Chicago-based Invesco PowerShares announced yesterday that its Listed Private Equity Portfolio (PSP) will broaden its scope and begin tracking the Global Listed Private Equity Index, a benchmark composed of publicly-listed private equity firms around the world. Previously, PSP had tracked the Red Rocks Capital Listed Private Equity Index, a domestic benchmark.
“The universe of publicly-listed private equity opportunities outside the United States is quite significant, and we are pleased to be broadening the scope of PSP to provide investors with a global exposure to this asset class,” said Ben Fulton, executive vice president global product development at Invesco PowerShares, in a press release. “PSP addresses the needs of investors building asset allocation models that seek to include the attributes of private equity, with the added benefit of daily liquidity provided by the ETF structure.”
Private equity investments were among the hardest hit investments during the recent global recession. Between the beginning of 2008 and the bear market lows in March 2009, PSP fell by more than 80%. But as liquidity began to return to the market, private equity investments surged. Since early March, PSP has gained almost 150%, making it one of the top performing ETFs during that period.
PSP will maintain a heavy allocation towards U.S.-listed companies, but will also include investments in several other countries.
Private equity investments are often perceived as an investment option only for the ultra-rich. But the development of a private equity ETF (and an increase in the number of publicly-listed private equity firms) allows investors of any size to gain exposure to privately-held companies. Other “elite” investment strategies available through ETFs include 130/30 (through CSM), buy-write (PBP, BWV, PQBW), currency carry (DBV), and of course 2x and 3x leverage (through various ProShares and Direxion ETFs). See our Free Guide to ETFs For Very high Net Worth Individuals for more investment ideas.
Although PSP invests in approximately 60 companies, these constituents in turn have interests in more than 1,000 firms, meaning that PSP is diversified across both geographies and sectors of the global economy.
See the official press release from PowerShares here (PDF)
Disclosure: No positions at time of writing.