BlackRock Inc.’s recent spate of deals — including this week’s acquisition of Preqin for $3.2 billion — is prompting concerns at Moody’s Corp. about the money manager’s debt burden.
The ratings company lowered its outlook to negative from stable, “due to the size and scope of two acquisitions it announced in a short span of time this year,” Moody’s said in a statement on Tuesday. Moody’s maintained its Aa3 long-term issuer rating on BlackRock’s senior unsecured debt, which is investment grade and considered to be low risk.
Moody’s said in addition that the deal for alternative assets data provider Preqin and the $12.5 billion acquisition of Global Infrastructure Partners has increased the company’s debt and leverage ratios. BlackRock has said the deals will give it a foothold in the fast-growing private markets, and Moody’s noted that the Preqin deal could lead to revenue synergies down the line.
“The immediate financial benefit from Preqin will be limited,” Moody’s said. “We are concerned that the risks associated with absorbing and integrating two acquisitions will place strain on BlackRock’s management resources, although the firm’s record in undertaking large acquisitions is good.”
A BlackRock spokesperson had no immediate comment.
London-based Preqin is a provider of private-capital data, with information on 190,000 funds, 60,000 fund managers and 30,000 private-market investors. Preqin competes with Bloomberg LP, the parent of Bloomberg News.
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