What’s New In Investments, Funds – MSCI, Venture-Backed Company Indices,

The latest news in investment offerings, financial products and other services relevant to wealth advisors and their clients.

MSCI
MSCI has rolled out
indices to track venture-backed companies, another way of
measuring performance of unquoted companies – an area of growing
investor interest from wealth managers.

The organisation has launched two MSCI All Country Venture-Backed
Private Company Indexes.

The performance of private companies is tracked by secondary
market transaction data, MSCI said in a statement
yesterday. 

MSCI is plugging into a broad trend of more firms staying private
rather than listing on the stock market. On the demand side,
investors have become more interested in private companies
because of their perceived superior yields over a cycle to
compensate for less liquidity. Such qualities became more
attractive after the 2008 financial crash when interest rates
were slashed to almost zero in most countries, blunting the
appeal of listed stocks and bonds.

The number of US publicly listed firms in the US fell by almost
half between 1996 and 2022, MSCI said, citing data from the World
Bank. The number of venture-backed firms worth $1 billion or more
has also grown more than tenfold in the past decade (source: CB
Insights).

“With growing investor interest in private markets, high-quality
data and consistent, independent performance measurement of
private companies and funds alike are crucial for the entire
investment ecosystem,” Jana Haines, head of index at MSCI,
said. 

Expansion of unquoted companies as a share of the total has
prompted MSCI to develop the MSCI All Country Venture-Backed
Private Company Top 20 Equal Weighted Index and the MSCI All
Country Venture-Backed Private Company Top 20 Equal Weighted
Vintage Index.

The blending of private and public market investments is part of
a “total portfolio approach” that MSCI recently set out in a
white paper, Total Portfolio Allocation For Modern Wealth: A
holistic public-private asset allocation framework for managing
concentration risk and uncertainty in expected returns.

In July last year, MSCI launched MSCI
Private Capital Indexes.

Considering how inclusion in an MSCI index, such as the flagship
World and Emerging Market indices, can have a material impact on
share prices and asset allocations, the move into the private
markets area is significant. Just as ESG investing has spawned a
raft of new indices, now it’s the turn of private markets. As
soon as new indices spring up, they can then be used as building
blocks for entities such as exchange-traded funds.

Manulife
Manulife Singapore and Manulife Investments have enhanced
Manulife iFUNDS. The entities say it is the first integrated
digital wealth platform in Singapore to provide Manulife
financial consultants with a consolidated view of their
…