ProShares debuts global private equity ETF (PEX)

Feb 28th, 2013 | By | Category: Alternatives / Multi-Asset

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ProShares, a leading US-based provider of alternative exchange-traded funds (ETFs), has launched the ProShares Global Listed Private Equity ETF (PEX), a new ETF providing exposure to companies that invest in private unlisted companies.

ProShares debuts global private equity ETF (PEX)

The ProShares Global Listed Private Equity ETF provides exposure to private equity firms such as London-based 3i Group.

The BATS-quoted fund tracks the LPX Direct Listed Private Equity Index, a portfolio of up to 30 listed private equity companies worldwide whose primary business is direct investments in private equity.

Listed private equity refers to publicly traded companies that invest capital in privately-held enterprises. The fund focuses on direct listed private equity – companies that invest directly in private enterprises.

Private equity investment strategies typically aim to generate return by identifying private enterprises with potential and providing them with long-term capital to expand, introduce new products or restructure.

Private equity investing traditionally has only been available through limited partnerships, which can have high minimums and other restrictions.

Michael L. Sapir, Chairman and CEO of ProShare Advisors, said: “Private equity has long been a staple of institutional and high-net-worth individuals’ portfolios; for other investors, it’s been difficult to access. PEX offers access to global private equity with the liquidity, transparency and cost effectiveness of an ETF.”

The fund’s underling index was developed by LPX Group, a leading provider of listed private equity indices and research. The methodology underpinning the index defines direct private equity investments as investments in the equity, mezzanine or debt facility of a private company. It excludes companies whose primary business is private equity fund management.

Major holdings include 3i Group, American Capital, Ares Capital, Onex and Wendel. The fund has an expense ratio of 2.54%.

UK and European investors are able to access a similar index via the db X-trackers LPX MM Private Equity UCITS ETF (XLPE). This fund tracks the LPX Major Market Index, a global equity index tracking 25 of the largest, most actively traded listed private equity companies.

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