The ProShares Global Listed Private Equity ETF (BATS:PEX) was introduced today. The new ETF owns companies in the U.S. and throughout the world that invest primarily in private enterprises.
"Private equity has long been a staple of institutional and high-net-worth individuals' portfolios; for other investors, it's been difficult to access," said Michael L. Sapir, Chairman and CEO of ProShare Advisors LLC, ProShares' investment advisor. "PEX offers access to global private equity with the liquidity, transparency and cost effectiveness of an ETF."
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About Listed Private Equity
Private equity investment strategies typically aim to generate return by identifying private enterprises with potential and providing them with long-term capital to expand, introduce new products or restructure. Private equity investing traditionally has been available through limited partnerships, which can have high minimums and other restrictions. "Listed private equity" refers to publicly traded companies that invest capital in privately held enterprises. PEX focuses on direct listed private equity-companies that invest directly in private enterprises.
The Underlying Index
PEX tracks the LPX Direct Listed Private Equity Index, a portfolio of up to 30 listed private equity companies worldwide whose primary business is direct investments in private equity. The index methodology generally defines direct private equity investments as investments in the equity, mezzanine or debt facility of a private company. It excludes companies whose primary business is private equity fund management. The index was developed by LPX Group, a provider of listed private equity indexes that is actively involved in private equity research.
After including contractual fee waivers, the total estimated net expense ratio for PEX is 2.54%. This includes 1.94% in estimated acquired fund fees and expenses from underlying investments and 1.00% in investment advisory fees and other estimated expenses. The top three holdings inside PEX are Apollo Investment Corp. (NASDAQGS:AINV), Ares Capital Corp. (NASDAQGS:ARCC), and Blackrock Kelso Capital (NASDAQGS:BKCC).
PEX is listed on the BATS Exchange. Follow us on Twitter @ ETFguide