State Street launches Private Equity Index(3)

The financial services provider has launched a private equity index based on quarterly statistics from public and private pensions, endowments and foundations.

State Street has a launched a private equity index with information on more than 1,300 partnerships with total fund size totaling more than $1 trillion, based on quarterly data gathered from its Private Edge Group.

The Private Edge Group analyses private equity portfolio performance for more than 4,000 commitments from pension funds, endowments and foundations.
 
In launching the performance index, State Street will be competing directly with Venture Economics, a division of Thomson Financial and the longstanding provider of private equity performance information. Venture Economics relies on data voluntarily submitted by GPs. Some market participants have complained that Venture Economics data include “survivorship” and “self-selection” biases. These skeptics question whether the voluntary submission approach leads to a representative sample of the overall market.
 
“The industry has long awaited a third party private equity index based on consistent and reliable data,” Chris Ailman, chief investment officer of the California State Teachers’ Retirement System, said in a statement. “ State Street’s index will be a tremendous asset in evaluating our holdings which will provide us the information necessary to make strategic business decisions.”

As of 30 June, the State Street Private Equity Index was comprised of data on 586 buyout funds, 567 venture capital funds and 156 “other” funds.