KraneShares has launched an innovative ETF that applies the core return drivers of private equity buyout funds to publicly traded US equities.

FlexShares, the ETF business of asset manager Northern Trust Asset Management, has cross-listed the FlexShares Listed Private Equity UCITS ETF (FLPE LN) on London Stock Exchange.

FlexShares, the ETF business of asset manager Northern Trust, has rolled out a new ETF in Europe providing exposure to listed private equity companies globally.

In a report on listed private equity (LPE), Rob Murphy, Global Head of Financials & Investment Trusts at Edison Investment Research notes that the asset class displays a similar risk-reward profile to major equity indices, US real estate investment trusts as well as other equity classes over the longer term. LPE may still be an attractive investment proposition with the report noting the asset class is trading at a 14% discount to NAV. Investors may gain access to LPE exposures through several ETFs, such as those from iShares, PowerShares or Lyxor.

State Street Corporation, the asset manager behind the SPDR brand of exchange-traded funds, has announced the launch of the State Street Liquid Private Equity Investable Index, providing a liquid proxy for private equity investment and the basis for index-linked products such as ETFs. The index was conceived from research generated by State Street’s academic partnership, State Street Associates, which highlighted the superior return private equity managers have historically delivered when compared to broad equity market indices. The findings point to the managers’ ability to correctly predict the outperformance of certain economic sectors as a key driver of return.

Listed private equity ETFs have enjoyed a strong year so far, with the Lyxor Privex UCITS ETF (PVX), PowerShares Global Listed Private Equity UCITS ETF (PSSP) and iShares Listed Private Equity UCITS ETF (IPRV) posting returns of 18.0%, 7.1 %, and 7.7% respectively in the period from 1st January 2015 to 23rd July 2015, far exceeding the S&P 500 index’s return of 1.9%. These ETFs invest in a combination of listed private equity asset managers that oversee a collection of funds investing in different forms of private equity, as well as listed private equity funds.