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Index Methodology

The LPX NAV P/D Index Series offer private equity investors a meaningful barometer for the current valuation environment of the private equity asset class. The indices combine the LPX Listed Private Equity Index Series based on market prices and the LPX NAV Index Series, based on fundamental valuation as measured by the Net Asset Value (NAV). The LPX NAV P/D indices thus represent the price-to-book ratio. If the book value (NAV) is compared with the market price of a private equity portfolio, two different cases can occur. If the market price is above the NAV, a 'premium' market prevails. This means that investors are willing to pay a premium to the fair value of the private equity portfolio. If the market price is below the NAV, a 'discount' market prevails. This allows investor to acquire an existing private equity portfolio at a discount to the fair value.

The LPX NAV P/D Listed Private Equity Index Series are published daily and measure the premium/discount of the listed private equity universe. The LPX NAV P/D Index Series follow the identical structure as the LPX Listed Private Equity Indices and are divided into the following three modules:   

  • Size/Liquidity: LPX50 NAV P/D, LPX Composite NAV P/D, LPX Major Market NAV P/D
  • Regions: LPX America NAV P/D, LPX Europe NAV P/D, LPX UK NAV P/D
  • Private Equity Investment Styles: LPX Buyout NAV P/D, LPX Direct NAV P/D, LPX Indirect NAV P/D, LPX Mezzanine NAV P/D, LPX Venture NAV P/D

Empirical studies suggest that the NAV development of Listed Private Equity (LPE) companies is highly correlated with the NAV development of traditional (unlisted) private equity funds. Against this background, the LPX NAV P/D Index Series can be used to approximate the current and historical valuation environment of the private equity asset class.