The private2000® index, representing a sample of private company investments across 30 countries, achieved a 0.72% return in September 2024, 4.45% YTD, and an 8.85% annualized return over the past 12 months. This week, we compare it with the PECCS Manufacturing sector (Code: AC06), which has underperformed with a 0.53% monthly return and 3.10% YTD, highlighting sector-specific dynamics that present unique opportunities for investors.
Scientific Infra & Private Assets offers hundreds of indices and comparable data points in private markets to help investors assess performance across various PE segments. In this report, we explore the flagship private market indices and examine the performance of key PECCS Activities.
Table 1: Performance of private2000 Index and Manufacturing sector
| Index | 1-month | 3m | YTD | 5Y | 5Y Volatility |
| private2000 VW USD | 0.72% | 4.20% | 4.45% | 8.85% | 15.47% |
| PEU Global Manufacturing EW USD | 0.53% | 2.16% | 3.10% | 9.79% | 18.65% |
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Source: privateMetrics, as of 30/9/2024
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Performance drivers of private2000 and Manufacturing sector
The private2000 index spans a diverse range of industries, resulting in various revenue models and business activities. For example, service-oriented companies led the private2000® VW US$ index's performance, contributing approximately 70% to the 0.72% monthly return in September 2024, demonstrating the private equity market's expansion into sectors with predictable, recurring revenue streams.
In comparison, manufacturing companies are heavily influenced by traditional production-based revenue models, and rely on value creation through physical goods, which are the primary drivers of their returns in Sep 2024. While this sector underperformed relative to the private2000 in September, its five-year annualized return of 9.79% demonstrates a solid potential for long-term growth.
On a risk-adjusted basis, the Manufacturing sector aligns with the market index (Sharpe ratio: 0.52 vs. 0.54). Investors with exposure to the manufacturing sector and an appetite for higher returns will need to ensure that their portfolio companies are well-positioned to capitalize on positive trends, such as increased demand for automation and robotics, to be rewarded for assuming higher risk.
This comparison between the global market index represented by the private2000 and the index that represents the manufacturing sector underlines the importance of granularity of information as far as capturing the market dynamics and investment valuations in private markets is concerned. This granularity often has a negative trade-off, which is the low number of observations at relevant industry or activity levels. By evaluating the values and performance of more than 80,000 assets each month for all segments representing the sector, customer and business models of the private asset market, Scientific Infra & Private Assets is able to meet the dual requirement of information relevance and robustness.
Technical information: privateMetrics market indices and benchmarks are asset-level private equity indices that reflect the dynamics of private markets with a beta of 1. They are built by repricing thousands of private companies each month using the latest private market transactions to calibrate an asset pricing model. These market indices are different from manager indices, the contributions to which solely reflect their choices for managing and valuing their investments.
Links to key documents:
