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BFD Expert Voices - Private Credit

BFD Expert Voices

🗓️ Welcome to H2! We are officially halfway through 2024.

🏛️ Situational awareness: The Treasury Department adopted a final rule Friday requiring crypto platforms to report information about their users' transactions to the IRS.

BlackRock agreed to acquire Preqin, a London provider of alternative asset data, for £2.55 billion in cash.

Why it matters: The amount is more than double what Preqin was expected to fetch, reflecting a voracious appetite for information on private markets — an industry that's both ubiquitous and opaque.

Context: Private markets are the fastest-growing segment of asset management, and alternative assets are expected to reach nearly $40 trillion by the end of the decade, according to BlackRock's press release.

The asset manager said private markets data is estimated to be a $8 billion total addressable market today, and it is expected to grow 12% per year and reach $18 billion by 2030.

Between the lines: The deal moves BlackRock beyond data analytics into data provision, with coverage of 190,000 funds, 60,000 fund managers and 30,000 private market investors.

Preqin has over 200,000 asset managers, insurers, pensions, wealth managers and banks as customers and is expected to generate ~$240 million of recurring revenue.

Flashback: In January, BlackRock announced a $12.5 billion deal for Global Infrastructure Partners, extending its offerings further into private markets investing.

Zoom in: Barclays served as BlackRock's lead financial adviser, with Skadden, Arps, Slate, Meagher & Flom acting as legal counsel.

Goldman Sachs International served as Preqin's sole financial adviser, and Macfarlanes acted as legal counsel.

The deal is expected to close by the end of the year.

BlackRock to pay £2.55B for Preqin

Illustration of an open safe revealing a spreadsheet of data. 

VanEck filed the first application to launch a spot solana fund in the U.S. last week, right before the anticipated trading debuts of ether funds this week.

Why it's the BFD: This would test whether the SEC would approve a product for a token with no regulated futures market.

Between the lines: The SEC kept bitcoin out of ETFs for several years, arguing that there wasn't a futures market of "significant size" related to the spot market — a key factor, it said, in mitigating the potential for fraud and manipulation.

Folks wondered if that would be an argument the agency used to deny ether ETFs before they were green-lighted.

Unlike bitcoin and ether, however, solana's native token, SOL, doesn't have a regulated futures market at all, and that's widely known in the investment community (or should be). 

That might be why folks in TradFi and in crypto who might be bullish on SOL, in general, aren't bullish on an ETF.

That didn't stop speculators from bidding up the token Thursday, though prices have come down a bit since.

Zoom out: The "will they or won't they" question on a solana ETF becomes almost moot, however, when you consider the diminishing financial- and attention-based returns expected on any crypto ETF launch after bitcoin as they slide down the market-cap ladder.

Galaxy Research's Charles Yu expects demand for ether ETFs to take 33% of bitcoin ETF's overall flows through June 15.

That implies $1 billion in monthly inflows for the first five months.

Bitcoin's market cap is $1.2 trillion. Ether's is $410 billion, while solana is six times smaller, at $66 billion.

What we're watching: Solana's native token has also been labeled as a security in the SEC's cases against Binance, Coinbase and Kraken, which remain open. (Though that hasn't stopped ether from getting an ETF.)

The other side: For VanEck, its filing puts it in pole position for a launch if a solana ETF were approved. In the meantime, it puts the spotlight on the firm … before the trading launch of its own ether ETF.

🤩 Smart timing, as it will compete with seven other issuers over a much smaller pool of potential assets than bitcoin.

 The BFD: Spot ETF boosts solana 

🍎 Apple Pay Later's shutdown partly driven by regulation (Bloomberg)

The iPhone maker didn't want to deal with increased scrutiny of buy now, pay later services from the Consumer Financial Protection Bureau and was happy to hand off the service to third parties instead, Mark Gurman reports.

🤖 Financial services shun AI over job and regulatory fears (FT)

McKinsey estimates that AI could add up to $340 billion in value annually to the global banking sector, equivalent to around 4.7% of total industry revenue. But a Capgemini study found that only 6% of retail banks are prepared to implement AI at scale across their businesses.

🏦 Plaid boosts its enterprise business (TechCrunch)

The company added hundreds of enterprise customers over the last year, increasing its enterprise customer base to over 1,000. The company's total customer count is 8,000.

Credit score

Illustration of a referee's hand holding a whistle and a red card that says "credit score."

Go deeper into our full database with the Axios Pro Deals Tracker.

• Hebbia, a New York-based document search AI startup, raised nearly $100m in a Series B led by a16z, per TechCrunch. axios.link/3VGF2s0

• MegaLabs, an Ethereum scaling protocol developer, raised $20m in seed funding led by Dragonfly Capital. Figment Capital, Folius Ventures, Robot Ventures, Big Brain Holding, Tangent and Credibly Neutral participated. axios.link/3xIDMwn

• Clearstory, a Walnut Creek, Calif., change order management platform for construction, raised $16m in a Series B. Prudence led and was joined by Industry Ventures, Jackson Square Ventures, Building Ventures, GS Futures, and Cloud Apps Capital Partners. clearstory.build

• Feather, a German startup that helps foreign workers get health insurance, raised €6m. Keen Venture Partners led and was joined by Plural. axios.link/4eJASZ6

• SmartHR, a Tokyo-based HR management company, raised JPY 21.1b in Series E fundraising led by KKR and Teachers' Venture Growth. smarthr.jp

• GrowthCurve Capital bought Duetto, an SF provider of revenue management software for the hospitality market, from Warburg Pincus. axios.link/3W0XIEc

• Vista Equity Partners completed its $1.25b take-private buyout of Model N, a San Mateo, Calif., provider of revenue optimization and compliance solutions for pharma and med tech. axios.link/49xGVfg

• ANZ Group (ASX: ANZ) received Australian government approval for its A$4.9b purchase of insurer Suncorp Group (ASX: SUN), which had initially been blocked by antitrust regulators. axios.link/45M2MiI

• CleanSpark, a crypto mining firm, agreed to purchase Bitcoin miner GRIID Infrastructure in a deal valued at $155m. axios.link/3RPQgcr

• Hg is considering liquidity options for Septeo, a French legal software provider that could be valued at €4b, per Bloomberg. axios.link/3L2kAgg

• iA (TSX: IAG) completed its $170m purchase of Vericity, a Chicago-based life insurer majority owned by J.C. Flowers & Co. vericity.com

• Robinhood Markets acquired Pluto Capital, an AI-powered investment research platform that's raised $4m from investors including Caffeinated Capital and Switch Ventures. https://axios.link/45KgN0x

Deals!

• Gareth Jones, former chief risk officer at the Co-operative Bank, joined Atom Bank in the same role. axios.link/3W45psZ

• Jennifer Geoghegan (ex-Focus Financial Partners) and Tony Ling (Corsair Capital) joined Rise Growth Partners as CMO and managing partner of investments, respectively. risegrowth.com

• Point72 Ventures, billionaire Steve Cohen's VC arm, laid off five investors focused on crypto and fintech, per Forbes. Partners Tripp Shriner and Sugam Sarin are also likely to leave. axios.link/3L4bz66

• Vancity, a Canadian credit union, laid off 7% of its workforce (around 200 workers) as part of an organizational restructuring. axios.link/3L7TUe0

Andrew Hocking, chief strategy officer of Tribe Payments, was promoted to CEO. axios.link/3VPiAgk

It's Personnel

🏠 @Ryan took a one-way trip from San Francisco to Philadelphia five years ago today, and hasn't looked back.

🥐 @Lucinda had great pastries at Unregular Bakery this weekend.

Thanks to George Moriarty and Brad Bonhall for today's edits.

And thanks to you for reading this edition of Fintech Deals. Please tell your fintech friends and fraud preventers about this newsletter. They can sign up here.

July 01, 2024

1 big thing: BlackRock to pay £2.55B for Preqin