BlackRock to Buy eFront for $1.3B
eFront, which serves more than 700 clients in 48 countries, manages the alternatives investment lifecycle.
NEW YORK and PARIS—BlackRock has made a binding offer to acquire 100% of the equity interests in eFront, an alternative investment management software provider, from private equity firm Bridgepoint and eFront employees, for $1.3 billion in cash. BlackRock intends to combine eFront with its own investment operating system, Aladdin, to create a new investment and risk management platform.
eFront, which serves more than 700 clients in 48 countries, manages the alternatives investment lifecycle, from due diligence and portfolio planning to performance and risk analysis, across a range of alternative asset classes.
Aladdin, for its part, combines risk analytics, exposure and performance analyses with portfolio management, trading, compliance and operational tools on one platform. Aladdin was first built to manage BlackRock’s business, and the firm continues to be the largest user of Aladdin today.
BlackRock Pushes Into Alternative Space
The acquisition represents a strong push into the alternative asset management category by BlackRock. “Technology and illiquid alternatives are two pillars of BlackRock’s growth, and this transaction provides a unique opportunity to accelerate our positioning in both,” said Laurence D. Fink, Chairman and CEO of BlackRock, in a prepared statement. Rob Goldstein, COO of BlackRock, echoed this sentiment, noting that the transaction enhances BlackRock’s own alternatives investment platform “and advances the company’s goal of using technology to strengthen its leadership position in the illiquid investment space.”
A Single Platform for Public, Private Assets
This emphasis on alternatives is key as investment managers increasingly seek to manage portfolios across public and private asset classes on a single platform.
“There are $9 trillion in alternative assets under management in the industry today and clients are incorporating them into their investment strategies at a record pace,” Goldstein said. “This has created an unprecedented need for risk and investment management capabilities spanning both public and private asset classes.”
The eFront transaction will be funded with a combination of existing corporate liquidity and debt.