Nomura Launches Innovative Daily Investible Index Targeting Private Equity Returns

Nomura, Asia’s global investment bank, today announced the launch of the Nomura QES Modelled Private Equity Returns Index (Net) (the ?PERI„), the first daily investible index which targets returns similar to those which may be achieved through a global broad-based investment in private equity buyout funds.

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The PERI has been developed in collaboration with sub-adviser and quantitative think tank, Quantitative Equity Strategies, LLC („QES?) and uses data provided by Preqin Ltd, („Preqin„), the leading source of data and intelligence for the alternative asset industry.

The PERI does not invest in buyout funds directly or indirectly but has been developed on a foundation of private equity research which suggests that a substantial portion of private equity buyout fund returns can be attained through an investment in the „public market equivalents? of the private investments made by those funds. The PERI implements this theory through a QES developed systematic model which uses financial algorithms, in large part underpinned by private equity industry data from Preqin, to allocate on a weekly basis to these „public market equivalents?.

The PERI is a daily investible, long only index that targets global private equity like returns but on a committed capital basis. The overall performance is intended to target both the returns of capital actually invested in the private equity buyout fund universe („called capital?) as well as a risk free rate of return on the proportion of capital awaiting deployment („dry powder?).

Exposure to the PERI is obtained exclusively via Nomura, which is able to offer a variety of structured products (including optionality) on the index. Matthew Peakman, Managing Director, Head of Fund Derivatives Trading at Nomura said: “The PERI has been developed to address some of the limitations traditionally associated with private equity investing, including long term capital lock ups, high minimum investment sizes and infrequent reporting. With the PERI, we are capable of providing truly liquid products that target global buyout returns in a cost efficient way.”

The PERI is the first liquid private equity returns index of its kind, and the first investible index to use data from Preqin. Mark O?Hare, CEO of Preqin, said: “Preqin is the world?s leading database of private equity fund and deal data, covering over 6,000 funds and over 70% of all capital ever raised by the industry. The PERI is a unique index that will clearly benefit from this unparalleled depth of market data”.

The PERI is calculated daily by S&P Opco, LLCTM and published on Bloomberg NMQPERIN Index.

Next Finance , November 2012

Article also available in : English EN | français FR

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