Exciting news today. Bloomberg announced it has acquired Canoe Intelligence. It’s a big outcome for everyone at Canoe and a punctuation mark on Canoe becoming the category leader in private markets data. Congratulations to Jason Eiswerth, Michael Muniz , Zack Helgeson, CAIA, CIPM , Chris Jones, Noel Calhoun, Josh Whitcraft, James Eliason, Nassim Bordbar, Brian Sadler, and the entire team!

When we first invested in Canoe, I wrote a post asking who would build the Bloomberg of private markets data, openly hoping it would be Canoe. With this acquisition, I suppose I have an answer.

With the acquisition of Canoe, Bloomberg gains unmatched access to analytics ready data with more than 15+ years of history to 44,000 private funds and $11T of AUA. Canoe serves 500+ customers across the value chain of investors/Limited Partners (LPs), asset managers, servicers, and advisors.

All of us at F-Prime were fortunate to be a part of Canoe’s journey and I cannot wait to see what the team builds with Bloomberg. Truly a great buyer for a great company.

With an industry event like this, it is worth asking what it means for private markets?

As a quick recap I envisioned three market phases:

1. Startups digitize the flat files (PDFs, spreadsheets) that General Partners (GPs) still use to report to LPs,
2. GPs modernize their own back offices and start distributing data digitally and in a standardized way, and
3. The winners of Phases 1 and 2 provide the analytics layer for private markets along with a de facto security master.

Canoe was winning Phase 1, and Bloomberg’s acquisition will strengthen that position. The other largest players in public markets data have made their bets: BlackRock acquired Preqin for $3.2B (13x revenue), MSCI acquired Burgiss for ~$900M all-in (12x revenue), and S&P Global paid $1.8B for With Intelligence (14x revenue).

Takeaway #1: several of the biggest players have declared private markets as the next frontier and have made their acquisitions. Others may still act, including Nasdaq, Dow Jones, NYSE, and Moody’s.

Takeaway #2: we have seen little progress on Phase 2. GPs are not sharing data in standardized digital ways like public markets. There are good, introductory steps like Daphne working with Apollo, Hamilton Lane, and EQT, yet in the time it took my daughter to start and finish high school, I still do not know a GP that has started sharing data digitally by default.

However, the tailwind driving Phase 2 forward is more evident than ever: evergreen funds. Unlike drawdown structures that have defined private markets for decades, evergreen funds are open-ended and semi-liquid with continuous subscriptions and periodic redemptions. Evergreen funds are a better fit for retail investors, and asset managers need retail investors to keep growing.

Over the last four years, Evergreen AUM has more than doubled to $600B today and is forecasted to represent 20%+ of all private markets AUM within a decade. Evergreen structures require asset managers to publish fund data, which over time will pressure them to publish comparable data for draw-down funds.

Takeaway #3: Firms like Morningstar see this coming and are trying to do for private funds what they did for mutual funds in the 1980s: build the standardized framework for evaluation. This is still difficult — Phase II must culminate in digitally distributed investment data — but it is the development I’m most excited about. Another F-Prime portfolio company, Monark Markets, is building the infrastructure to connect GPs of evergreen funds with the brokerage and wealth platforms that 23M accredited retail investors already use, enabling scalable omnibus clearing, model portfolios, and secondary liquidity. That is the retail distribution infrastructure this whole shift needs. Other startups like AltQ are building fund analytics and ratings for LPs, while Osyte, is building the portfolio and liquidity management layer for LPs to manage public and private data holistically.

Four years in, the question from my original post has an answer. The next one — who builds the analytics and workflow layer on top — is just getting started.

Originally published on LinkedIn.