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Source joins forces with Nomura for private-equity ETF
by Robert St George on Sep 30, 2013 at 11:11
A new exchange-traded fund (ETF) offering exposure to private-equity markets has been unveiled by Source.
The ETF will track the Quantitative Equity Strategies Modelled Private Equity Returns Index (Peri), developed by Nomura.
This targets ‘returns similar to the global buyout fund universe, on a committed capital basis, using a combination of equity sector indices and cash in major currencies’. The index’s weightings by sector and currency will be determined on a weekly basis by analysis of fund data and deal intelligence from Preqin, a researcher.
‘Private equity has consistently delivered greater returns than many other asset classes,’ claimed Matthew Peakman, head of fund derivatives trading at Nomura.
‘However, certain characteristics of the market, including long lock-up periods, a lack of transparency and large minimum investments are drawbacks for many investors. Peri targets private-equity type returns, but in a transparent, liquid and cost-efficient manner.’
Traded on the London Stock Exchange under the name Source Nomura Modelled Peri Ucits ETF and with the ticker PERI, it will have a management fee of 0.3% and pay an index fee of 1%.
The shares are expected to have an initial price of $12,000 (£7,430) each.