As the convergence of public and private markets continues to accelerate, the need for relevant and timely pricing insights is crucial for private market participants to contextualize the performance of their newly public holdings. In addition, LPs and GPs alike can leverage these tools to gauge how valuation shifts in the public markets may affect their private market holdings.
PitchBook and Morningstar have developed a suite of indexes to track the performance of companies that have either recently transitioned from the private to the public markets or are unicorns (startups with a post-money valuation over $1 billion) that may be preparing to go public.
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Methodology and additional resources
- Unicorn indexes are calculated using a proprietary model developed by Morningstar in conjunction with PitchBook. Morningstar’s daily pricing methodology allows us to track the value of unicorns with an unprecedented timeliness. Read more here.
- PitchBook IPO indexes are updated daily and reflect the prior day’s close. If new data is unavailable, the most recent value is forward-filled.
- Every PitchBook IPO index constituent included is listed on the NYSE and NASDAQ, regardless of company headquarters location.
- Public companies must debut with a post-money valuation of more than $50 million to be considered for inclusion in PitchBook’s IPO Indexes.
Reconstitution for PitchBook IPO indexes
- Newly listed companies that fit the criteria are included beginning the first day of the quarter after they exit via IPO, and continue to be included until the first day of the quarter after they have been trading for two years. For instance, a company that completed an IPO in February 2018 would be included starting at the March 2018 rebalance and dropped out at the March 2020 rebalance.
- In addition to normal deletions from aging out of the two-year window criteria, companies will also be removed from the index following an acquisition or bankruptcy or if their market cap falls below $50 million at any rebalance. If the event falls in the middle of the quarter, these companies are removed at the next rebalance date.
- Companies can be added to the index on a more expedited basis: If a company falls in the 95th percentile market cap of companies in the index, it will be added the day after its IPO.
- All index weights are rebalanced quarterly or in the event of an interperiod addition or deletion.
Click the links below for further details on:
Venture Capital Backed IPO Index
Morningstar PitchBook Global Unicorn Indexes
Featured image by Drew Sanders/PitchBook
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