Research & Whitepapers
Private Equity is capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company. Active microcap portfolios invest in companies that are often targeted by private equity investors due to their business characteristics and small market capitalizations. However active microcap portfolios only invests in companies that are listed on public exchanges.
The Russell 2000 Index consists of the smallest 2,000 companies in a group of 3,000 U.S. companies in the Russell 3000 Index, as ranked by market capitalization. It is not possible to invest directly in an index. Microcap equities are defined as the 9th and 10th decile of all companies listed on the New York Stock Exchange (NYSE), American Stock Exchange (AMEX) and NASDAQ, as ranked by market capitalization, ending 12/31/2011, according to Ibbostson & Associates Classic Yearbook, 2012. Large cap equities are defined as the S&P 500 Index. The chart titled Micro-Cap Equities Have Provided Strong Long-Term Returns illustrates the performance of a hypothetical $1 investment in Large Cap Stocks as measured by the S&P 500 and Microcap equities as measured by Ibbostson & Associates. Assumes reinvestment of dividends and capital gains, but does not reflect the effect of any applicable sales charge or redemption fees.
This chart does not imply any future performance. Small company stocks defined as the bottom quintile of securities ranked by market capitalization from 1926-2012. Correlation is a statistical measure of how two securities move in relation to each other. Beta measures the sensitivity of rates of return on a fund to general market movements.