S&P launches listed PE index

The financial data giant has drawn up a list of 25 publicly traded ‘private equity’ entities around the world to be used as a performance benchmark. Over the past three years, the index has outperformed S&P’s Global 1200 index by more than 700 basis points.

Standard & Poor’s, the financial data company and index provider, has unveiled an index designed to track the performance of publicly listed private equity entities around the world.

The S&P Listed Private Equity Index comes on the heels of two similar products from US exchange-traded fund (ETF) provider PowerShares, which track listed private equity indices put together byColorado-based Red Rocks Capital Partners.

According to a press release, the new S&P index is “investable” and will “help asset managers benchmark performance in the sector and create index-linked investment products that will enable investors to diversify risk and minimize potential downside at a time of stretched valuations.”

In a statement, S&P’s managing director and chairman of the Index Committee David Blitzer said: “In 2003, there were only 16 pure private equity listed entities with a daily turnover of more than $1 million and a market capitalization grater than $250 million. As of 2007, these numbers have nearly doubled.”

The constituent stocks in the S&P index (listed below) include the high-profile recent offering from Kohlberg Kravis Roberts on the Euronext Amsterdam exchange, but not a similar Euronext offering from Apollo Management.

Like the PowerShares products, the S&P index combines entities that invest purely in private equity alongside entities that are more debt-focused, including Apollo’s lending business Apollo Investment Corp.

Research released by S&P shows its private equity index returning an annualised 22.46 percent over three years, compared with 15.11 percent over the same time period for the S&P Global 1200 Index.

S&P characterises its index as being weighted roughly 71 percent to buyouts and 29 percent to venture capital. The index is weighted roughly 37 percent to the US market, 19 percent to the UK and 16 percent to Japan.

The index’s top companies by weight are Japan’s Jafco, American Capital Strategies and 3i.

The 25 constituent stocks of the Standard & Poor’s Listed Private Equity Index include:

Japan Asia
Jafco Co.
Trans Cosmos Inc
American Capital Strategies
Apollo Investment Corp
Allied Capital Corp.
Ares Capital
Candover Investments
Compass Diversified Trust
CDB Web Tech Investments
Electra Private Equity PLC
Eurazeo
Gimv NV
Internet Capital Group Inc
Intermediate Capital Group

3I Group
KKR Private Equity Investors LLP
MCG Capital Corp
Wendel Investissement
Onex Corporation
Partners Group AG
Ratos AB
SVB Financial Group
SVG Capital PLC
Harris & Harris Group Inc