While the growth of private markets has led managers to provide more frequent and detailed reporting and therefore greater transparency, fragmented data and inconsistent standards are still a problem for investors. To provide investors with the ability to directly compare managers’ fund performance, S&P Global is partnering with investment consulting giants Cambridge Associates and Mercer to provide comprehensive private markets performance analytics.
Set to soft launch this year, the platform will use S&P Global's iLEVEL portfolio monitoring software to provide aggregated, anonymized insights, global fund performance monitoring, fundraising tracking, and deal analytics. The platform is designed to provide performance data across asset classes, reduced reporting complexity for managers, and an enhanced classification system.
The day before the announcement, Chris Sparenberg, head of private markets strategy at S&P Global Market Intelligence, told Institutional Investor that this partnership came about from wanting to provide “deeper views into nuanced asset classes.”
“Private markets are experiencing better transparency between GPs and LPs, but there hasn’t been a corresponding movement to creating a deeper taxonomy and analytics,” Sparenberg said. “That led us to pool our resources to create something new.”
The collaboration creates a new way to classify private markets funds and investments that better reflects how the industry currently operates. S&P’s new classification system breaks down funds, assets, and deals into more detailed categories, making it easier for investors to compare similar investments and analyze performance trends.
Sparenberg explained: “As the average institutional allocation has continued to grow year on year, we’ve seen a dearth of high-quality datasets that tell the story of what’s happening in the market.” Correspondingly, the market has grown, and with it more funds, more opportunities, more capital in the space — and more reporting.
Sparenberg offered an example of how S&P’s taxonomy can provide more granular and customized details: while airline leasing sits in the opportunistic credit bucket in most data sets, S&P tags it down to the leasing level so it also connects to special opportunities.
As private credit enters the lexicon, so comes more scrutiny, so Sparenberg argued it’s crucial that “there is a set of guidelines to help compare apples to apples — otherwise, we’re left with soundbites and anecdotes that may not tell the full story.”
