this argument recently came up through investing legend Brad Gerstner - Founder of Altimeter Capital - who was interviewed on the also legendary Acquired Podcast. In the clip, when talking about this move of staying private longer, he says (longer quote, but worth it):

“I hope that we start to see a return of earlier IPOs. I think it’s great for retail investors. I think it’s great for companies; they need the discipline.

Having companies running around with billions of dollars on their balance sheet and decacorn valuations — and not the discipline of public markets — is not a great thing for the company, for the employees, for the founders… This idea that you can’t innovate in the public markets is nonsense…

The public market [is not only an] important source of capital, but it provides a source of discipline. Scarcity leads to ingenuity…”

GAHHHH - I want to agree with him because his track record is so impressive, but I just can’t. You should go public because it’s harder or because it’s good for retail investors is just not a compelling argument to me and I think we see that play out in the data (aka people don’t go public).

HOWEVER - I do think we’ll see some of the public market discipline he mentions start to push into private markets as more institutional investing practices enter the private market arena. The wild west of Tiger Global pump and dump growth rounds (what a time to be alive) seems to be behind us and more transparency (data products) will continue that trend.

So ultimately, I agree that more discipline (up infinity percent from zero) is positive in private markets. I just don’t think that going public is the only way that happens.

Speaking of transparency and data - recently made 90% of their private market data public. If you’re a Venture nerd, this is epic. I’m not getting paid to say this - I genuinely think it’s exciting and worth checking out. Live estimated price data built on actual trades, funding round details, cap-table info. Some of the deeper stuff like PPS and specific trade data is still paid, but it’s a big move for anyone trying to check in on names more generally.

End of rant! Thanks for reading :)

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