Endnotes & Definitions
1Ontario Municipal Employees Pension Plan annual report as of December 31, 2022
2BCI annual report as of March 31, 2023
Buyout IRR vs. PME chart
Buyout IRR - Any Private Markets fund that generally takes control position by buying a company.
MSCI World PME - The index presented for comparison is the MSCI World, calculated on a Public Market Equivalent (PME) basis. The PME calculation methodology assumes that capital is being invested in, or withdrawn from, the index on the days the capital was called and distributed from the underlying fund managers. Contributions were scaled by a factor such that the ending portfolio balance would be equal to the private equity net asset value. The scaling factor is found by taking the sum of all shares sold (SS), the sum of all shares purchased (SP) and calculating the number of shares the ending value is worth (SEV). Dividing SEV + SS by SP solves for the PME scaling factor. The scaling of contributions prevents shorting of the public market equivalent portfolio in order to match the performance of an outperforming private equity portfolio. Realized and unrealized amounts were not scaled by this factor. The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The index is presented merely to show general trends in the markets for the relevant periods shown. The comparison between Hamilton Lane performance and the index is not intended to imply that a fund’s or separate account’s portfolio is benchmarked to the index either in composition or level of risk. The index is unmanaged, has no expenses and reflects the reinvestment of dividends and distributions. The spreads are provided for comparative purposes only. A variety of factors may cause an index to be an inaccurate benchmark for any particular fund or separate account and the indices do not necessarily reflect the actual investment strategy of a fund or separate account. The investment volatility of the MSCI World may differ from that of a fund or separate account.
Performance by Public Market Regime chart
The S&P 500 Index tracks 500 largest companies based on market capitalization of companies listed on NYSE or NASDAQ.
Public market data was compiled to reflect the state of returns in public markets. In this example, the returns are over a 3-year period. To calculate this, we created ‘buckets’ of public equity returns, then observed the corresponding private equity returns in each of those return buckets.
Private Equity – A broad term used to describe any fund that offers equity capital to private companies.
Worst Come to Worst chart
Credit – This strategy focuses on providing debt capital.
Real Assets – Real Assets includes any PM fund with a strategy of Infrastructure, Natural Resources, or Real Estate.
VC/Growth – Includes all funds with a strategy of venture capital or growth equity.
Natural Resources – An investment strategy that invests in companies involved in the extraction, refinement, or distribution of natural resources
Infrastructure – An investment strategy that invests in physical systems involved in the distribution of people, goods, and resources
Real Estate – Any closed-end fund that primarily invests in non-core real estate, excluding separate accounts and joint ventures
BofAML High Yield Index – The BofAML High Yield index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market
Credit Suisse Leveraged Loan Index – The CS Leveraged Loan Index represents tradable, senior-secured, U.S. dollar-denominated noninvestment grade loans.
DJ Brookfield Global Infrastructure Index – The DJ Brookfield Global Infrastructure Index is designed to measure the performance of companies globally that are operators of pure-play infrastructure assets.
MSCI World Energy Sector Index – The MSCI World Energy Sector Index measures the performance of securities classified in the GICS Energy sector.