A private equity-focused ETF is going global. On Wednesday Invesco PowerShares revealed that the PowerShares Listed Private Equity Portfolio just changed its name to the PowerShares Global Listed Private Equity Portfolio. The move accompanies a switch to a new index, the Global listed Private Equity Index, and away from the Red Rocks Capital Listed Private Equity Index.
The ETF boasted $136 million in assets at market close on Wednesday.
Company Press Release
CHICAGO – September 30, 2009 – Invesco PowerShares, a leading provider of exchange-traded funds (ETFs), announced today that the PowerShares Listed Private Equity Portfolio (PSP) will begin tracking the Global Listed Private Equity Index, and be renamed the PowerShares Global Listed Private Equity Portfolio. The fund will continue to be offered on the NYSE Arca under the existing ticker symbol PSP. The fund had previously tracked the Red Rocks Capital Listed Private Equity Index.
“The universe of publicly-listed private equity opportunities outside the United States is quite significant, and we are pleased to be broadening the scope of PSP to provide investors with a global exposure to this asset class,” said Ben Fulton, executive vice president global product development at Invesco PowerShares. “We are delighted to continue our partnership with Red Rocks Capital LLC, one of the world’s leading experts in private equity.”
“The PowerShares Global Listed Private Equity Portfolio (PSP) addresses the needs of investors building asset allocation models that seek to include the attributes of private equity, with the added benefit of daily liquidity provided by the ETF structure,” added Fulton.
“Private equity is an essential asset class as both emerging and developed economies require capital for growth, re-capitalization and innovative technologies,” said Mark Sunderhuse, founder and managing director at Red Rocks Capital LLC. “The Global Listed Private Equity Index represents private equity investments on a global scale. The direct holdings underlying the publicly traded securities within the Index provide exposure to more than 1,000 privately held businesses diversified by industry, geography, stage of investment, vintage year and capital structure.”
As of Sept. 30, 2009, the PowerShares Listed Private Equity Portfolio will normally invest at least 90% of its total assets in securities, which may include ADRs and GDRs that comprise the Global Listed Private Equity Index. The index is designed to track the performance of a global group of private equity firms which are publicly traded on nationally recognized exchanges worldwide. The Index contains between 40 and 60 companies that invest in and lend capital to privately held businesses, representing a means of diversified exposure to private equity firms. The securities of the Index are selected and rebalanced quarterly per modified market capitalization weights.
Invesco PowerShares Capital Management LLC is leading the intelligent ETF revolution® through its family of more than 110 domestic and international exchange-traded funds, which seek to outperform traditional benchmark indexes while providing advisors and investors access to an innovative array of focused investment opportunities. With franchise assets of $34.4 billion as of June 30, 2009, PowerShares ETFs trade on both U.S. stock exchanges. For more information, please visit us at www.invescopowershares.com.
Invesco PowerShares is a wholly owned subsidiary of Invesco Ltd., a leading independent global investment management firm dedicated to helping people worldwide build their financial security. Invesco provides a comprehensive array of enduring investment solutions for retail, institutional and high-net-worth clients around the world. Operating in 20 countries, the firm is listed on the New York Stock Exchange under the symbol “IVZ.” Additional information is available at www.invesco.com.
Colorado-based Red Rocks Capital LLC constructs and maintains Listed Private EquitySM index products. Red Rocks Capital LLC is a recognized leader in Listed Private Equity and Liquid Private Equity branded products with the most extensive proprietary research databases in the industry. Red Rocks Capital LLC created the first set of indexes in the U.S., the Listed Private Equity Index and the International Listed Private Equity Index, to track the industry.
There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply.
The value of the stocks in the Global Listed Private Equity Index is likely to be more volatile than stocks of other issues. An investor in the Fund should anticipate that the value of their shares will increase or decease in value more or less in correlation with increases and decreases in the value of the Index.
The Fund is concentrated in a single sector which involves substantially greater risk of loss and price fluctuations than an investment diversified across multiple industries or sector segments.
The Fund's use of a representative sampling approach will result in its holding a smaller number of securities than are in the Underlying Index. As a result, an adverse development respecting an issuer of securities held by the Fund could result in a greater decline in NAV than would be the case if the Fund held all of the securities in the Underlying Index. To the extent the assets in the Fund are smaller, these risks will be greater.
The Fund’s return may not match the return of the Underlying Index. For example, the Fund incurs a number of operating expenses not applicable to the Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the Fund’s securities holdings to reflect changes in the composition of the Underlying Index.
Investments made by listed private equity companies are generally subject to legal and other restrictions on resale and are otherwise less liquid than publicly-traded securities. The illiquidity of these investments may make it difficult to sell such investments if the need arises, and if there is a need for a listed private equity company in which the Fund invests to liquidate its portfolio quickly, it may realize a loss on its investments.
Listed private equity companies may have investment portfolios consisting of a relatively small number of holdings.
Market disruptions, including a downturn in capital markets in general, or a downgrade of the credit rating of a listed private equity company held by the Fund may increase the cost of borrowing to that company, thereby increasing its cost of borrowing and adversely impacting the Fund’s returns.
Fair value of the investments of a listed private equity company may differ significantly from the values that would be reflected if the securities were traded in an established market, potentially resulting in material differences between the net asset value per share and the market value of a listed private equity company.
Many listed private equity companies invest in subordinated and/or unsecured securities of privately held companies, and may not be rated by a credit rating agency
Investment in the securities of non-U.S. issuers involves risks beyond those associated with investments in U.S. securities, including, but not limited to, greater market volatility, the availability of less reliable financial information, higher transactional costs, taxation by foreign governments, decreased market liquidity, political instability, changes in currency exchange rates, interest rate fluctuation and monetary policy changes.
Shares are subject to risks including: Small and Medium-Sized Company Risk - investing in securities of small and medium-sized companies involves greater risk than is customarily associated with investing in more established companies.
Shares are not FDIC insured, may lose value and have no bank guarantee.
PowerShares® is a registered trademark of Invesco PowerShares Capital Management LLC (Invesco PowerShares). Invesco PowerShares Capital Management LLC and Invesco Aim Distributors, Inc. are indirect, wholly owned subsidiaries of Invesco Ltd.
Invesco Aim Distributors, Inc. is the distributor of the PowerShares Exchange-Traded Fund Trust.
An investor should consider the Fund’s investment objective, risks, charges and expenses carefully before investing. For a copy of the prospectus which contains this and other information about the Fund, call 800.983.0903 or visit www.invescopowershares.com. Please read the prospectus carefully before investing.