Turn of the Millennium

Total Exposure by Strategy

Private markets have undergone tremendous growth since the turn of the millennium, expanding their reach into new strategies like credit and infrastructure. This week we look at both the growth of the asset class and total exposure by strategy since 2000.  

While private markets have grown rapidly since 2000, we can’t forget that they are still very small relative to the MSCI World.  From a strategy perspective, private markets were dominated by equity in 2000, which encompassed 80% of all private market exposure. However, over the past decade credit, infrastructure and natural resources have taken more market share, which has remained consistent over the past two timeframes (though keep in mind the size of the total pie has grown!). What does this mean for investors? It means more choices available to them, a positive thing for those willing and able to invest the time and resources to sift through those choices. 

Catch up on Chart of the Week.

Definitions:

Strategy Definitions 

Credit  – This strategy focuses on providing debt capital. 

Infrastructure – An investment strategy that invests in physical systems involved in the distribution of people, goods, and resources. 

Mega/Large Buyout – Any buyout fund larger than a certain fund size that depends on the vintage year. 

Natural Resources – An investment strategy that invests in companies involved in the extraction, refinement, or distribution of natural resources.  

Real Estate – Any closed-end fund that primarily invests in non-core real estate, excluding separate accounts and joint ventures. 

SMID Buyout – Any buyout fund smaller than a certain fund size, dependent on vintage year. 

VC/Growth – Includes all funds with a strategy of venture capital or growth equity. 

Index Definitions 

MSCI World Index – The MSCI World Index tracks large and mid-cap equity performance in developed market countries.