MSCI Inc. on Monday launched 130 private capital indexes aimed at increasing transparency and improving investment decision-making in the global private markets.
The new indexes encompass private equity, private credit, private real estate, private infrastructure and private natural resources, the firm said.
“Investors need tools that will help them cut through the complexity of private markets and take advantage of new investment opportunities,” said Henry Fernandez, chairman and CEO of MSCI, in a release.
“Our private capital indexes allow investors to gain clarity across their investments through high quality validated data and industry leading index construction.”
MSCI said the indexes were constructed from a broad range of private capital funds, with more than US$11 trillion in capitalization.
The 130 indexes complement MSCI’s more than 80 existing real asset fund and property indexes. A spokesperson for MSCI said the indexes are available via subscription.
The news comes on the heels of BlackRock Inc. purchasing alternative assets data provider Preqin, with the asset manager hinting at the possibility of private market indexes and funds to follow. In Canada, Obsiido Capital Management Ltd. launched a private investments software for advisors and firms to streamline the investment process in the space.
Brent Smith, chief investment officer with Kinsted Wealth in Calgary, welcomed these moves.
“It’s the right thing to do for investors,” he said.
“The investment universe is much, much bigger than what most individual Canadians realize. And most Canadian investors are probably provided exposure to public markets only, and the private space is massive. I think the more availability of private investments to investors, the better.”
As Smith pointed out, private indexes are available by way of firms such as Preqin and PitchBook currently, but they are less known to investors.
Having a globally recognized index provider like MSCI offer private market indexes will increase access to private markets data, which is currently one of the major barriers investors face in the space, he said.
“Right now, if I asked anyone, ‘Can you tell me what the private equity buyout index did last year?’ most people would not have a clue, because those indices are just not readily available,” Smith said.
“So, I’m hoping over the longer term, MSCI private market indexes will become more readily available and probably the standard for benchmarking how your private assets have done.”
MSCI’s new indexes will also benefit wealth management firms in Canada, Smith said: “At Kinsted Wealth, we use a tremendous amount of private assets and having more transparency to see how the indexes have done [is] going to be very, very positive for us.”