Discover Preqin’s enhanced index methodology
Preqin Index Methodology
Preqin Private Capital Indices provide a reliable benchmark that empowers financial professionals to make informed investment decisions and drive meaningful performance analysis. Capturing returns worth over $11.3tn in market capitalization across more than 14,000 private capital funds worldwide, Preqin Indices aim to deliver the most accurate, complete, and timely performance data in the market.
The Preqin Index Methodology reflects our commitment to driving transparency across the global alternatives market, empowering the financial community to make better, more informed decisions. It’s guided by the market standards of public markets trusted by investors worldwide to define the industry benchmarks for excellence for private market closed-end fund indices.
Download the Preqin Index Methodology
Enhancing Preqin Indices
Adopting the index construction and governance standards of public markets, Preqin’s enhanced index methodology underpins Preqin Indices to ensure the most accurate and effective representation of private market characteristics and performance for our clients.
Our recent global consultations with private market professionals have informed the refinements to the Preqin Index Methodology in three key areas:
Index construction: Refining our source selection process to select the most comprehensive and representative data source. Formalizing index publishing requirements based on fund count and market coverage.
Index calculation: Utilizing the modified Dietz method to weight the timing of cash flows to provide a more accurate reflection of performance. Formalizing outlier identification and treatment.
Index governance: Ensuring timely collection of data, thorough data review and validation, and strict publishing deadlines. Reviewing the methodology periodically and committing to update the methodology when required.
The enhanced index methodology will be implemented in January 2025 with the quarterly data update. This update will refresh all historical index data points.
You can read more about how we’re enhancing Preqin Indices in our FAQ document.
To discuss this update and any future Custom Index requirements, please contact your Client Services representative or get in touch with our team at info@preqin.com.
Why are Preqin Indices market-leading?
Completeness: Preqin Indices are powered by Preqin’s market-leading performance data, capturing returns worth over $11.3tn in market capitalization across more than 14,000 private capital funds worldwide.
Credibility: Preqin Indices are underpinned by a robust and clearly documented methodology driven by market standards recognized by investors around the world. They can be objectively customized to represent portfolio investment mandates by asset class, region, and more.
Data quality: Preqin is the only provider extracting performance data from four available data-sourcing channels: GP quarterly reports to LPs, FOIA, voluntary data contributions, and public data. Our data and research teams source, verify, and validate our performance data daily to ensure its quality. This reduces survivorship bias and improves the reliability of our indices.
Timeliness: Preqin Indices are updated every 90 days after quarter-end so you can have the most timely and reliable data for your periodic reporting purposes.