Morningstar introduces the first Global Unicorn Index Series

Nov 10, 2022
Powered by PitchBook and Morningstar Indexes, the new benchmarks are the first to daily measure Unicorns, or privately held venture-capital companies with valuations of $1 billion or more.

Morningstar introduces the Morningstar® PitchBook Global Unicorn Indexes™, the first index series to provide daily insights into the behavior and performance of late-stage venture capital (VC)-backed companies, empowering investors to better understand and access this rapidly growing but difficult-to-track asset class.

This new series of market indexes combines the leading VC data, analytics, and insights from PitchBook, an independent subsidiary of Morningstar, with the indexing best practices of Morningstar Indexes, one of the fastest-growing global index providers.

According to Morningstar research, private capital markets have grown substantially in the last decade, with more companies staying private longer or pursuing less traditional funding strategies. This trend has fueled a growing number of "unicorns," or VC-backed companies valued at $1 billion or more. Companies like Instacart, Stripe, and ByteDance are widely considered to be some of the most dynamic, fast-moving companies, driving new global markets and economic developments.

Once only accessible to sophisticated investors like pension funds and the ultra-high net worth, late-stage VC-backed companies are increasingly making inroads into individual portfolios through retirement plans and ownership of "crossover" mutual funds. But investor access and insight into the late-stage VC market has not improved as quickly as the market has grown. This market has been difficult for index providers to track due to its illiquidity, lack of reporting standards, and no mark-to-market pricing capability.

The Morningstar PitchBook Global Unicorn Indexes, a series of 11 global, regional, and single country indexes (including the Morningstar PitchBook India Unicorn 25 Index), address these challenges as the first daily published unicorn market benchmarks.

The index series employs a proprietary three factor mark-to-model pricing methodology to provide more frequent valuations for the asset class. The model employs a range of valuation measures and comparable data from private and public market peers to bring transparency to an asset class that has been hard for investors to track.

Read more on PitchBook Indexes

Harnessing Unicorns: Demystifying the venture capital market with the Morningstar PitchBook Global Unicorn Indexes

"Our new unicorn indexes will go a long way toward bringing transparency to what has become a significant segment of the capital markets. Investors will be able to gain insights into late-stage venture capital markets through our sophisticated daily valuation methodology, increasing their odds of success."

- Sanjay Arya, head of innovation, Morningstar Indexes 

"This product is a unique way to deliver PitchBook's extensive data and insights from its deeply ingrained industry analysts to investors. This is another important step in expanding our research capabilities for this growing area of venture capital."

- Kyle Stanford, senior venture capital analyst, PitchBook

"In today's market, investors are increasingly looking to nontraditional asset classes like private markets for portfolio diversification and investment opportunity. Our new global unicorn indexes combine the deep data and insight of PitchBook with the best practices of Morningstar Indexes to deliver a new series of benchmarks for the late-stage venture capital market." 

- Ron Bundy, president, Morningstar Indexes

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