Riches for investing pioneer – but Preqin sale is a big loss for Britain, says ALEX BRUMMER
Preqin is one of those City firms of which most people will have never heard.
Founded by Mark O’Hare two decades ago as Private Equity Intelligence, it reaches those parts of the financial markets others cannot reach.
In an extraordinary deal, O’Hare, who owns 80 per cent of the equity through his Ring-cycle tribute outfit Valhalla Ventures, has sold out to Blackrock.
This follows an auction in which the US asset manager was up against the London Stock Exchange Group and S&P Global.
The cash sale for £2.55billion ahead of the General Election on Thursday means that O’Hare will instantly become one of Britain’s richest people, worth £2billion.
Sold: Preqin provides data on alternative assets and provides analytical tools which guide 170,000 professionals on investment strategies from offices in London and across the globe
The timing of the deal almost certainly means he should be able to shield his newly acquired billions from fresh levies on riches, which Labour is widely reported to be considering if elected.
O’Hare has another life in rural Suffolk where he owns farmland and keeps a small aeroplane that he uses to cut his commute time to London.
On spring morning, he can be seen up to his knees in mud jogging across waterlogged fields.
Preqin specialises in providing data on alternative assets and provides analytical tools which guide 170,000 professionals on investment strategies from offices in London and across the globe.
The group describes itself as the home of alternative investments, mining intelligence on private equity, venture capital, infrastructure, national resources and ESG.
This is all the kind of stuff which Jeremy Hunt and doubtless his prospective successors want to see the UK’s risk-shy pension funds become involved in.
Legal & General is one of the few asset managers, so far, which is committed to expose the legacy pension funds it runs to more adventurous investments.
As part of the vast $10 trillion-plus Blackrock empire, Preqin will be another loss of a thriving UK enterprise to overseas ownership with all the impact that may eventually have on the booming UK financial and business services sector.
Broker Peel Hunt reports that the British takeover market is like a ‘coiled spring’ with 30 firm offers for FTSE quoted companies at an average offer price of £1.1billion.
The volume of deals has speeded up with the knowledge that there would be an election this year and concern that the next government may exercise more scrutiny over deals.
Foreign bids are rarely good for jobs, the nation’s tax take, intellectual property and in some cases the nation’s economic and geo-political security. Watchdogs need to bark louder.
French lettuce
Has the French ‘Truss tantrum’ passed? There was a relief rally in latest trading on the assumption that Marine Le Pen’s National Rally (RN) could be blocked from power if opposition parties are successful in alliance building.
The yield gap between French and German ten-year bonds narrowed to 0.75 of a percentage point compared with 0.85 before the weekend vote.
Nevertheless, French bond yields still rose, and the interest rate gap is up half a percentage point, since President Macron embarked on his electoral gamble.
If RN was to emerge as clear winners, it would usher in a period of turmoil. The party’s expansive budgetary plans could lead to a blow-out in bond yields of a full point or more.
The expectation, however, is that in office RN would dilute its programme and could be constrained should opposition parties come together.
What is clear is that France’s troubles are causing jitters across the eurozone, pushing up the cost of debt service everywhere.
France’s debt stands at 111 per cent of output and Italy even greater at 137 per cent. That makes Office of Budget Responsibility projections for the UK of 92 per cent or so look less stressful than one might think from our election debate.
Two months ago, Macron hosted a ‘Choose France’ summit and attracted some £13billion of inward investment from Amazon, Microsoft and the UK’s AstraZeneca. They may be less enthusiastic now.
Sound of music
On a cheerier note, I receive an upbeat WhatsApp message from a high level FTSE 100 executive on their way back from Glastonbury.
British musicians, such as Coldplay, the biggest band in the world, are ‘bossing it’ he says. The British-Albanian performer Dua Lipa ‘electrified’ a global audience.
Let’s hear it for creative Britain.
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