In a bid to support wealth managers and institutional investors, MSCI has launched two new initiatives that provide greater access to performance data and risk assessments in private markets.
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 provide tools to navigate the rapidly evolving venture capital market, where the number of private companies valued over US$1 billion has increased tenfold in the last decade.
These indices, along with the MSCI Private Capital Indexes launched last July, aim to help investors and wealth managers allocate, analyse and benchmark private market investments, the firm said.
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 analyse 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.”
MSCI’s collaboration with Moody’s is the second key development for the firm this month.
Namely, earlier this month, it announced it had jointly created a solution offering independent risk assessments for private credit funds with Moody’s.
This includes data from over 2,800 private credit funds and 14,000 private companies globally, with Australian companies included.
Luke Flemmer, MSCI’s head of private assets, highlighted the significance of these initiatives in Australia, where regulatory focus is intensifying around reporting standards and access to data.
“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,” he said recently.
“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.”
At the time, MSCI clarified that the latter solution will be distinct from the services provided by Moody’s Ratings, the credit rating agency, to the issuers in the private credit market.
