Liquid Private Equity Has Continued to Outperform Major Market Indices, According to Red Rocks Capital GLPE Index
Golden, CO - (Business Wire) - Red Rocks Capital, an asset management firm specializing in private equity (PE) investing, announced today that its Red Rocks Capital Global Listed Private Equity Index (GLPE) returned 30.02% per year, vs. 21.14% per year for the S&P 500 for the five years ending March 31, 2014.
“The exit environment has been a consistent driver of recent private equity performance as strategic sales and IPOs in the US and Europe have resulted in significant distributions to investors”
The GLPE Index is the largest, most widely followed private equity index, with more than $500 million in ETF tracking assets, and was the first U.S.-based investable index to monitor global listed private equity companies.
Constituents of the Red Rocks Capital Global Listed Private Equity Index (GLPE) reported significant deal activity during the first quarter of 2014, driving continued Index growth and outperformance of major market and alternative asset indices.
Exits continued to be a major theme throughout the quarter, with the announcement of completion or of a number of large realizations by GLPE constituent firms. Onex, one of the largest weightings within the GLPE Index, was particularly active, announcing sales of The Warranty Group for $1.5B and Gates Global for $5.5B – one of the largest buyouts of the year.
Private equity activity in the first quarter increased vs. 2013, with buyout investment across North America up 50% while fundraising reached a post-crisis high of $95 billion.
“The exit environment has been a consistent driver of recent private equity performance as strategic sales and IPOs in the US and Europe have resulted in significant distributions to investors,” said Mike Trihy, manager of the GLPE Index at Red Rocks Capital. “Recent successful deals have been a key reason that PE firms have been able to raise capital for new funds. We believe that as long as global markets remain relatively calm, the managers of GLPE constituents will continue to exit mature holdings within their portfolios and selectively deploy dry powder as they see opportunities in certain market segments.”
The chart below depicts annualized returns for the Red Rocks Capital Global Listed Private Equity Index and other broad benchmark and popular alternative investment indices, including the S&P 500 Total Return Index, Credit Suisse Managed Futures Liquid Index, MSCI World Index, FTSE EPRA/NAREIT Global Real Estate Index, DJUBS Commodities TR Index and HFRX Global Hedge Fund Index.
Index returns shown are not reflective of actual investor performance nor do they reflect fees and expenses applicable to investing. An investor may not invest directly in an index.
S&P 500 Total Returns Index
An index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe.
Credit Suisse Managed Futures Liquid Index
An index that systematically tracks 18 of the most liquid and widely traded instruments in seeking to reflect the returns the Managed Futures sector.
FTSE EPRA/NAREIT Global Real Estate Index
An index that is designed to track the performance of listed real estate companies and REITS globally in both developed and emerging markets.
MSCI World Index
An index designed to capture large and mid-cap representation across 23 Developed Markets countries. With 1,612 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.
Dow Jones-UBS Commodity Index
A broadly diversified index composed of futures contracts on physical commodities traded on U.S. exchanges, with the exception of aluminum, nickel and zinc, which trade on the London Metal Exschange (LME).
HFRX Global Hedge Fund Index
An index designed to be representative of the overall composition of the hedge fund universe. It is comprised of all eligible hedge fund strategies; including but not limited to convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value arbitrage. The strategies are asset weighted based on the distribution of assets in the hedge fund industry. The methodology is based on defined and predetermined rules and objective criteria to select and rebalance components to maximize representation of the Hedge Fund Universe.
About the Red Rocks Capital Global Listed Private Equity Index (GLPE)
The GLPE Index is the largest, most widely followed private equity index, with more than $500 million in ETF tracking assets, and was the first U.S.-based investable index to monitor global listed private equity companies. With its global scope, GLPE puts an emphasis on direct private equity investing. The GLPE Index is designed to track the performance of private equity firms which are publicly traded on any nationally recognized exchange worldwide. These companies invest in, lend capital to, or provide services to privately-held businesses. The Index is comprised of 40 to 75 public companies representing a means of diversified exposure to private equity firms. The securities of the Index are selected and rebalanced quarterly per modified market capitalization weights.
About Red Rocks Capital, LLC
Red Rocks Capital is an asset management firm specializing in listed private equity securities. The Red Rocks Listed Private Equity portfolio gives investors access to an asset class that has historically had high barriers to entry due to investor qualification, long lock-up periods, and high initial investment minimums. Established in 2003 by Founders and Co-Portfolio Managers, Adam Goldman and Mark Sunderhuse, Golden, CO-based Red Rocks Capital was one of the first companies to offer access to private equity through a liquid mutual fund structure. It is currently the largest asset management firm that is focused exclusively on listed private equity, with approximately $1.3 billion in assets for advisor-sold mutual funds and variable annuities for institutions and investors. For more information, visit the firm’s website,www.redrockscapital.com, or call 303-679-8252.
Red Rocks Capital
- 1290 Broadway, #1100
- Denver, CO 80203