In this blog post, the authors look at raw BMU cash flows and find some alarming evidence that capital calls are outpacing distributions for the Private Equity and Private Debt asset classes.
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In this paper, the authors propose a new metric, terming it private fund duration (PFD), with three components, to assist investors in the analysis of the duration of private funds and investments.
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In this study, the authors examine potential reasons for the industry’s low levels of minority ownership, focusing on venture capital (VC), buyout, and growth investment groups
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In this blog post, Burgiss Applied Research mines the Burgiss Manager Universe for insights into whether some asset classes may be overvalued.
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In this blog post, we explore shifts in investment by industry as well as emerging geographic trends in the U.S. due to the sudden change from in-office work to work-from-home arrangements.
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In this paper, the authors examine how the Securities and Exchange Commission (SEC) proposal requiring U.S.-listed public companies to disclose information on climate-related risks may indirectly bring climate transparency to 11% of the world’s private capital.
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The COVID-19 pandemic has upended traditional work arrangements, and with it, America’s economic geography. In this blog, we are revisiting our early predictions about private real estate and will be touching on some new implications for venture capital in future work.
Read MoreIn this paper, the authors introduce a new metric, α, to benchmark the performance of individual private equity funds. They use the Burgiss Manager Universe, one of the largest samples of PE fund cash flow histories available, to take the benchmark portfolio approach to the data.
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This article examines the BMU’s exposure, which we have defined as the valuations of the holdings, to the Sustainability Accounting Standards Board (SASB) Standards at two points in time: prior to the beginning of the COVID-19 crisis and at present.
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The current Burgiss Manager Universe (BMU) covers over 1,150 private debt funds with capital exceeding $1 trillion, yet despite its size and importance, the private debt markets remain relatively opaque. In this post, we take a granular look at loan-level data from the BMU to document some of the characteristics of private debt.
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In this paper, the authors examine the estimated Scope 1 and Scope 2 carbon emissions of 1,625 companies across the carbon-intensive energy, materials, and utilities sectors to find informative trends for investors by asset class and at the sector and sub-industry levels.
Read MoreIn this paper, the authors show that over the past half-century, innovative disruptions were central to understanding corporate defaults. In a given year, industries experiencing abnormally high VC or IPO activity subsequently see higher default rates, higher segment exits by conglomerates, and higher yields on bonds issued by the firms in these industries.
Read MoreThis white paper provides a summary of existing methods and current research on performance analysis and attribution for complex portfolios that include investments such as hedge funds and private investment funds. We summarize the main challenges of analyzing portfolios with illiquid assets and provide updated analysis for several important asset classes.
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Despite the importance of risk-adjusted returns for asset allocation, several aspects of private markets make estimating risk a perennial challenge. Unlike public markets, private markets operate at a relatively low frequency, have irregular cash flows and subjective valuations, and have data that is generally opaque. When returns are calculated at short time horizons, volatility is biased toward zero because of valuation smoothing; this bias dissipates as return horizons increase, but estimates become noisier. Using the approach described in How Risky Are Private Assets?, the Burgiss Applied Research team finds a sensible ordering for volatilities of the major private capital asset classes.
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In this paper, the authors examine Burgiss’ PE dataset and propose an alternative implementation which estimates a set of stochastic discount factor (SDF) parameters so that the subjective term structure of interest rates is determined by market data.
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Investors have sharpened their focus on the financial impact of climate change on their portfolios. Though climate risk affects every asset, addressing it has been particularly challenging with private portfolios, due to the inherent opacity that characterizes much of this space. In our joint blog with MSCI, we explore estimated carbon intensities of private equity and private debt funds.
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In this paper, the authors provide the first analysis of the risk exposure and consequent risk-adjusted performance of impact investing funds, private market funds with dual financial and social goals.
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The cash flows of private capital funds are known to be complex, requiring measures such as IRR, TVPI, and PME to be properly understood. The latest paper from the Applied Research Team looks at the cash flows to and from funds’ portfolio companies and explores their surprising complexity.
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There have been a growing number of climate-related transparency regulations and initiatives focused on public companies and managers of listed assets. But private companies have not received the same level of scrutiny. How can investors in private assets calculate their exposure to carbon emitters in their portfolios, and what can they do about it?
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The aggregate performance of closed- and open-end real estate funds in the U.S. was strikingly similar in recent years, despite large differences in their strategic focus and the roles they play in institutional portfolios.
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