MSCI seeks to ease transparency fears around private markets
Index provider MSCI has unveiled two measures to make it easier for financial advisers and wealth managers to access transparent insights into private assets.
Firstly, it has launched two indices to measure the performance of private markets at a company, and secondly, it has announced a collaboration with Moody’s to provide risk assessment for private credit funds.
The MSCI All Country Venture-Backed Private Company Top 20 Equal Weighted Index and the MSCI All Country Venture-Backed Private Company Top 20 Equal Weighted Vintage Index have been developed to help in the navigation of the venture capital market.
These two new index solutions are the first offered by MSCI that seek to measure the performance of private markets at the company level. It also offers the MSCI Private Capital Indexes which were launched last July to provide closed-ended fund performance.
“The two new indexes are designed to help investors and wealth managers allocate, analyse, and benchmark the fast-evolving VC asset class. With venture-backed companies staying private longer periods, it’s more important than ever that investors have access to transparent data,” it said.
The number of private venture-backed companies with valuations of more than US$1 billion has grown tenfold over the last decade.
In constructing and calculating the indexes, MSCI uses secondary market data sourced from specialist firms Caplight and PM Insights. Both firms operate broker contributor networks to collect and analyze data across a broad cross-section of market participants. Leveraging this secondary market data, MSCI applies a research-driven, rules-based methodology focused on trading activity, size, and other parameters.
Jana Haines, head of index at MSCI, said: “With growing investor interest in private markets, high-quality data and consistent, independent performance measurement of private companies and funds alike are crucial for the entire investment ecosystem.
“The MSCI All Country Venture-Backed Private Company Indexes are one tool in a growing kit of solutions designed to help investors measure performance, identify opportunities, and integrate private equity and private debt into portfolios with greater clarity and confidence.”
Secondly, it has worked with ratings agency Moody’s to jointly create a solution that provides independent risk assessments for private credit investment. This includes data from more than 2,800 private credit funds and 14,000 private companies, including those in Australia.
Luke Flemmer, head of private assets at MSCI, said: “Australia’s private credit market is experiencing robust growth, in line with the global trends we’re seeing. As the market expands, the demand for reliable data, consistent standards, and advanced analytics has become critical for investors seeking to monitor, assess, compare, and communicate investment risk effectively.
“These initiatives are especially timely in countries like Australia, where regulatory focus is intensifying around enhanced reporting standards and improved access to data to better manage opportunities and risks in private capital markets.”
AUTHOR
Laura Dew
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