Bloomberg is to acquire private market data automation specialist Canoe Intelligence as the financial data behemoth seeks to expand its offerings in the booming market for alternatives data.
In what the company says is one of the most significant deals in its history, Bloomberg has characterised the acquisition as the “latest step” in a multi-year programme of developing the tools and services that meet the needs of private-asset investors.
The Bloomberg-Canoe acquisition underlines the importance that institutions are placing in private markets. Institutions have joined a wave of capital allocation into private markets that has grown to about US$15 trillion, according to Preqin and the Bank of England. Other estimates put it at $22tn. Private credit direct lending alone is valued at $2.1 trillion.“Private markets are where the growth and the client demand both are right now, so if you’re a data company trying to keep growing, [private markets] is one of the few places left with real headroom,” said John Cole Scott, president at CEF Advisors/CEFData, a Richmond, Virginia-based registered investment adviser.
Greater Transparency
The acquisition of Canoe Intelligence will enable Bloomberg to provide a richer private data offering to its clients and create new products and insights, said chief executive Vlad Kliatchko. That will bring greater transparency to often opaque private markets and transform the way its clients engage with them.
“Canoe gives us access to the data, technology and community to respond to that shift and positions Bloomberg to deliver an experience that will define the next era of investing: connecting data, analytics and tools to support the full investment lifecycle across both public and private markets,” Kliatchko said in a statement.
Mushrooming interest in private markets has forced general partners (GPs), the asset allocators within private asset funds and firms, to sharpen their tech talents and search for reliable vendors. However, an S&P Global Market Intelligence survey earlier this year found they are struggling. Two-fifths were dissatisfied with the available information, while less than a quarter said they were satisfied.
Data and technology providers are clamouring to capitalise on the growth in demand for private investments, including startup Alkymi and established data provider Fitch. This week, Intercontinental Exchange launched a classification service that creates unique, persistent identifiers (IDs) for private credit instruments as part of its ICE Private Credit Intelligence initiative with alternative-assets investment firm Apollo.Private market data carries a premium for its novelty and the niche profiles of providers who often specialise in one of the many asset classes within the space, including credit, equity, loans, real estate and hedge funds.
Fully Absorbed
Launched in 2018, Canoe’s data automation platform uses machine learning and other artificial intelligence technology to automate data exchanges between GPs and investors, the limited partners (LPs). Its clients comprise institutional investors, capital allocators, wealth managers, family offices and asset servicing firms.
The deal builds on the integration earlier this year of Canoe Intelligence into Bloomberg PORT Enterprise, Bloomberg’s order management system. Canoe’s private markets capabilities will now be fully absorbed into Bloomberg, enabling it to serve clients with new tools and insights.
It is the latest acquisition by Bloomberg as it girds for a future of multi-asset trading by its client base, many of which have traditionally worked in public markets, and private-focused investors.
It has also complemented those bought-in services by boosting its own private-asset capabilities. In April, for instance, it introduced a private direct lending data service, offering aggregated information from multiple sources to cover 15,000 active loans representing about US$1 trillion in deal flow. And in February, it unveiled Data Entitlements within the alternatives-focused ALTD function on its Terminal.
Buy Not Build
The deal fits a pattern of data providers buying in private-market capabilities, said John Cole Scott.
“Private markets data is just messier than public markets data, full stop – it’s scattered across broker-dealers, fund administrators, GPs and a pile of bespoke filings instead of living on one clean feed,” Scott told Data Management Insight.
“A mainstream data provider buying a firm that’s already solved that automation and normalisation headache is a lot faster, and safer, than building it themselves. The hard part isn’t the technology; it’s the years of relationships with broker-dealers, fund administrators and GPs needed to actually source the data.
“That’s not something you can build on a normal product timeline. Acquiring a firm that’s already spent years earning those data relationships is buying time you can’t otherwise buy.”
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