Private Equity Continues Five-Year Run of Outperformance
GLPE Index Continues to Rise on Record Deal Activity and Outlook for Private Equity Firms
July 15, 2014
Golden, CO - (Business Wire) - Red Rocks Capital, an asset management firm specializing in listed private equity (PE) investing, announced today that its Red Rocks Capital Global Listed Private Equity (GLPE) Index returned 21.31% per year vs. 18.82% per year for the S&P 500, for the five years ending June 30, 2014.
The GLPE Index is the largest, most widely followed private equity index, with more than $700 million in exchange traded fund (ETF) tracking assets, and was the first U.S.-based investable index to monitor global listed private equity companies.
Q2 performance in the index was driven primarily by strong performance from select non-US names. The European economic recovery has resulted in robust asset growth for private equity firms investing in the region, and a healthy market for IPOs spurred a record number of PE-backed exits across Europe. IPOs were the choice of exit for almost 50% of European deals in the first half of the year as a record high $26.5 billion in private equity sponsored companies were brought to market.
“The exit environment for private equity has remained relatively healthy, and exit activity is a one of the drivers of listed private equity firms’ stock prices,” said Mike Trihy, manager of the GLPE Index at Red Rocks Capital. “We believe that as long as the exit environment remains relatively stable, we will see managers of GLPE constituents continue to harvest investments within their portfolios.”
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.
As of 06/30/2014
Source: Bloomberg. Past performance does not guarantee future results.
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 $700 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 $1.5 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.
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 Exchange (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.
Red Rocks Capital
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