PowerShares Capital Management LLC will be launching the industry’s first Listed Private Equity (LPE) exchange-traded fund (ETF).
The PowerShares Listed Private Equity Portfolio is based on the Red Rocks Listed Private Equity Index (LPE Index). The LPE Index is comprised of publicly listed US securities whose principal business is to invest in and lend capital to privately held companies. The LPE Index was created and is managed by Red Rocks Capital Partners of Denver, Colorado.
Companies that qualify for the Listed Private Equity Index have a majority of assets invested in privately held companies or have the stated intention to have a majority of assets invested in private companies. The firms must have a minimum market capitalization of USD 50 million and a closing price above USD 1.00 per share.
“Providing investors with direct, diversified and liquid access to the world of private equity is consistent with PowerShares’ goals as an asset manager,” says Bruce Bond, the President of PowerShares Capital Management. “I believe this product will be a very useful asset management tool for institutional investors and investment professionals alike. The LPE Index is both unique and innovative, and it is a great fit for our growing portfolio of exchange-traded funds.”
“Private equity investing is an Asset Class that has historically been the domain of institutional investors, endowment funds and ultra wealthy investors,” adds Mark Sunderhuse, the co-founder of Red Rocks Capital Partners. “With the Listed Private Equity Index we have created a means to track the performance of private equity firms, which historically have a lower correlation coefficient and above average yield compared to the S&P 500.”