Red Rocks Capital

Liquid Private Equity Has Continued to Outperform Major Market Indices, According to Red Rocks Capital GLPE Index

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GOLDEN, Colo.--(BUSINESS WIRE)--Red Rocks Capital, an asset management firm specializing in private equity (PE) investing, announced today that its Red Rocks Capital Global Listed Private Equity Index (GLPE) returned 30.02% per year, vs. 21.14% per year for the S&P 500 for the five years ending March 31, 2014.

“The exit environment has been a consistent driver of recent private equity performance as strategic sales and IPOs in the US and Europe have resulted in significant distributions to investors”

The GLPE Index is the largest, most widely followed private equity index, with more than $500 million in ETF tracking assets, and was the first U.S.-based investable index to monitor global listed private equity companies.

Constituents of the Red Rocks Capital Global Listed Private Equity Index (GLPE) reported significant deal activity during the first quarter of 2014, driving continued Index growth and outperformance of major market and alternative asset indices.

FA Magazine - Alpha In Alts: Using Liquid Private Equity To Enhance Alternative Investment Performance

April 4, 2014 – FA Magazine - Alpha In Alts: Using Liquid Private Equity To Enhance Alternative Investment Performance

In this article, Red Rocks Capital co-founder and portfolio manager Adam Goldman illustrates the differences in allocations to private equity between institutional investors and retail investors.  Using hypothetical portfolio allocations, he illustrates that an allocation to private equity could potentially add additional returns with minimal increases to overall portfolio risk.


(To download a pdf file of this document, click here.)


The deals in the list below from Financial News show a glimpse of some of the most profitable private equity transactions of the last ten years.  “The theme in all deals is clear. Take a company with market-leading opportunities operating in an orphaned environment at low prices. Unlock the value and grow the company.”  In order to display the emerging prevalence of listed private equity within the private equity space, we have marked which deals were accessible through a listed vehicle.  Listed private equity investors had access to 14 of the 25 most successful deals in the last 10 years.

*Past performance is not indicative of future results



(To download a pdf file of this document, click here.)

Q4 - 2013 in review


During the fourth quarter of 2013, Investors in listed private equity were treated to a positive experience. Private equity continued generating meaningful returns in a favorable capital markets environment. Capital markets in the US and around the globe have remained calm and these conditions have favored both the deal making environment and the ability of companies to realize profits through IPOs (Initial Public Offerings) or through strategic sales. Management teams have maintained a disciplined approach to investing and they have also maintained a conservative posture as it relates to debt levels.

What’s not to like? Company valuations have been rising at a slow and steady pace. Financing has been available from debt funds and BDCs (Business Development Companies) and it appears that banks have begun to lend again. In addition, cash balances on corporate balance sheets have been growing both here in the US and globally. We expect that an acquisition mindset will take hold as many companies have squeezed out almost all inefficiencies to grow their revenue and their net margins. To date, many companies have been doing much more without raising head count or incurring capital expenditures and may now consider M&A (Mergers and Acquisitions). Finally, we suspect that a generational turnover of family-held businesses may have finally begun; something that has been talked about for the last 15 years. If this has, in fact, started, in our view, it should be beneficial to mid-market buyout firms.


We believe that the stage is set for continued growth as all of the necessary factors point to private equity having continued success. Low interest rates and the fear that they may rise could act as a catalyst for deal making. This, combined with large cash balances and the lack of organic growth, may spur M&A activity. Second, while we see no obvious crisis on the horizon, we expect that one or more crises will materialize eventually; but for now all appears calm. Third and last, there are signs of confidence in business and consumer spending in the US and abroad. In the past, emerging markets have experienced significant recoveries on the heels of developed countries. If that comes to pass, we believe that the private equity sector may benefit as it has been quietly expanding its reach into the emerging world.

Thank you as always and wishes for a great 2014!

Mark Sunderhuse

Co-Portfolio Manager