Investment insights firm Morningstar and private markets research firm PitchBook launched a new index that tracks 30 of the largest and most liquid late-stage venture capital companies globally. Called Morningstar PitchBook Unicorn 30 Index (UI30), it tracks VC-backed companies valued at $1 billion or more, including SpaceX, Open AI, Stripe and SHEIN.
The index is meant to help investors measure and access the late-stage VC market. It will be calculated daily using a pricing model combining actual transaction data from secondary market price aggregator Caplight and alternative investment platform Zenbato. PitchBook’s database will provide key company-level data, including funding rounds, powering the pricing model, while Morningstar will be responsible for index construction.
The index will use screens to address liquidity challenges and will be reconstituted and rebalanced every quarter.
According to Sanjay Arya, head of innovation at Morningstar Indexes, the market for late-stage VC companies valued at $1 billion or more has grown from two or three dozen firms a decade ago to about 1,500 firms today, with a total market valuation of about $5 trillion. Since these companies stay private longer (an average of 12 years), they attract new types of investors, including hedge funds, mutual funds and private wealth managers looking to create access points for their retail clients to invest in these ventures.
“It’s a huge market… And the market is beginning to act more like a hybrid market as opposed to a private market, where there are a lot more transactions happening as well,” said Arya. “It’s a matter of time before retail investors get access to this. Our goal is to make this market more transparent, so that’s our primary motivation for creating this index.”
According to a statement from Rob Diefendorf, president and chief operating officer of PitchBook, “As the private markets continue to become more prominent and influential, PitchBook is the natural leader to drive greater understanding of market activity and enable access to private market investment opportunities to a wide investor base. Transparency is key to driving this momentum, and indexes like this play a crucial role in fueling innovation, supporting entrepreneurship and driving market growth.”
