Earlier this year, BlackRock acquired France-based alternative investments software and solutions provider eFront. BlackRock cited two main drivers for the acquisition: to “strengthen its leadership position in the illiquid investment space” and to give “investment managers ability to seamlessly manage portfolios across public and private asset classes on a single platform.” I’m excited about the prospects this marriage can bring to the asset management community. But can BlackRock, the $7 trillion global asset manager and private equity general partner, succeed in building this much needed multi-asset solution?
Thanks to the eFront platform and the $1.3 billion in cash that was spent on the acquisition, BlackRock will now have a portfolio management solution for its own $135 billion in alternative assets under management. According to sources familiar with the deal, a joint team has already been formed and kicked off a project to onboard the BlackRock Private Equity portfolios onto the eFront software as a General Partner user. This endeavor will likely take a substantial amount of focus from the respective product teams. In addition, BlackRock is assuring both its current and prospective software clients that the combination of eFront and its flagship Aladdin platform will result in a game-changing enterprise platform that will provide a “whole portfolio” technology solution for the marketplace.
This alliance has the potential to bring unparalleled integration between public and private markets by marrying Aladdin and eFront analytics. Having been an implementor of both solutions within the last 3 years, I know this will be no small undertaking. The most obvious challenge may be the disparate data model between public and private market assets, but the differences don’t end there. These two solutions have fundamental product differences that may make integration even more challenging. For instance, eFront can be highly bespoke and tends to be deployed in a very tailored way to each client, where Aladdin is more of a menu offering with limited customization. Can BlackRock make this integration happen without damaging the value proposition of either platform? If they achieve this for their own investment management team, will it be deployable across all eFront’s unique client solutions, including the Limited Partner user community?
I am truly excited to see how this partnership progresses. BlackRock is spot-on that a “whole portfolio” solution is desperately sought after in the marketplace. The question remains, will their management team be successful in building a truly integrated multi-asset solution for all market segments? Only time will tell.