State Street launches index

Many in the private equity industry have long complained that no readily accessible, authoritative data exists on the performance in the private equity asset class. The fund administration arm of fnancial services provider State Street is hoping its new product will be the answer to many performance data prayers.
State Street’s Private Edge Group has launched a product called the State Street Private Equity Index which aggregates information on more than 1,300 partnerships with total assets under management totaling more than $1 trillion (€680 billion).
The analysis is culled from Private Edge’s client base, which represents more than 4,000 commitments totaling over $150 billion.
In a statement announcing the index launch, Chris Ailman, chief investment officer of the California Teachers’ Retirement System, said: “The industry has long awaited a third party private equity index based on consistent and reliable data. State Street’s index will be a tremendous asset in evaluating our holdings which will provide us the information necessary to make strategic business decisions.”
In launching the performance index, State Street will be competing directly with Venture Economics, a division of Thomson Financial and the longstanding provider of private equity performance information. Venture Economics relies on data voluntarily submitted by GPs.
Some market participants have complained that Venture Economics data include “survivorship” and “self-selection” biases. These skeptics question whether the voluntary submission approach leads to a representative sample of the overall market.
As of June 30, the State Street Private Equity Index was comprised of data on 586 buyout funds, 567 venture capital funds and 156 “other” funds.
The State Street information includes vintage-year breakdowns of performance data, as well as data grouped by geographic target, investment stage, fund size and quartile.