In late October The Prime Unicorn Index, the first index to track the share price performance of privately-funded U.S. companies, announced its quarterly reconstitution.
But the real news, which captured the attention of Markets Insider, Benzinga, finanzen.net and hundreds of other media outlets, was the Index’s stellar year-to-date return of 25.16 percent.
First, a little background from the press release that was issued with the announcement:
“Companies qualify as Unicorns when they have a valuation of $1 billion or more, while companies that have achieved $500 million valuations are classified as Approaching Unicorns, and are also included in the Prime Unicorn Index.
“Reconstitution of the index relies heavily on Lagniappe Labs’ proprietary research and difficult-to-source, objective data to determine true valuations of privately-funded companies in a measurable and verifiable way.
“The companies added to the index include Neutron Holdings, Inc. (DBA: Lime), Roblox Corporation, ClassPass Inc., The RealReal Inc., Marqeta Inc., Innovium Inc., Desktop Metal, Inc., Cybereason Inc., American Well Corporation, GitLab, Inc., OpenDoor Labs, Inc., ForgeRock, Inc, MetroMile Inc., Modernized Medicine Inc. and Devoted Health Inc. The reconstitution was effective at market close on Oct. 17, 2018.”
Ross Barrett, CEO and a founder of the Index noted in the release that “The Index serves to benchmark the performance of private companies in line with how the S&P 500 Index tracks publicly traded companies. We are excited to be the primary resource for investors and help them better understand how to assign the true valuation of private companies as they look to go public or be acquired.”
But the emerging value of the Index is its growth into a trading vehicle.
With private companies dominating various sectors of the economy of late, institutional investors are increasingly looking for opportunities to participate in the upside of investing in the companies or to explore ways to offset exposure they may have in investments in publicly traded companies.
“These are just a couple ways to trade the Prime Unicorn Index,” said Barrett. “At a minimum, the Index affords institutional investors a unique opportunity to access the private markets and make an investment on its future, whether they want to go long or short. This access to long or short exposure has not existed in the past.”
As mentioned above, an investment in the Index at the end of the fourth quarter of 2017 through the third quarter of 2018 would have produced a 25.16 percent return.
For more information, please visit PrimeUnicornIndex.com. To explore licensing opportunities regarding the Index, call (646) 429-0949. Bloomberg Ticker: PUNICORN Reuters Ticker: .PUNICORN