Listed Private Equity ETF starts trading on Oct 24
Previously, I wrote about PowerShares’ intention to launch a ETF that invests in private equity. I received an email from PowerShares that this ETF (ticker PSP) will start trading on Tuesday, October 24, 2006. Unfortunately, there is no word on the expense ratio but I suspect it will be similar to other PowerShares products, at 0.6%.
Here’s the excerpt of the email:
Unprecedented Access to a Previously Inaccessible Asset Class
Until now, investing in private equity has not been accessible to most private investors. High minimum subscriptions, limited liquidity and transparency and largely closed access paths have been ongoing factors in keeping the private equity space nearly exclusive to institutional investors. With the development of the innovative Listed Private Equity IndexSM, which the PowerShares Listed Private Equitysm Portfolio is based, it is now possible to participate in the private equity marketplace through exposure to more than 30 U.S. publicly listed companies with direct investments in more than 1,000 private, innovative and promising businesses.
While this ETF does not appear to invest directly with private, promising businesses (instead it invests in companies that invests in private businesses), I am still watching this ETF with interest since private equity is an asset class which individual investors generally do not have easy access to.
By the way, as of June 2005, David Swenson has 17% of Yale university’s endowment fund invested in private equity investments.
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