#Venture Capital #MSCI #Private Companies

MSCI's New VC Indexes: A Game-Changer for Private Asset Tracking

On April 28, 2025, MSCI Inc. (NYSE: MSCI) unveiled its latest offering, designed to empower investors and wealth managers in navigating the rapidly evolving landscape of private asset classes. The MSCI All-Country Venture Capital Backed Private Company Indexes aim to provide clear and transparent insights into the performances of global private assets, reflecting MSCI's deep commitment to enhancing investment knowledge. Leveraging its wealth of expertise in index composition, MSCI utilizes secondary market transaction data to evaluate stock performance for private companies backed by venture capital (VC).

Private companies receiving VC funding often operate in high-growth, technology-driven sectors—a trend that has captured increasing interest from investors and wealth managers. Transactions involving these private firms take place off-exchange, underscoring the significance of the over-the-counter (OTC) secondary market for liquidity provision and price discovery.

Historically, companies backed by VCs tend to stay private longer, with the total number of publicly traded companies in the U.S. declining by approximately half from 1996 to 2022. In contrast, the number of private companies valued over $1 billion backed by VCs has surged tenfold in the same timeframe. This shift has expanded the asset class of VC-backed private companies, making market performance data more accessible than ever before. In response, MSCI has developed the MSCI All-Country Venture Capital Backed Private Company Top 20 Equal Weighted Index and the MSCI All-Country Venture Capital Backed Private Company 20 Equal Weighted Vintage Index.

These indexes target top private companies globally that receive VC funding and have established a track record in the secondary market. MSCI collaborates with specialized companies such as Caplight and PM Insights to harness secondary market data, ensuring that the indexes are grounded in comprehensive market participant feedback. A research-driven, rule-based methodology is employed to design the indices, factoring in transaction performance, company size, and other critical elements.

This new suite of indexes represents MSCI's first solution aimed at measuring private market performance at the company level. According to Yana Haynes, head of MSCI's index division,