Solactive AG, the German Index provider and CEPRES have partnered to develop the Solactive CEPRES US Private Equity Industry Replicator Index to address accessibility, illiquidity, and significant tracking errors of many existing products in the PE industry.
The Solactive CEPRES US Private Equity Industry Replicator Index is a public market replicator that provides return exposure to the return profile of buyout funds focused on North America. Its returns are designed to match the distribution of net asset value (NAV) for private equity investments (at a deal/portfolio company level) on a continuously updated basis.
A key innovation is that this performance is replicated using the Solactive GBS United States 500 Index, which tracks the largest 500 companies in the US stock market.
This replicator index offers the highest Sharpe Ratio at 0.57, compared to 0.48 for the standard United States 500 Index, and 0.46 for the CEPRES Buyout North America Index.
Additionally, downside risk is lowest for the Industry Replicator Index at 47%, compared to 50% for the United States 500 Index and 58% for the Buyout North America Index.
In bullish market conditions, instruments (like an ETF or financial derivative/product) based on the Solactive CEPRES US Private Equity Industry Replicator Index can provide a multitude of benefits including diversification, immediate deployment/exposure, cushioning from regulatory changes, portfolio flexibility, and straightforward asset allocation rebalancing.
In a bearish environment, an investment tool referencing the Industry Replicator Index can provide a valuable hedge, offering protection against macroeconomic uncertainty, interest rate risks, market volatility, and PE market downturns.
Learn more about the Solactive CEPRES US Private Equity Industry Replicator Index here.
