Blackrock has announced a binding offer for 100 % of the equity interests in eFront for $1.3 billion in cash. Following completion of the notification and consultation process, the parties are expected to enter into a definitive securities sale agreement.
eFront is “the world’s leading end-to-end alternative investment management software and solutions provider” with more than 700 clients in 48 countries. The technology is able to manage the lifecycle of alternative investments, across a range of alternative asset classes. The lifecycle spanned includes due diligence and portfolio planning to performance and risk analysis.
Aladdin is Blackrock’s own investment operating platform that is used by 225 institutions around the world and the acquisition of eFront enables the massive expansion of Aladdin’s alternative capabilities and strengthens the platform as “the most comprehensive investment platform in the world”, said Rob Goldstein, the Chief Operating Officer of Blackrock.
The benefits of eFront also cements Blackrock’s goal of “using technology to strengthen its leadership position in the illiquid investment space and providing whole portfolio solutions to clients”, a strategic move due to the $9 trillion in alternative assets under management and how “clients are incorporating them into their investment strategies at a record pace,” said Goldstein. The size of these positions means that eFront is perfectly positioned to take advantage of the “unprecedented need for risk and investment management capabilities spanning both public and private asset classes.”
The acquisition comes in the wake of Blackrock’s recent repurchasing of approximately $1.6 billion of its shares in 2019. The shares were repurchased at a per share price of $412.82 of 3.1 million shares. Many other U.S.A based companies have also been repurchasing large volumes of their shares in great part to the corporate tax cuts under President Trump.
Aladdin, considered the “core” of BlackRock, combines sophisticated risk analytics, exposure and performance analyses with comprehensive portfolio management, trading, compliance and operational tools on a single unified platform. Aladdin was first built to manage BlackRock’s business, and the firm continues to be the largest user of Aladdin today. Through Aladdin, the firm offers to clients the same technology and intellectual capital that BlackRock uses to manage investments day-to-day. This “provider/user” dynamic brings a higher level of discipline to Aladdin than typical third-party technology offerings.
eFront, founded in 1999 by Olivier Dellenbach, is based in Paris and is the leading technology provider for managing the alternatives investment lifecycle, from due diligence and portfolio planning, to performance and risk analysis, across a range of alternative asset classes. eFront’s solutions serve investors in the private equity, real estate investment, banking, and insurance sectors.